Case information

Contracts — Contracts of adhesion — Arbitration clause — Competence-competence principle allows arbitrators to rule on their jurisdiction — Proper interpretation of exception to competence-competence principle when real prospect that challenge may never be resolved by arbitrator if stay is granted — Evidentiary burden when assessing existence of real prospect exception — Standard of proof to be met — Elements to be proven.

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Spark Event Rentals Ltd. is the plaintiff in a price-fixing class action against Google and Apple. It alleges that Google has engaged in anti-competitive practices with Apple to artificially maintain the price of Google search ads above a competitive market rate.

Google applied to stay the proceedings in favour of the arbitration process mandated in the purchase agreement under s. 8(2) of the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233. Apple applied to stay the action under the Law and Equity Act, R.S.B.C. 1996, c. 253, on the basis that the matters were so intertwined that allowing both to proceed would amount to an abuse of process. Spark argued that the arbitration agreement is void as unconscionable or contrary to public policy.

Applying the competence-competence principle, Thomas J. stayed the action in favour of arbitration. The application related to jurisdiction, and, as none of the applicable exceptions had been established, the question of jurisdiction was to be determined by the arbitration tribunal. Spark’s appeal was dismissed.