Case information

Arbitration — Territorial jurisdiction — Absence of clause concerning place of arbitration in contract between parties — Civil procedure — Preliminary exceptions — Declinatory exception — Whether seat of arbitration designates district competent to hear court applications relating to arbitration — Whether parties to arbitration agreement possess right for arbitration to have seat — Whether indication by arbitrator of place where award is made determines seat of arbitration when it has not otherwise been chosen by parties — Code of Civil Procedure, CQLR, c. C 25.01, art. 167.

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A dispute concerning a franchise contract arose between the parties. That contract contained an arbitration clause but did not stipulate a choice of the applicable law or the election of a territorial jurisdiction. Six months after an arbitrator, sitting in Montréal, decided a first dispute, the respondent transmitted a new notice of arbitration to that same arbitrator, but for a different dispute. The applicant brought an application in the Superior Court of the district of Montréal to challenge the jurisdiction of the arbitrator and subsidiarily, to annul the decision with respect to the award on the merits. By disclosure of a declinatory exception, the respondent asked that the application on the arbitrator’s jurisdiction be referred to the judicial district of Rimouski, that is, its place of domicile, under art. 167 of the Code of Civil Procedure (“C.C.P.”).

The Superior Court granted the respondent’s declinatory exception. The location where the arbitration centre chosen by the parties was situated could not constitute an implied waiver by them of future choices of the territorial jurisdiction of a second dispute. Furthermore, the applicant did not establish a connecting factor between the application on the arbitrator’s jurisdiction and the district of Montréal whereas the respondent established a connection with the district of Rimouski, that is, its place of domicile. The Court of Appeal dismissed the applicant’s ground of appeal. Paragraphs 1 and 2 of art. 659 of the C.C.P. were not applicable, and the ground of appeal based on para. 3 of art. 41 of the C.C.P. was unfounded.