Canada / 24 June 2011 / Canada, Queen's Bench for Saskatchewan / Subway Franchise Systems of Canada Ltd. v. Cora Laich
| Country | Canada |
| Court | Canada, Queen's Bench for Saskatchewan |
| Date | 24 June 2011 |
| Parties | Subway Franchise Systems of Canada Ltd. v. Cora Laich |
| Applicable NYC Provisions | IV | V |
| Source |
2011 SKQB 249 | online: CanLII |
| Languages | English |
| Summary | The Respondent and Subway Franchise Systems of Canada Ltd. (“Subway”) entered into a franchise agreement (“the Agreement”), which contained an arbitration clause referring all disputes arising under the Agreement to arbitration by a sole arbitrator in Bridgeport, Connecticut. A dispute arose and Subway terminated the Agreement and obtained a favourable arbitral award. It then sought enforcement in Saskatchewan. The Respondent Cora Laich argued that the application for enforcement should be dismissed because she had been incapacitated and unable to attend the arbitration hearing, and that the award was penal in nature and its enforcement would be contrary to public policy. The Saskatchewan Court of Queen’s Bench dismissed the application on the grounds that enforcement of the award would offend public policy. The Court of Queen’s Bench found that Subway had met the requirements necessary to obtain recognition of the award under the UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”). The Court considered that because the Respondent had been able to take part in the arbitration hearing via telephone, she had not been incapacitated. It found, however, that Subway had never fully terminated the Agreement and that even during the arbitral proceedings, the parties had maintained their working relationship, with the Respondent remitting royalties to Subway. On this basis, it considered that because Subway did not actually suffer damages, enforcing the award would amount to “double recovery” and would violate public policy within the meaning of Articles 34 and 36 of the UNCITRAL Model Law, which the Court considered were derived from Article V NYC. |
Attachment (1)
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