UBER TECHNOLOGIES, INC. 
Why this Case Matters
In
This case serves as a reminder to parties that only claims governed by the arbitration agreement within a broader proceeding will be referred to arbitration. Causes of action that fall outside the scope of the dispute resolution mechanism will be decided by the court.
Background
Arsopi, Industries Metalurgicas arlindo
ARVOS engaged Arsopi to fabricate equipment pursuant to a purchase order as part of its contract with
The equipment was delivered and sold to
The dispute arose when
Arvos then commenced a Third Party Claim against Arsopi.The court distilled the Third Party Claim into three categories:
-
A tort claim between ARVOS and Arospi;
- A breach of contract claim between ARVOS and Arsopi; and
- A Tort-Feasors Act indemnity claim, as ARVOS asserted that Arsopi owed Orica a duty of care that was breached.2
- Should the court apply the competence-competence principle, directing ARVOS to commence arbitral proceedings in
Germany to determine whether the Third Party Claim was subject to arbitration? - Should the Third Party Claim be stayed in whole or in part as per the International Commercial Arbitration Act, RSA 2000, c.
I-5 ("ICAA")?
Arsopi argued that ARVOS' Third Party Claim was subject to the dispute resolution clause in their contract. As such, the Third Party Claim should be stayed and the matter referred to arbitration in
The Court's Reasons
The court was tasked with addressing two main issues when determining whether to stay the Third Party Claim:
Issue 1: The Competence-Competence Principle
Arospi argued that the proper application of the competence-competence principle required the court to stay the ARVOS Third Party Claim and all matters relating to the scope of the contractual dispute resolution clause to an arbitral panel - relying on Schedule 2, Article 16 of the ICAA.
The court found, however, that deference to arbitration is not absolute where the matter involves pure questions of law, or questions of mixed fact and law requiring only superficial consideration of the evidentiary record.
Relying on
Issue 2: Staying (most of) the Third Party Claim
The governing law of the contract in issue was German law. The court received evidence from the parties in order to make findings of fact on German law. The court found that the dispute resolution clause was valid, clear and enforceable, and that the clause would be interpreted as being all encompassing with respect to tort and contract law claims between ARVOS and Arsopi. On this basis, the court stayed those claims in favour of arbitration in
However, the court held that the Tort-Feasors Act indemnity claim in the Third Party Claim should not be stayed and that it should proceed to trial. The indemnity claim, grounded on an allegation that Arsopi owed Orica a duty of care, could not fall within the scope of the dispute resolution clause as Orica was not a party to that contract. As such, the Tort-Feasors Act claim, being premised on a cause of action with its genesis in Canadian law, should be decided by the
Concluding Thoughts
The decision outlines the court's approach to staying proceedings post-Uber, and reaffirms in what circumstances it may be appropriate for the court to consider questions of jurisdiction prior to the arbitral tribunal doing so.
In addition, the court decided to stay only those claims that were captured within the scope of the dispute resolution clause. Even where judicial economy may warrant referring an entire dispute to arbitration, if a claim involves a non-party to the agreement or was not intended by the parties to be arbitrated, those claims will likely have to proceed through he courts.
Footnotes
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