Court sends matter to Arbitration - Arbitration requirement enforced even though 3rd party involved

In Toyota Tsusho Wheatland Inc v Encana Corporation, 2016 ABQB 209, the court enforced a mandatory arbitration clause even though the arbitration outcome might affect 3rd party interests.

The court first held that the International Commercial Arbitration Act applied, noting that, in the absence of other indicia, Toyota’s place of business is where its business decisions were being made, which was either Tokyo or Houston, or both. Encana’s place of business is Alberta. Therefore, the parties had their places of business in different States at the time their agreements were executed (thus falling within Article 1(3)(a) of the Model Law). The court also found that the parties intended that the International Act apply.

The court concluded that the claims against Encana in a court action should go to arbitration, except for a specific performance claim which the agreements specifically provided could be brought in the courts. The court action against a 3rd party was allowed to proceed, including any third party proceedings it might bring against Encana.

The case highlights the tension between party autonomy, the interests of third parties, and the societal interest in avoiding a multiplicity of proceedings with the potential inconsistent results.

A multiplicity of proceedings indeed!

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