Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1511709
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,