Arbitration’s Primacy? The Law Pertaining to Staying Court Proceedings in Favour of Arbitration

For decades, Canadian courts and legislation have followed the international current favouring arbitration as a valid and convenient means of resolving private disputes. One of the key ways courts safeguard the integrity of the arbitral process is through robust stay provisions allowing a party to invoke an arbitration agreement to defeat a court proceeding falling within its scope. The Supreme Court of Canada in TELUS Communications Inc. v. Wellman and the Court of Appeal for Ontario in Heller v. Uber Technologies Inc. dealt with challenges to motions for a stay of class proceedings in favour of arbitration. Both cases lie at the intersection of arbitration law and class proceedings and deal with whether and to what extent dispute resolution clauses calling for arbitration should be enforced with the effect that the parties are precluded from joining an otherwise certifiable class action. Wellman presents an additional consumer protection twist while Uber injects employment law considerations. In Wellman, the Supreme Court decided 5-4 in favour of enforcing the arbitration clauses in Telus’ contracts with its non-consumer wireless subscribers, forcing them to arbitrate instead of participating in a class action against Telus together with consumer subscribers. In Uber, the Court of Appeal refused to stay a class proceeding outright, finding that the dispute resolution clauses in Uber’s contracts with its drivers were invalid because it was both unconscionable and also an impermissible “contracting out”’ of an employment standard under the Employment Standards Act, 2000. This paper begins with a brief general discussion on Ontario’s arbitration statutes and similar legislation in other provinces with the goal of providing historical and legislative context for the “pro-arbitration” policy framework in which Wellman and Uber were decided. Next, this paper considers the stay provisions in Ontario’s domestic and international arbitration legislation generally before delving into Wellman and Uber to unpack and analyze some of the specific issues at play in those cases. Consistent jurisprudence from the Supreme Court of Canada and various courts of appeal champion arbitration as taking precedence over court proceedings, requiring parties to “hold to the course” once entering into an arbitration agreement. The situations in Wellman and Uber put the courts’ commitment to the test.

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