Canada / 18 March 2011 / Supreme Court of Canada / Michelle Seidel v. Telus Communications Inc.
|Court||Canada, Supreme Court of Canada|
|Date||18 March 2011|
|Parties||Michelle Seidel v. Telus Communications Inc.|
|Applicable NYC Provisions||II | II(3)|
2011 SCC 15,  1 S.C.R. 531, online: CanLII
|Summary||Michelle Seidel entered into a written cellular service contract with TELUS Communications, Inc. (“TELUS”), a cellular phone provider. The standard contract form contained a mediation and arbitration clause that included a waiver of any right to commence or participate in a class action suit against TELUS. Seidel initiated a claim against TELUS in the British Columbia Supreme Court in 2005 under the Business Practices and Consumer Protection Act (“BPCPA”). When she sought to have her claim certified as a class action, TELUS applied for a stay of all proceedings on the basis of the arbitration clause. The trial judge found that TELUS' application was premature because the certification application had not been decided, and denied the stay. TELUS appealed the decision, arguing that the case followed by the British Columbia Supreme Court, the 2004 British Columbia Court of Appeal decision MacKinnon v. Instaloans Financial Solution Centres (“MacKinnon CA”), had been overruled by the 2007 Supreme Court of Canada decisions, Dell Computer Corp. v. Union des consommateurs (“Dell”) and Rogers Wireless Inc. v. Muroff, which both ruled that a class action is a procedural vehicle that does not modify the substantive rights created by an arbitration clause. The British Columbia Court of Appeal allowed the appeal and stayed Seidel’s action. Seidel appealed to the Supreme Court of Canada. The Supreme Court of Canada reversed the Court of Appeal in a 5-4 decision, holding that Seidel's class action could go forward. The Court based its ruling upon a finding that the enactment of the BPCPA manifested a legislative intent to prohibit any contractual waiver of "rights, benefits or protections" provided therein and that the remedies offered by private arbitration are different in scope and quality than those offered under the BPCPA. Consequently, the Court held that Seidel’s claims relying on the BPCPA could go forward, while any others would be subject to binding arbitration. The dissenting opinion argued that British Columbia's legislature had manifested its intent to honor arbitration clauses, absent a clear legislative statement to the contrary, by adopting the NYC into domestic legislation. It noted that the requirement of deference to the arbitrator’s jurisdiction is related directly to the role of the court that must, in considering an application for a stay of proceedings, determine whether the agreement is “void, inoperative or incapable of being performed” pursuant to Article II(3) NYC. The Court recognized that the general rule is that arbitrators should be the first to consider challenges to their jurisdiction, and therefore the expressions “void”, “inoperative” and “incapable of being performed” should be interpreted narrowly. It stated that courts should be mindful to avoid an interpretation that makes it possible to sidestep the competence-competence principle and turns the Convention’s “inoperative” exception into a back door for a party wanting to “escape” the agreement.|
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