34 www.lexpert.ca
Top 10 Business Decisions
CO-WRITTEN BY AIDAN MACNAB, BERNISE CAROLINO
WHEN PEACE River Hydro Partners sub‑
contracted work to Petrowest to construct
part of a northeastern BC dam, the two par‑
ties executed several arbitration clauses. When
Petrowest faced financial problems, a court
appointed a receiver to manage its assets and
property. e receiver brought a claim against
Peace River, seeking the funds allegedly owed
for the subcontracted work.
Peace River applied under s. 15 of BC's Ar‑
bitration Act for a stay of proceedings, arguing
the arbitration agreements governed the dis‑
pute. Aer a judge dismissed the stay applica‑
tion, the BC Court of Appeal dismissed Peace
River's appeal.
However, the Supreme Court of Canada al‑
lowed the receiver's civil claim to proceed. e
court held that s. 15 of the Arbitration Act
did not always require courts to stay a court‑
appointed receiver's civil claim where the
says Jones. She says that the SCC avoided
finding that the insolvency must always take
precedence over an arbitration provision
and that the issue must be decided on a case‑
by‑case basis.
Justice Suzanne Côté, who wrote for the
majority, said insolvency and arbitration
law did not need to exist at "polar extremes,"
as both emphasize efficiency, expediency,
procedural flexibility, and expert decision‑
making. She said that courts should gener‑
ally hold parties to their arbitration agree‑
ments, even if one has become insolvent.
PEACE RIVER HYDRO PARTNERS V. PETROWEST
CORP., 2022 SCC 41
• Peace River Hydro Partners et al. >
Burnet, Duckworth & Palmer LLP >
David de Groot, Rob Martz, Joanne Luu,
Alison Scott
• Petrowest Corporation et al. > Bennett
Jones LLP > Kelsey Meyer, Ciara Mack-
ey, Stephanie Clark, Paul Romaniuk
CLIENTS > FIRMS > LAWYERS
claim was subject to a valid arbitration agree‑
ment. e SCC said that courts may refuse to
grant a stay where the agreement is void, inop‑
erative, or incapable of being performed under
s. 15(2), and an otherwise valid arbitration
agreement can be inoperative or incapable of
performance if its enforcement compromises
the integrity of the receivership proceedings.
Peace River is important for two reasons,
says Jones at Lenczner Slaght. e SCC
provides guidance on when a non‑signatory
to an arbitration agreement is bound by it.
"at's guidance that's helpful in the insol‑
vency context, which was before the court,
but it's also helpful in the broader legal com‑
munity," she says.
e court also signalled that it prefers a
single proceeding model in insolvency to
keep the matter under its guidance without
hiving off certain aspects for arbitration,
