Background
Bombardier Inc. sold the shares of a Swedish subsidiary under a 2017 share purchase agreement governed by Ontario law and containing an Ontario attornment clause. The agreement provided for purchase-price adjustments tied to Swedish tax disputes. After Swedish proceedings concluded favourably, Bombardier claimed approximately $24.46 million from the company now known as Alstom Rail Sweden AB and sued it in Ontario.
A separate 2020 transaction transferred Bombardier’s transportation business, including the Swedish company, to Alstom interests. That agreement contained provisions addressing tax arrangements, affiliates, and prior agreements, as well as an ICC arbitration clause governed by English law. Alstom Sweden, although not a named party to that agreement, sought to stay Bombardier’s Ontario action in favour of an ongoing ICC arbitration. The Superior Court granted a stay until further order, permitting the Ontario action to be reactivated if the ICC declined jurisdiction.
The Court’s Holding
The Court of Appeal dismissed Bombardier’s appeal. Applying the competence-competence principle and the framework from Peace River Hydro Partners v. Petrowest Corp., it held that a stay applicant need only establish an arguable case that the required technical prerequisites are satisfied. Whether an arbitration agreement exists between the litigants is itself part of that framework, not a separate threshold question requiring a definitive judicial ruling.
The motion judge was entitled to find it arguable that Alstom Sweden, as an affiliate claiming through or under a named party to the 2020 agreement, could benefit from its arbitration clause and that Bombardier’s claim fell within the matters submitted to arbitration. Those findings did not finally determine the ICC’s jurisdiction, Alstom Sweden’s contractual status, or the merits of Bombardier’s claim. Because resolving jurisdiction required more than a superficial review of the disputed record, the ICC tribunal should decide the issue first. The court awarded Alstom Sweden agreed costs of $45,000, inclusive of HST and disbursements.
Key Takeaways
- On a stay motion under Ontario’s international commercial arbitration regime, the applicant need establish only an arguable case that an applicable arbitration agreement exists and covers the dispute.
- A non-signatory’s entitlement to invoke an arbitration clause may be left to the arbitral tribunal where it is arguable that the non-signatory claims through or under a contracting party.
- A court may decide arbitral jurisdiction directly on a pure question of law or after only a superficial review, but a factually and contractually extensive inquiry ordinarily belongs before the arbitrator.
Why It Matters
The decision reinforces Ontario courts’ deferential approach to international arbitration. Disputes over whether a non-signatory affiliate can rely on an arbitration clause do not necessarily prevent a stay; if the asserted connection is arguable, the tribunal generally receives the first opportunity to rule on jurisdiction.
The ruling also distinguishes a preliminary stay determination from a final conclusion about contractual rights. Here, neither the earlier Ontario forum clause nor the corporate-separateness arguments were finally resolved—the Ontario proceeding remains capable of revival if the ICC tribunal declines jurisdiction.