Uber Technologies Inc., Uber Canada, Inc., Uber B.V. v. Rasier Operations B.V., 2020 SCC 16

SUPREME COURT OF CANADA Citation: Uber Technologies Inc. v. Heller, 2020 SCC 16, [2020] 2 S.C.R. 118 Appeal Heard: November 6, 2019 Judgment Rendered: June 26, 2020 Docket: 38534 Between: Uber Technologies Inc., Uber Canada, Inc., Uber B.V. and Rasier Operations B.V.

Appellants and David Heller Respondent - and - Attorney General of Ontario, Young Canadian Arbitration Practitioners, Arbitration Place, Don Valley Community Legal Services, Canadian Federation of Independent Business, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Income Security Advocacy Centre, Parkdale Community Legal Services, United Food and Commercial Workers Canada, Workers’ Health and Safety Legal Clinic, Montreal Economic Institute, Canadian American Bar Association, Chartered Institute of Arbitrators (Canada) Inc., Toronto Commercial Arbitration Society, Canadian Chamber of Commerce, International Chamber of Commerce, Consumers Council of Canada, Community Legal Assistance Society and ADR Chambers Inc.

Interveners Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.

Joint Reasons for Judgment: (paras. 1 to 100) Concurring Reasons: (paras. 101 to 176) Dissenting Reasons: (paras. 177 to 338) Abella and Rowe JJ. (Wagner C.J. and Moldaver, Karakatsanis, Martin and Kasirer JJ. concurring) Brown J. Côté J. Uber Technologies Inc., Uber Canada, Inc., Uber B.V. and Rasier Operations B.V. Appellants v.

David Heller Respondent and Attorney General of Ontario, Young Canadian Arbitration Practitioners, Arbitration Place, Don Valley Community Legal Services, Canadian Federation of Independent Business, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Income Security Advocacy Centre, Parkdale Community Legal Services, United Food and Commercial Workers Canada, Workers’ Health and Safety Legal Clinic, Montreal Economic Institute, Canadian American Bar Association, Chartered Institute of Arbitrators (Canada) Inc., Toronto Commercial Arbitration Society, Canadian Chamber of Commerce, International Chamber of Commerce, Consumers Council of Canada,

Community Legal Assistance Society and ADR Chambers Inc. Interveners Indexed as: Uber Technologies Inc. v. Heller 2020 SCC 16 File No.: 38534. 2019: November 6; 2020: June 26.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ. on appeal from the court of appeal for ontario Contracts — Contracts of adhesion — Arbitration clause — Validity — Unconscionability — Mandatory clause in standardform contract between driver and multinational corporation requiring that disputes be submitted to arbitration in the Netherlands andimposing substantial up-front costs for arbitration proceedings — Driver commencing action in Ontario court against corporation —Corporation seeking stay of proceedings based on arbitration clause — Whether action should be stayed — Whether validity ofarbitration agreement should be decided by court or arbitrator — Whether arbitration agreement unconscionable — Arbitration Act,1991, S.O. 1991, c. 17, s. 7(2).

H provides food delivery services in Toronto using Uber’s software applications. To become a driver for Uber, H had toaccept the terms of Uber’s standard form services agreement. Under the terms of the agreement, H was required to resolve any disputewith Uber through mediation and arbitration in the Netherlands. The mediation and arbitration process requires up-front administrativeand filing fees of US$14,500, plus legal fees and other costs of participation. The fees represent most of H’s annual income.

In 2017, H started a class proceeding against Uber in Ontario for violations of employment standards legislation. Uberbrought a motion to stay the class proceeding in favour of arbitration in the Netherlands, relying on the arbitration clause in its servicesagreement with H. H argued that the arbitration clause was unconscionable and therefore invalid. The motion judge stayed theproceeding, holding that the arbitration agreement’s validity had to be referred to arbitration in the Netherlands, in accordance with theprinciple that arbitrators are competent to determine their own jurisdiction.

The Court of Appeal allowed H’s appeal and set aside themotion judge’s order. It concluded that H’s objections to the arbitration clause did not need to be referred to an arbitrator and could bedealt with by a court in Ontario. It also found the arbitration clause to be unconscionable, based on the inequality of bargaining powerbetween the parties and the improvident cost of arbitration. Held (Côté J. dissenting): The appeal should be dismissed.

Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Rowe, Martin and Kasirer JJ.: Because of the extensive fees forinitiating arbitration, there is a real prospect that if the matter is sent to be heard by an arbitrator, H’s challenge to the validity of thearbitration agreement may never be resolved. The validity of the arbitration agreement must therefore be resolved by the court. H’sclaim that the arbitration clause is unconscionable requires considering two elements: whether there is an inequality of bargaining powerand whether there is a resulting improvident bargain.

There was inequality of bargaining power between Uber and H because thearbitration clause was part of an unnegotiated standard form contract, there was a significant gulf in sophistication between the parties,and a person in H’s position could not be expected to appreciate the financial and legal implications of the arbitration clause. Thearbitration clause is improvident because the arbitration process requires US$14,500 in up-front administrative fees. As a result, thearbitration clause is unconscionable and therefore invalid. The parties disagreed on the arbitration statute applicable to their dispute.

Uber argued that the Ontario InternationalCommercial Arbitration Act applies and H argued that the Ontario Arbitration Act applies. Whether the International CommercialArbitration Act governs depends on whether the arbitration agreement is international and commercial. That the agreement here isinternational is not in dispute. Labour or employment disputes are not the type that the International Commercial Arbitration Act isintended to govern. The Arbitration Act therefore governs. The Court set out a framework in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 , [2007] 2S.C.R. 801, and Seidel v.

TELUS Communications Inc., 2011 SCC 15 , [2011] 1 S.C.R. 531, for when a court should decide ifan arbitrator has jurisdiction over a dispute instead of referring that question to the arbitrator. That framework applies to Ontario’sArbitration Act.

According to that framework, a court should refer all challenges to an arbitrator’s jurisdiction to the arbitrator unlessthey raise pure questions of law, or questions of mixed fact and law that require only superficial consideration of the evidence in therecord — that is, if the necessary legal conclusions can be drawn from facts that are either evident on the face of the record or undisputedby the parties. In addition to the two exceptions to arbitral referral in Dell and Seidel, a court may depart from the general rule of arbitralreferral if an issue of accessibility arises.

The assumption made in Dell is that if the court does not decide an issue, then the arbitratorwill. Dell did not contemplate a scenario wherein the matter would never be resolved if the stay were granted. Such a situation raisesobvious practical problems of access to justice that the Ontario legislature could not have intended when giving courts the power torefuse a stay. One way in which the validity of an arbitration agreement may not be determined is when an arbitration agreement isfundamentally too costly or otherwise inaccessible.

This could occur because the fees to begin arbitration are significant relative to theplaintiff’s claim or because the plaintiff cannot reasonably reach the physical location of the arbitration. Another example might be aforeign choice of law clause that circumvents mandatory local policy, such as a clause that would prevent an arbitrator from giving effectto the protections in Ontario employment law. In such situations, staying the action in favour of arbitration would be tantamount todenying relief for all claims made under the agreement.

The arbitration agreement would, in effect, be insulated from meaningfulchallenge.

Accordingly, a court should not refer a challenge to an arbitrator’s jurisdiction to the arbitrator if there is a real prospect that doing so would result in the challenge never being resolved. To determine whether only a court can resolve the challenge to arbitral jurisdiction, the court must first determine whether, assuming the facts pleaded to be true, there is a genuine challenge to arbitral jurisdiction. Second, the court must determine from the supporting evidence whether there is a real prospect that, if the stay is granted, the challenge may never be resolved by the arbitrator.

While this second question requires some limited assessment of the evidence, this assessment must not devolve into a mini-trial. The only question at this stage is whether there is a real prospect, in the circumstances, that the arbitrator may never decide the merits of the jurisdictional challenge. If there is a real prospect that referring a challenge to an arbitrator’s jurisdiction to the arbitrator would result in the challenge never being resolved, a court may resolve whether the arbitrator has jurisdiction over the dispute and, in so doing, may thoroughly analyze the issues and record.

The Court, therefore, should resolve the arguments H has raised. Unconscionability is an equitable doctrine that is used to set aside unfair agreements that resulted from an inequality of bargaining power. When the traditional assumptions underlying contract enforcement lose their justificatory authority, this doctrine provides relief from improvident contracts. The purpose of unconscionability is the protection of those who are vulnerable in the contracting process from loss or improvidence in the bargain that was made.

Unconscionability requires both an inequality of bargaining power and a resulting improvident bargain. An inequality of bargaining power exists when one party cannot adequately protect its own interests in the contracting process. A bargain is improvident if it unduly advantages the stronger party or unduly disadvantages the more vulnerable. Improvidence is measured at the time the contract is formed and must be assessed contextually. The question is whether the potential for undue advantage or disadvantage created by the inequality of bargaining power has been realized.

Although one party knowingly taking advantage of another’s vulnerability may provide strong evidence of inequality of bargaining power, it is not essential for a finding of unconscionability. Unconscionability does not require that the transaction was grossly unfair, that the imbalance of bargaining power was overwhelming, or that the stronger party intended to take advantage of a vulnerable party. The doctrine of unconscionability has particular implications for standard form contracts.

The potential for such contracts to create an inequality of bargaining power is clear, as is the potential to enhance the advantage of the stronger party at the expense of the more vulnerable one, particularly through choice of law, forum selection, and arbitration clauses that violate a party’s reasonable expectations by depriving them of remedies. Applying the unconscionability doctrine in this case, there was clearly inequality of bargaining power between Uber and H.

The arbitration agreement was part of a standard form contract and a person in H’s position could not be expected to understand that the arbitration clause imposed a US$14,500 hurdle to relief. The improvidence of the arbitration clause is also clear because these fees are close to H’s annual income and are disproportionate to the size of an arbitration award that could reasonably have been foreseen when the contract was entered into. Respect for arbitration is based on its being a cost-effective and efficient method of resolving disputes.

When arbitration is realistically unattainable, it amounts to no dispute resolution mechanism at all. In this case, the arbitration clause is the only way H is permitted to vindicate his rights under the contract, but arbitration is out of reach for him and other drivers in his position. His contractual rights are, as a result, illusory. Based on both the financial and logistic disadvantages faced by H in his ability to protect his bargaining interests and on the unfair terms that resulted, the arbitration clause is unconscionable and therefore invalid.

Per Brown J.: There is agreement with the majority that the appeal should be dismissed. There is also agreement with the majority that the mandatory arbitration requirement is invalid, but there is disagreement with respect to the majority’s reliance upon the doctrine of unconscionability to reach this conclusion. Contractual stipulations that foreclose access to legally determined dispute resolution — as the arbitration agreement in this case does — are unenforceable not because they are unconscionable, but because they undermine the rule of law by denying access to justice.

They are therefore contrary to public policy. The majority vastly expands the scope of the doctrine of unconscionability’s application. This is unnecessary, because the law already contains settled legal principles outside the doctrine of unconscionability which operate to prevent contracting parties from insulating their disputes from independent adjudication. It is also undesirable, because it drastically expands the doctrine’s reach without providing any meaningful guidance as to its application.

Charting such a course will serve only to compound the uncertainty that already plagues the doctrine, and to introduce uncertainty to the enforcement of contracts generally. The public policy doctrine is fundamental to Canadian contract law and provides grounds for setting aside specific types of contractual provisions including those that harm the integrity of the justice system. This head of public policy applies when a provision penalizes or prohibits one party from enforcing the terms of their agreement, which serves to uphold the rule of law.

At a minimum, the rule of law guarantees Canadian citizens and residents a stable, predictable and ordered society in which to conduct their affairs. Such a guarantee is meaningless without access to an independent judiciary that can vindicate legal rights. There is therefore no good reason to distinguish between a clause that expressly blocks access to a legally determined resolution and one that has the ultimate effect of doing so.

While public policy does not require access to a court of law in all circumstances, any means of dispute resolution that serves as a final resort for contracting parties must be just. Arbitration is an acceptable alternative to civil litigation because it can provide a resolution according to law, but where a clause expressly provides for arbitration while simultaneously having the effect of precluding it, the considerations which promote curial respect for arbitration dissolve. This is where the public policy principle preventing an ouster of court jurisdiction operates.

In evaluating a clause that limits access to a legally determined dispute resolution, the court’s task is to decide whether the limitation is reasonable as between the parties, or instead causes undue hardship. A court must show due respect for arbitration agreements, particularly in the commercial setting. It will be the rare arbitration agreement that imposes undue hardship and acts as an effective bar to adjudication.

Public policy should not be used as a device to set aside arbitration agreements that are proportionate in the context of the parties’ relationship and the possibility for timely resolution but that one party simply regrets in hindsight.

To decide whether a limitation on dispute resolution imposes undue hardship, the first factor to consider is the nature of disputes that are likely to arise under the parties’ agreement. Where the cost to pursue a claim is disproportionate to the quantum of likely disputes arising from the agreement, this suggests the possibility of undue hardship. Courts should also consider the relative bargaining positions of the parties. However, to be clear, an imbalance in bargaining power is not required to find that a provision bars access to dispute resolution.

Finally, it may be relevant to consider whether the parties have attempted to tailor the limit on dispute resolution. Here, the arbitration agreement effectively bars any claim that H might have against Uber and is disproportionate in the context of the parties’ relationship. This form of limitation on legally determined dispute resolution undermines the rule of law and is contrary to public policy.

While arbitrators should typically rule on their own jurisdiction, an arbitrator cannot reasonably be tasked with determining whether an arbitration agreement, by its terms or effects, bars access to that very arbitrator. It therefore falls to courts to do so.

While the question of whether an arbitration agreement bars access to dispute resolution is one of mixed fact and law, and may require more than a superficial review of the record, this limited exception to the general rule of referral — where a clause effectively prevents access to arbitration — is necessary to preserve the public legitimacy of the law in general, and arbitration in particular. Per Côté J. (dissenting): The appeal should be allowed and a stay of proceedings should be granted on the condition that Uber advances the funds needed to initiate the arbitration proceedings.

One of the most important liberties prized by a free people is the liberty to bind oneself by consensual agreement. Party autonomy and freedom of contract inform the policy choices embodied in the Arbitration Act, 1991 and the International Commercial Arbitration Act (“ International Act ”), one of which is that the parties to a valid arbitration agreement should abide by their agreement. The parties to the agreement in this case have bound themselves to settle any disputes arising under it through arbitration.

The Arbitration Act , the International Act , the Court’s jurisprudence and compelling considerations of public policy require the Court to respect the parties’ commitment to submit disputes to arbitration. The International Act , not the Arbitration Act , governs Uber’s motion for a stay. However, neither the analysis that follows nor the ultimate conclusions would change if the Arbitration Act applied. The International Act applies to arbitrations which are international and commercial.

The arbitration in this case is international because the parties have their residences or places of business in different countries, so the applicability of the International Act turns on whether the parties’ relationship is properly characterized as being commercial in nature. A court should approach this issue by analyzing the nature of the parties’ relationship on the basis of a superficial review of the record, as opposed to characterizing the nature of the dispute solely on the basis of the pleadings.

Focussing the analysis on the nature of the relationship created by the transaction is consistent with the weight of the Canadian jurisprudence on the scope of the UNCITRAL Model Law. In this case, a superficial review of the documentary evidence reveals that the underlying transaction between Uber and H is commercial in nature. The service agreement expressly states that it does not create an employment relationship. Instead, it is a software licensing agreement, a type of transaction identified as coming within the scope of the UNCITRAL Model Law.

A motion for a stay and for referral to arbitration may be dismissed if the arbitration agreement is found to be null and void under the UNCITRAL Model Law or invalid under the Arbitration Act . The validity of the arbitration clause in this case should be determined by an arbitral tribunal. There is a general rule that in any case involving an arbitration clause, a challenge to the arbitrator’s jurisdiction must be resolved first by the arbitrator. This is the rule of systematic referral.

A court may depart from the rule of systematic referral only if the jurisdictional challenge is based solely on a question of law or a question of mixed law and fact that requires only a superficial review of the documentary evidence, is not a delaying tactic, and will not unduly impair the conduct of the arbitration proceeding. A review is not superficial if the court is required to review testimonial evidence.

H’s arguments challenging the validity of the arbitration clause require more than a superficial review of the documentary evidence: H’s arguments are dependent upon testimonial evidence regarding his financial position, his personal characteristics, the circumstances of the formation of the contract and the amount that would likely be at issue in a dispute to which the arbitration clause applies. The Court should not create an exception to the rule of systematic referral.

An exception that would apply where an arbitration agreement is deemed to be too costly or otherwise inaccessible is inappropriate for several reasons. First, the rule of systematic referral is the product of an exercise of statutory

interpretation, so any exception to it must also be a product of statutory

interpretation. The policy considerations relied on by the majority cannot be used to make the Arbitration Act or the UNCITRAL Model Law say something they do not say. Second, the Court has already declined to allow courts discretion to fully entertain a challenge to an arbitration agreement’s validity. Third, it has also decided that delaying tactics should be counteracted by confining the scope of review on a motion for a stay to the documentary evidence.

Fourth, the ordinary operation of the rule of systematic referral under an agreement governed by a foreign choice of law clause is not a loophole, and there is no basis in the Arbitration Act or in the UNCITRAL Model Law for distinguishing between arbitration agreements which include a foreign choice of law clause from those which do not.

Fifth, there is no basis for concluding that the mandatory fees for the administration of mediation and arbitration proceedings under the International Chamber of Commerce’s (“ICC”) Arbitration Rules, Mediation Rules (“ICC Rules”) are significant relative to H’s claim, given that the amount of the claim is unknown and no explanation is given by the majority for concluding that H will be unable to reach the physical location of the arbitration.

Furthermore, there is disagreement with Brown J. that the rule of systematic referral would, absent an exception, infringe, or even engage, s. 96 of the Constitution Act, 1867 . Legislation which facilitates the enforcement of agreements to submit disputes to arbitration neither abolishes the superior courts nor removes any part of their core or inherent jurisdiction.

Courts retain an oversight role throughout the arbitration process and afterwards as proceedings commenced in contravention of an arbitration agreement are stayed, not dismissed, and as the stay may set conditions specifying how the parties are to proceed to arbitration.

The issues as to the doctrine of unconscionability, the Employment Standards Act, 2000 (“ ESA ”), and public policy raise questions of mixed law and fact which cannot be decided on the basis of a superficial review of that documentary evidence and, if the Court could consider the testimonial evidence in the record, it is insufficient to support a finding that the arbitration clause is unconscionable, inconsistent with the ESA , or contrary to public policy. There is agreement with Brown J. with respect to the unconscionability doctrine in the general law of contracts.

The unconscionability doctrine applies where there is (1) a significant inequality of bargaining power stemming from a weakness or

vulnerability, (2) a resulting improvident bargain, and where (3) the stronger party knows of the weaker party’s vulnerability. The key question in relation to the significant inequality of bargaining power is whether the weaker party had a degree of vulnerability that had the potential to materially affect their ability, through autonomous, rational decision making, to protect their own interests, thereby undermining the premise of freedom of contract.

The majority’s claim that vulnerability in the contracting process may arise from provisions in standard form contracts which are dense or difficult to read or understand sets the threshold so low as to be both practically meaningless and open to abuse. This sweeping restriction on arbitration clauses in standard form contracts would be best left to the legislature, especially since the sharing economy — a vital and growing sector of Canada’s economy which depends on standard form contracts that are agreed to electronically — could be stifled if a reduced threshold for inequality of bargaining power is adopted.

H’s claim that the bargain was improvident rests on three propositions: (1) the place of arbitration clause requires him to travel to Amsterdam at his own expense, (2) the choice of law clause excludes the application of the ESA , and (3) the selection of the ICC Rules entails the payment of fees which he alleges are disproportionately high. As to the place of arbitration clause, the place of arbitration is a legal concept which denotes the parties’ selection of a particular jurisdiction whose arbitration law governs proceedings, and under whose law the arbitral award is made.

There is no obligation to actually conduct the arbitration at the place of arbitration. As to the choice of law clause, arguments directed at the alleged unfairness of having the service agreement governed by foreign law are analytically distinct from those concerning alleged unfairness arising from the arbitration clause itself. The separability doctrine holds that arbitration clauses embedded in contracts should be treated as independent agreements that are ancillary or collateral to the underlying contract.

The result is that the alleged invalidity of the choice of law clause on the basis that it is unconscionable does not affect the validity of the arbitration clause. As to the selection of the ICC Rules, arbitration agreements involve a mutuality of exchange, so mandatory fees which apply to disputes initiated by either party would make pursuing a claim for a small amount just as uneconomic for Uber as for H . Therefore, if unfairness results from the imposition of the ICC fees on hypothetical claims for small amounts, the unfairness is mutual.

In any event, the actual amount of H’s claim is unknown, and establishing that a dispute over a small amount is likely would require the production and review of testimonial evidence. The proportionality of the ICC fees to H’s ability to finance a larger claim must be measured as of the time the contract is formed, and the Court has no evidence regarding his financial position at that time. The evidence does not support a finding that Uber had constructive knowledge of H’s alleged peculiar vulnerability.

It would have been impossible for Uber to be aware of H’s specific income and education level when he decided to become an Uber driver, or that he intended to use the Driver App as his primary source of income. In any event, such questions would require the production and review of testimonial evidence, which would lead the Court to stray impermissibly beyond the documentary record. The arbitration clause is not invalid under the ESA . The ability to file a complaint under the ESA is not an employment standard since the relevant

section does not require an employer to do or not do anything. As such, the arbitration clause does not unlawfully contract out of an employment standard. In any event, a court cannot determine that an arbitration agreement is invalid pursuant to the ESA without first finding that the parties involved are an employer and an employee. Whether H is an employee within the meaning of the ESA is a complex question of mixed law and fact which cannot be decided on the basis of a superficial review of the documentary evidence. The rule of systematic referral applies, and the parties should be referred to arbitration.

The arbitration clause is also not invalid under public policy. The Court should not create a new common law rule that contractual provisions which have the effect of prohibiting access to dispute resolution are contrary to public policy. The Arbitration Act and the International Act are strong statements of public policy which favour enforcing arbitration agreements.

When considering whether, or how, to refashion old common law doctrines regarding arbitration, the Court should continue to embrace a more modern approach to arbitration law which views arbitration as an autonomous, self-contained, self-sufficient process pursuant to which the parties agree to have their disputes resolved by an arbitrator, not by the courts. The Court should not seek to roll back the tide of history by breathing new life into authorities which are irreconcilable with the modern approach to arbitration.

Therefore, doctrines based on the notion that only superior courts are capable of granting remedies for legal disputes should no longer be applied. Additionally, the comparative suitability of litigation, arbitration and other methods of dispute resolution for various classes of persons in various circumstances is a complex, polycentric policy decision that involves a host of different interests, objectives and solutions. Such questions do not fall to be answered by the courts, as they are instead matters for the elected policy-makers who sit in the legislature.

The pro-arbitration stance taken by legislatures across Canada and by the Court supports a generous approach to remedial options which will facilitate the arbitration process. Two such options include ordering a conditional stay of proceedings and applying the doctrine of severance. Although it will usually be unnecessary for a court to order a conditional stay, it may be appropriate to do so to ensure procedural fairness in the arbitration process.

C ourts should be careful not to impose conditions which impinge on the decision- making jurisdiction of the arbitral tribunal, but a condition which facilitates the arbitration process can protect the tribunal’s jurisdiction by ensuring that the parties are able to proceed with the arbitration. In addition, c ompelling policy considerations support a generous application of the doctrine of severance in cases in which the parties have clearly indicated an intent to settle any disputes through arbitration but in which some aspects of their arbitration agreement have been found to be unenforceable.

In light of the evidence that H cannot afford the ICC fees, Uber should be required to advance the filing fees to enable him to initiate arbitration proceedings. In addition, if the arbitration clause were unconscionable or contrary to public policy, the selection of the ICC Rules and the place of arbitration clause could be severed. The majority does not explain why they have chosen not to address severance in their reasons.

Defeating the parties’ commitment to submit disputes to arbitration based on a hypothetical case would be commercially impractical and, given that the dispute actually before the Court concerns a proposed class proceeding for CAN$400,000,000 and that the amount of H’s individual claim is as yet unknown, absurd. Approaching the enforceability of arbitration agreements in this fashion compromises the certainty upon which commercial entities rely in structuring their operations. The arbitration clause should be upheld. Cases Cited By Abella and Rowe JJ. Referred to: Peterson Farms Inc. v.

C&M Farming Ltd. , [2004] EWHC 121 (Comm.), [2004] 1 Lloyd’s Rep. 603 ; Crown

Grain Company, Limited v. Day, [1908] A.C. 504; Re Sutherland and Halbrick (1982), (MB CA), 134 D.L.R. (3d)177; Patel v. Kanbay International Inc., 2008 ONCA 867, 93 O.R. (3d) 588; Borowski v. Fiedler (Heinrich) Perforiertechnik GmbH(1994), (AB KB), 158 A.R. 213; Rhinehart v. Legend 3D Canada Inc., 2019 ONSC 3296, 56 C.C.E.L. (4th) 125;Ross v. Christian & Timbers Inc. (2002), (ON SC), 23 B.L.R. (3d) 297; Dell Computer Corp. v. Union desconsommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801; Seidel v. TELUS Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531; RogersWireless Inc. v.

Muroff, 2007 SCC 35, [2007] 2 S.C.R. 921; Trainor v. Fundstream Inc., 2019 ABQB 800; Alberta Medical Associationv. Alberta, 2012 ABQB 113, 537 A.R. 75; A. v. B. (No.2), [2007] EWHC 54 (Comm.), [2007] 1 All E.R. (Comm.) 633; Kyrgyz Mobil TelLimited v. Fellowes International Holdings Limited, [2005] EWHC 1329, 2005 WL 6514129; West Tankers Inc. v. Allianz SpA, [2012]EWHC 854 (Comm.), [2012] 2 All E.R. (Comm.) 395; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; Vita Food Products, Inc. v.Unus Shipping Co., (UK JCPC), [1939] A.C. 277; Pettkus v. Becker, (SCC), [1980] 2 S.C.R. 834; Dasv.

George Weston Limited, 2017 ONSC 4129; TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144; Morrison v.Coast Finance Ltd. (1965), (BC CA), 55 D.L.R. (2d) 710; Harry v. Kreutziger (1978), (BC CA), 9B.C.L.R. 166; Downer v. Pitcher, 2017 NLCA 13, 409 D.L.R. (4th) 542; Input Capital Corp. v. Gustafson, 2019 SKCA 78, 438 D.L.R.(4th) 387; Cain v. Clarica Life Insurance Co., 2005 ABCA 437, 263 D.L.R. (4th) 368; Titus v. William F. Cooke Enterprises Inc., 2007ONCA 573, 284 D.L.R. (4th) 734; Birch v. Union of Taxation Employees, Local 70030, 2008 ONCA 809, 305 D.L.R. (4th) 64; Ayres v.Hazelgrove, Q.B.

England, February 9, 1984; The Mark Lane (1890), 15 P.D. 135; Commercial Bank of Australia Ltd. v. Amadio, [1983]HCA 14, 151 C.L.R. 447; Hodgkinson v. Simms, (SCC), [1994] 3 S.C.R. 377; Hunter Engineering Co. v. SyncrudeCanada Ltd., (SCC), [1989] 1 S.C.R. 426; Norberg v. Wynrib, (SCC), [1992] 2 S.C.R. 226; Bhasin v.Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494; Douez v. Facebook, Inc., 2017 SCC 33, [2017] 1 S.C.R. 751; Loychuk v. Cougar MountainAdventures Ltd., 2012 BCCA 122, 347 D.L.R. (4th) 591; Roy v. 1216393 Ontario Inc., 2011 BCCA 500, 345 D.L.R. (4th) 323; McNeillv. Vandenberg, 2010 BCCA 583; Hess v.

Thomas Estate, 2019 SKCA 26, 433 D.L.R. (4th) 60; Blomley v. Ryan (1956), 99 C.L.R. 362;Bartle v. GE Custodians, [2010] NZCA 174, [2010] 3 N.Z.L.R. 601; Janet Boustany v. George Pigott Co (Antigua and Barbuda), [1993]UKPC 17; Alec Lobb (Garages) Ltd. v. Total Oil (Great Britain) Ltd., [1985] 1 W.L.R. 173; Lloyds Bank Ltd. v. Bundy, [1975] 1 Q.B.326; The Medina (1876), 1 P.D. 272; Portal Forest Industries Ltd. v. Saunders, (BC SC), [1978] 4 W.W.R. 658;Phoenix Interactive Design Inc. v. Alterinvest II Fund L.P., 2018 ONCA 98, 420 D.L.R. (4th) 335; Davidson v.

Three Spruces Realty Ltd.(1977), (BC SC), 79 D.L.R. (3d) 481; Williams v. Walker-Thomas Furniture Company, 350 F.2d 445 (1965); BremerVulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation Ltd., [1981] A.C. 909; Tercon Contractors Ltd. v. BritishColumbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69. By Brown J. Referred to: Kaverit Steel and Crane Ltd. v. Kone Corp., 1992 ABCA 7, 120 A.R. 346; R. v. Mian, 2014 SCC 54, [2014] 2S.C.R. 689; 1196303 Ontario Inc. v. Glen Grove Suites Inc., 2015 ONCA 580, 337 O.A.C. 85; Pro Swing Inc. v.

Elta Golf Inc., 2006SCC 52, [2006] 2 S.C.R. 612; Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1S.C.R. 69; In re Estate of Charles Millar, Deceased, (SCC), [1938] S.C.R. 1; Douez v. Facebook, Inc., 2017 SCC 33,[2017] 1 S.C.R. 751; Elsley v. J. G. Collins Ins. Agencies Ltd., (SCC), [1978] 2 S.C.R. 916; Shafron v. KRG InsuranceBrokers (Western) Inc., 2009 SCC 6, [2009] 1 S.C.R. 157; Fender v. St. John-Mildmay, [1938] A.C. 1; Kill v. Hollister (1746), 1 Wils.K.B. 129, 95 E.R. 532; Scott v. Avery (1856), 5 H.L.C. 811, 10 E.R. 1121; Deuterium of Canada Ltd. v.

Burns & Roe Inc., (SCC), [1975] 2 S.C.R. 124; Reference re Secession of Quebec, (SCC), [1998] 2 S.C.R. 217; Jonsson v. Lymer,2020 ABCA 167; B.C.G.E.U. v. British Columbia (Attorney General), (SCC), [1988] 2 S.C.R. 214; Hryniak v. Mauldin,2014 SCC 7, [2014] 1 S.C.R. 87; Novamaze Pty Ltd. v. Cut Price Deli Pty Ltd. (1995), 128 A.L.R. 540; TELUS Communications Inc. v.Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144; Zodiak International Productions Inc. v. Polish People’s Republic, (SCC),[1983] 1 S.C.R. 529; Desputeaux v. Éditions Chouette (1987) inc., 2003 SCC 17, [2003] 1 S.C.R. 178; Sport Maska Inc. v.

Zittrer, (SCC), [1988] 1 S.C.R. 564; Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014SCC 59, [2014] 3 S.C.R. 31; Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801; Seidel v. TELUSCommunications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531; Ontario Medical Assn. v. Willis Canada Inc., 2013 ONCA 745, 118 O.R. (3d)241; Bisaillon v. Concordia University, 2006 SCC 19, [2006] 1 S.C.R. 666; Transport North American Express Inc. v. New SolutionsFinancial Corp., 2004 SCC 7, [2004] 1 S.C.R. 249; Popack v.

Lipszyc, 2009 ONCA 365; Fuller Austin Insulation Inc. v. WellingtonInsurance Co. (1995), (SK KB), 135 Sask. R. 254; Fuller Austin Insulation Inc. v. Wellington Insurance Co. (1995), (SK CA), 137 Sask. R. 238; Iberfreight S.A. v. Ocean Star Container Line A.G. (1989), 104 N.R. 164; ContinentalResources Inc. v. East Asiatic Co. (Canada), [1994] F.C.J. No. 440 (QL); Norberg v. Wynrib, (SCC), [1992] 2 S.C.R.226; Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53; Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494; Morrison v. CoastFinance Ltd. (1965), (BC CA), 55 D.L.R. (2d) 710; Input Capital Corp. v.

Gustafson, 2019 SKCA 78, 438 D.L.R.(4th) 387; Downer v. Pitcher, 2017 NLCA 13, 409 D.L.R. (4th) 542; Hodgkinson v. Simms, (SCC), [1994] 3 S.C.R. 377;Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303; Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 295; Dyck v. ManitobaSnowmobile Association, (SCC), [1985] 1 S.C.R. 589; Ayres v. Hazelgrove, Q.B. England, February 9, 1984; The MarkLane (1890), 15 P.D. 135; The Medina (1876), 1 P.D. 272; Commercial Bank of Australia Ltd. v. Amadio, [1983] HCA 14, 151 C.L.R.447; Chesterfield (Earl of) v. Janssen (1750), 2 Ves. Sen. 125, 28 E.R. 82; Earl of Aylesford v.

Morris (1873), L.R. 8 Ch. App. 484;Lloyds Bank Ltd. v. Bundy, [1975] 1 Q.B. 326; Waters v. Donnelly (1884), 9 O.R. 391; Woods v. Hubley (1995), 1995 NSCA 173, 146 N.S.R. (2d) 97; Hunter Engineering Co. v. Syncrude Canada Ltd., (SCC), [1989] 1 S.C.R. 426. By Côté J. (dissenting) Hofer v. Hofer, (SCC), [1970] S.C.R. 958; TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019]2 S.C.R. 144; Seidel v. TELUS Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531; National Gypsum Co. Inc. v. Northern SalesLtd., (SCC), [1964] S.C.R. 144; Zodiak International Productions Inc. v.

Polish People’s Republic, (SCC), [1983] 1 S.C.R. 529; Sport Maska Inc. v. Zittrer, (SCC), [1988] 1 S.C.R. 564; Desputeaux v. Éditions Chouette(1987) inc., 2003 SCC 17, [2003] 1 S.C.R. 178; Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009ONCA 642, 97 O.R. (3d) 161; Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801; Borowski v.Fiedler (Heinrich) Perforiertechnik GmbH (1994), (AB KB), 158 A.R. 213; Ross v. Christian & Timbers Inc. (2002), (ON SC), 23 B.L.R. (3d) 297; Patel v.

Kanbay International Inc., 2008 ONCA 867, 93 O.R. (3d) 588; UnitedMexican States v. Metalclad Corp., 2001 BCSC 664, 89 B.C.L.R. (3d) 359; Kaverit Steel and Crane Ltd. v. Kone Corp., 1992 ABCA 7,120 A.R. 346; Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation Ltd., [1981] A.C. 909; Heyman v.

Darwins, Ltd., [1942] A.C. 356; Prima Paint Corp. v. Flood & Conklin MFG. Co., 388 U.S. 395 (1967); Fiona Trust and Holding Corp.v. Privalov, [2007] UKHL 40, [2007] 4 All E.R. 951; Krutov v. Vancouver Hockey Club Ltd., ; NetSys TechnologyGroup AB v. Open Text Corp. (1999), (ON SC), 1 B.L.R. (3d) 307; Cecrop Co. v. Kinetic Sciences Inc., 2001 BCSC532, 16 B.L.R. (3d) 15; James v. Thow, 2005 BCSC 809, 5 B.L.R. (4th) 315; Haas v. Gunasekaram, 2016 ONCA 744, 62 B.L.R. (5th) 1;BNA v. BNB, [2019] SGCA 84; Tolofson v. Jensen, (SCC), [1994] 3 S.C.R. 1022; Rogers Wireless Inc. v.

Muroff, 2007SCC 35, [2007] 2 S.C.R. 921; Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27; Trial Lawyers Association ofBritish Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3 S.C.R. 31; Quintette Coal Ltd. v. Nippon Steel Corp.(1988), (BC SC), 29 B.C.L.R. (2d) 233; Stancroft Trust Ltd. v. Can-Asia Capital Co. (1990), (BCCA), 67 D.L.R. (4th) 131; Popack v. Lipszyc, 2009 ONCA 365; Iberfreight S.A. v. Ocean Star Container Line A.G. (1989), 104 N.R.164; Continental Resources Inc. v. East Asiatic Co. (Canada), [1994] F.C.J. No. 440 (QL); Fuller Austin Insulation Inc. v.

WellingtonInsurance Co. (1995), (SK KB), 135 Sask. R. 254, var’d (1995), (SK CA), 137 Sask. R. 238;Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall, 2018 SCC 26, [2018] 1 S.C.R. 750; Knox v. ConservativeParty of Canada, 2007 ABCA 295, 422 A.R. 29; R. v. National Joint Council for the Craft of Dental Technicians (Dispute Committee),[1953] 1 Q.B. 704; Roberval Express Ltée v. Transport Drivers, Warehousemen and General Workers Union, Local 106, (SCC), [1982] 2 S.C.R. 888; Astoria Medical Group v. Health Insurance Plan of Greater New York, 182 N.E.2d 85 (1962); SattvaCapital Corp. v.

Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633; British Columbia (Attorney General) v. Christie, 2007 SCC21, [2007] 1 S.C.R. 873; Jonsson v. Lymer, 2020 ABCA 167; Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494; Downer v. Pitcher,2017 NLCA 13, 409 D.L.R. (4th) 542; Input Capital Corp. v. Gustafson, 2019 SKCA 78, 438 D.L.R. (4th) 387; R. v. Salituro, (SCC), [1991] 3 S.C.R. 654; Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450; Douez v. Facebook,Inc., 2017 SCC 33, [2017] 1 S.C.R. 751; Alberta Motor Association Insurance Company v.

Aspen Insurance UK Limited, 2018 ABQB207, 17 C.P.C. (8th) 81; Houston v. Exigen (Canada) Inc., 2006 NBQB 29, 296 N.B.R. (2d) 112; Transport North American Express Inc.v. New Solutions Financial Corp., 2004 SCC 7, [2004] 1 S.C.R. 249; Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2S.C.R. 460; Machtinger v. HOJ Industries Ltd., (SCC), [1992] 1 S.C.R. 986; Williams v. Amazon.com, Inc., 2020BCSC 300; In re Estate of Millar (Charles), Deceased, (SCC), [1938] S.C.R. 1; Fender v. Mildmay, [1937] 3 All E.R.402; Tercon Contractors Ltd. v.

British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69; Novamaze Pty Ltd.v. Cut Price Deli Pty Ltd. (1995), 128 A.L.R. 540; Ontario Hydro v. Denison Mines Ltd., 1992 CarswellOnt 3497; British Columbia v.Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473; Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6,[2009] 1 S.C.R. 157; 2176693 Ontario Ltd. v. Cora Franchise Group Inc., 2015 ONCA 152, 124 O.R. (3d) 776; Rent-A-Center, West,Inc. v. Jackson, 561 U.S. 63 (2010).

Statutes and Regulations Cited Arbitration Act, 1991, S.O. 1991, c. 17, ss. 1, 2(1)(b), 3, 6, 7, 8, 9, 10, 15, 17(1), (2), (8), 19, 20, 22, 31, 45, 46, 47, 48. Civil Code of Québec. Constitution Act, 1867, s. 96. Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A, ss. 7, 8. Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106. Employment Standards Act, 2000, S.O. 2000, c. 41, ss. 1(1), 5, 5.1(1), 96, 98(1). Energy Consumer Protection Act, 2010, S.O. 2010, c. 8, s. 3(3). Fair Workplaces, Better Jobs Act, 2017, S.O. 2017, c. 22.

International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5, ss. 5(1), (3), 9, Sch. 2. Payday Loans Act, 2008, S.O. 2008, c. 9, s. 39(2). Treaties and Other International Instruments Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Can. T.S. 1986 No. 43. United Nations. Commission on International Trade Law. Analytical Commentary on Draft Text of a Model Law on InternationalCommercial Arbitration: Report of the Secretary-General, U.N. Doc. A/CN.9/264, March 25, 1985. United Nations. Commission on International Trade Law.

UNCITRAL Model Law on International Commercial Arbitration, U.N. Doc.A/40/17, Ann. I, June 21, 1985, arts. 1(1), (3)(a), (4)(b), 7, 8(1), 10, 11(3), 16(1), 19(2), 20(1), (2). Authors Cited Alberta Law Reform Institute. Final Report No. 103. Arbitration Act: Stay and Appeal Issues. Edmonton, 2013. American Law Institute, and National Conference of Commissioners on Uniform State Laws. Proposed Amendments to UniformCommercial Code

Article 2 — Sales: With Prefatory Note and Proposed Comments. Chicago, 2002. Atiyah, P. S. Essays on Contract. New York: Oxford University Press, 1986. Beale, Hugh, ed. Chitty on Contracts, vol. II, Specific Contracts, 33rd ed. London: Sweet & Maxwell/Thomson Reuters, 2018. Ben-Ishai, Stephanie, and David R. Percy, eds. Contracts: Cases and Commentaries, 10th ed. Toronto: Thomson Reuters, 2018.

Benson, Peter. Justice in Transactions: A Theory of Contract Law . Cambridge, Mass.: Harvard University Press, 2019. Bermann, George A. “Mandatory rules of law in international arbitration”, in Franco Ferrari and Stefan Kröll, eds., Conflict of Laws in International Arbitration . Munich: Sellier European Law Publishers, 2011, 325. Bigwood, Rick. “Antipodean Reflections on the Canadian Unconscionability Doctrine” (2005), 84 Can. Bar Rev. 171. Bigwood, Rick. “Rescuing the Canadian Unconscionability Doctrine? Reflections on the Court’s ‘Applicable Principles’ in Downer v. Pitcher ” (2018), 60 Can. Bus. L.J. 124.

Blackaby, Nigel, et al. Redfern and Hunter on International Arbitration , 6th ed. Oxford: Oxford University Press, 2015. Bogden, John-Paul F. “On the ‘Agreement Most Foul’: A Reconsideration of the Doctrine of Unconscionability” (1997), 25 Man. L.J. 187. Born, Gary B. International Commercial Arbitration , vol. I, International Arbitration Agreements , 2nd ed. Alphen aan den Rijn, The Netherlands: Kluwer Law International, 2014. Born, Gary B. International Commercial Arbitration , vol. II, International Arbitral Procedures and Proceedings , 2nd ed.

Alphen aan den Rijn, The Netherlands: Kluwer Law International, 2014. Braucher, Jean. “Unconscionability in the Age of Sophisticated Mass-Market Framing Strategies and the Modern Administrative State” (2007), 45 Can. Bus. L.J. 382. Brudner, Alan. “Reconstructing contracts” (1993), 43 U.T.L.J. 1. Burrows, Andrew. A Restatement of the English Law of Contract . New York: Oxford University Press, 2016. Casey, J. Brian. Arbitration Law of Canada: Practice and Procedure , 3rd ed. Huntington, N.Y.: Juris, 2017. Chen-Wishart, Mindy. Contract Law , 6th ed. New York: Oxford University Press, 2018. Chen-Wishart, Mindy.

Unconscionable Bargains . Toronto: Butterworths, 1989. Crawford, Bradley E. “Restitution — Unconscionable Transaction — Undue Advantage Taken of Inequality Between Parties” (1966), 44 Can. Bar Rev. 142. Eisenberg, Melvin Aron. “The Bargain Principle and Its Limits” (1982), 95 Harv. L. Rev. 741. Estlund , Cynthia. “The Black Hole of Mandatory Arbitration” (2018), 96 N.C. L. Rev. 679. Feehily, Ronán. “Separability in international commercial arbitration; confluence, conflict and the appropriate limitations in the development and application of the doctrine” (2018), 34 Arb. Intl. 355. Fortier, L.

Yves. “Delimiting the Spheres of Judicial and Arbitral Power: ‘Beware, my Lord, of Jealousy’” (2001), 80 Can. Bar Rev. 143. Gordley, James. “Equality in Exchange” (1981), 69 Cal. L. Rev. 1587. Grammond, Sébastien. “The Regulation of Abusive or Unconscionable Clauses from a Comparative Law Perspective” (2010), 49 Can. Bus. L.J. 345. Horton, William G. “A Brief History of Arbitration” (2017), 47 Adv. Q. 12. Hunt, Chris D. L. “Unconscionability Three Ways: Unfairness, Consent and Exploitation”, (2020), 96 S.C.L.R. 37 . Hunt, Chris D.

L., and Milad Javdan. “Apparitions of Doctrines Past: Fundamental Breach and Exculpatory Clauses in the Post- Tercon Jurisprudence” (2018), 60 Can. Bus. L.J. 309. International Court of Arbitration, and International Centre for ADR. Arbitration Rules, Mediation Rules . Paris: International Chamber of Commerce, 2016. Kain, Brandon, and Douglas T. Yoshida. “The Doctrine of Public Policy in Canadian Contract Law”, in Todd L. Archibald and Randall Scott Echlin, eds., Annual Review of Civil Litigation 2007 . Toronto: Thomson Carswell, 2007, 1. Llewellyn, Karl N. The Common Law Tradition: Deciding Appeals .

Toronto: Little, Brown, 1960 (2016 reprint). Manwaring, J. A. “Unconscionability: Contested Values, Competing Theories and Choice of Rule in Contract Law” (1993), 25 Ottawa L. Rev. 235. McCamus, John D. The Law of Contracts , 2nd ed. Toronto: Irwin Law, 2012. McEwan, J. Kenneth, and Ludmila B. Herbst. Commercial Arbitration in Canada: A Guide to Domestic and International Arbitrations . Toronto: Thomson Reuters, 2017 (loose-leaf updated December 2018, release 16). McInnes, Mitchell. The Canadian Law of Unjust Enrichment and Restitution . Markham, Ont.: LexisNexis, 2014.

Ontario. Ministry of Labour, Training and Skills Development. The Changing Workplaces Review: An Agenda for Workplace Rights — Final Report . Toronto, 2017. Paulsson, Jan. The Idea of Arbitration . Oxford: Oxford University Press, 2013. Peden, John R. The Law of Unjust Contracts: Including the Contracts Review Act 1980 (NSW) With Detailed Annotations Procedure and Pleadings . Scarborough, Ont.: Butterworths, 1982. Pitel, Stephen G. A., and Nicholas S. Rafferty. Conflict of Laws , 2nd ed. Toronto: Irwin Law, 2016. Radin, Margaret Jane. “Access to Justice and Abuses of Contract” (2016), 33 Windsor Y.B.

Access Just. 177. Reiter, B. J. “Unconscionability: Is There a Choice? A Reply to Professor Hasson” (1980), 4 Can. Bus. L.J. 403. Rickett, Charles. “Unconscionability and Commercial Law” (2005), 24 U.Q.L.J. 73. Rotman, Leonard I. “The ‘Fusion’ of Law and Equity?: A Canadian Perspective on the Substantive, Jurisdictional, or Non-Fusion of Legal and Equitable Matters” (2016), 2 C.J.C.C.L. 497. Smith, Stephen A. Contract Theory . New York: Oxford University Press, 2004. Swan , Angela, Jakub Adamski and Annie Y. Na. Canadian Contract Law , 4th ed. Toronto: LexisNexis, 2018.

Thal, Spencer Nathan. “The Inequality of Bargaining Power Doctrine: the Problem of Defining Contractual Unfairness” (1988), 8 Oxford J. Legal Stud. 17. Uniform Law Conference of Canada. Uniform Arbitration Act , 1990 (online: https://www.ulcc.ca/images/stories/Uniform_Acts_EN/Arbitrat_En.pdf; archived version: https://www.scc-csc.ca/cso-dce/2020SCC- CSC16_1_eng.pdf ). United Nations. Commission on International Trade Law. UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration . New York, 2012. van den Berg, Albert Jan, ed. Yearbook Commercial Arbitration 1999 , vol. XXIVa.

Alphen aan den Rijn, The Netherlands: Kluwer Law International, 1999. Waddams, S. M. “Good Faith, Unconscionability and Reasonable Expectations” (1995), 9 J.C.L. 55. Waddams, S. M. The Law of Contracts , 7th ed. Toronto: Thomson Reuters, 2017. Waddams, Stephen. “Abusive or Unconscionable Clauses from a Common Law Perspective” (2010), 49 Can. Bus. L.J. 378. Waddams, Stephen. Principle and Policy in Contract Law: Competing or Complementary Concepts? New York: Cambridge University Press, 2011. Waddams, Stephen. “Review Essay: The Problem of Standard Form Contracts: A Retreat to Formalism” (2013), 53 Can. Bus.

L.J. 475. Waddams, Stephen. Sanctity of Contracts in a Secular Age: Equity, Fairness and Enrichment . New York: Cambridge University Press, 2019. Walker, Janet. “Canada’s Place in the World of International Arbitration” (2019), 1 Can. J. Comm. Arb. 1. Walsh, Catherine. “The Uses and Abuses of Party Autonomy in International Contracts” (2010), 60 U.N.B.L.J. 12. Watson Hamilton, Jonnette. “Pre-Dispute Consumer Arbitration Clauses: Denying Access to Justice?” (2006), 51 McGill L.J. 693. Wilmot-Smith, Frederick. Equal Justice: Fair Legal Systems in an Unfair World . Cambridge, Mass.: Harvard University Press, 2019.

Woodward , William J., Jr. “Finding the Contract in Contracts for Law, Forum and Arbitration” (2006), 2 Hastings Bus. L.J. 1. APPEAL from a judgment of the Ontario Court of Appeal (Feldman, Pardu and Nordheimer JJ.A.), 2019 ONCA 1 , 145 O.R. (3d) 81, 430 D.L.R. (4th) 410, 31 C.P.C. (8th) 1 , 52 C.C.E.L. (4th) 10, 85 B.L.R. (5th) 1, 2019 CLLC ¶210-027, [2019] O.J. No. 1 (QL), 2019 CarswellOnt 1 (WL Can.), setting aside a decision of Perell J., 2018 ONSC 718 , 421 D.L.R. (4th) 343, 17 C.P.C. (8th) 342 , 79 B.L.R. (5th) 136, [2018] O.J. No. 502 (QL), 2018 CarswellOnt 1090 (WL Can.).

Appeal dismissed, Côté J. dissenting. Linda M. Plumpton , Lisa Talbot and Sarah Whitmore , for the appellants. Michael Wright , Lior Samfiru and Danielle Stampley , for the respondent. Christopher P. Thompson and Paul Sheridan , for the intervener the Attorney General of Ontario. John Siwiec , for the intervener the Young Canadian Arbitration Practitioners. Robert Deane and Craig Chiasson , for the intervener the Arbitration Place. Alexandra Monkhouse and Andrew Monkhouse , for the intervener Don Valley Community Legal Services.

Anthony Daimsis , for the intervener the Canadian Federation of Independent Business. Marina Pavlovic and Johann Kwan , for the intervener the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic. Nabila F. Qureshi and Karin Baqi , for the interveners the Income Security Advocacy Centre and Parkdale Community Legal Services. Steven Barrett and Joshua Mandryk , for the intervener the United Food and Commercial Workers Canada. Kevin Simms and John Bartolomeo , for the intervener the Workers’ Health and Safety Legal Clinic.

Robert Carson and Lauren Harper , for the intervener the Montreal Economic Institute. Alyssa Tomkins and James Plotkin , for the intervener the Canadian American Bar Association. Joseph C. McArthur and Rahat Godil , for the interveners the Chartered Institute of Arbitrators (Canada) Inc. and the Toronto Commercial Arbitration Society. Matthew Milne-Smith and Chantelle Cseh , for the intervener the Canadian Chamber of Commerce. Andres C. Garin and Alison FitzGerald , for the intervener the International Chamber of Commerce. Mohsen Seddigh and David Sterns , for the intervener the Consumers Council of Canada.

Wes McMillan and Greg J. Allen , for the intervener the Community Legal Assistance Society. Andrew D. Little and Ranjan K. Agarwal , for the intervener ADR Chambers Inc.

The judgment of Wagner C.J. and Abella, Moldaver, Karakatsanis, Rowe, Martin and Kasirer JJ. was delivered by [ 1 ] Abella and Rowe JJ. — In this appeal, the Court determines who has authority to decide whether an Uber driver is or is not an “employee” within the meaning of Ontario’s Employment Standards Act, 2000 , S.O. 2000, c. 41 (“ ESA ”): the courts of Ontario or an arbitrator in the Netherlands, as provided for in the contracts of adhesion between Uber and its drivers? [ 2 ] David Heller provides food delivery services in Toronto using Uber’s software applications. [1] To become a driver for Uber, Mr.

Heller had to accept, without negotiation, the terms of Uber’s standard form services agreement. Under the terms of the agreement, Mr. Heller was required to resolve any dispute with Uber through mediation and arbitration in the Netherlands. The mediation and arbitration process requires up-front administrative and filing fees of US$14,500, plus legal fees and other costs of participation. Mr. Heller earns between $400-$600 a week. The fees represent most of his annual income. [ 3 ] Mr. Heller started a class proceeding against Uber in 2017 for violations of the ESA .

Uber brought a motion to stay the class proceeding in favour of arbitration in the Netherlands. In response, Mr. Heller took the position that the arbitration clause [2] in Uber’s services agreements is invalid, both because it is unconscionable and because it contracts out of mandatory provisions of the ESA . The motion judge held that he did not have the authority to decide whether the arbitration agreement was valid and stayed Mr. Heller’s proceeding ( 2018 ONSC 718 , 421 D.L.R. (4th) 343 ).

The Court of Appeal reversed this order , determining, among other things, that the arbitration agreement was unconscionable based on the inequality of bargaining power between the parties and the improvident cost of arbitration ( 2019 ONCA 1 , 430 D.L.R. (4th) 410). [ 4 ] We agree with the Court of Appeal. This is an arbitration agreement that makes it impossible for one party to arbitrate. It is a classic case of unconscionability. Background [ 5 ] Uber operates a global business in more than 600 cities and 77 countries, with a customer base of millions of people and businesses.

The company has been operating in Ontario for eight years. [ 6 ] Uber’s software applications are widely used to arrange personal transportation (the Rider and Driver Apps) and food delivery (the UberEATS App). Customers and drivers can download Uber’s Apps onto their smartphones. Customers use the Apps to place requests for transportation or food delivery. Drivers use the Apps to view and respond to customer requests.

Payment between the customers and drivers is facilitated through Uber’s Apps, and Uber takes a share of the drivers’ payments. [ 7 ] The first time drivers log on to an Uber App, they are presented with a standard form services agreement of around 14 pages. To accept the agreement, the driver must click “I agree” twice. Once the driver does so, the Uber App is activated and the services agreement is uploaded to a “Driver Portal”, accessible to the driver through an online account.

The parties to the services agreement are the driver and Uber subsidiaries incorporated in the Netherlands with offices in Amsterdam. [ 8 ] The services agreement includes mandatory arbitration and choice of law clauses, which state: Governing Law; Arbitration. Except as otherwise set forth in this Agreement, this Agreement shall be exclusively governed by and construed in accordance with the laws of The Netherlands, excluding its rules on conflicts of laws . . . .

Any dispute, conflict or controversy howsoever arising out of or broadly in connection with or relating to this Agreement, including those relating to its validity, its construction or its enforceability, shall be first mandatorily submitted to mediation proceedings under the International Chamber of Commerce Mediation Rules (“ICC Mediation Rules”). If such dispute has not been settled within sixty (60) days after a request for

mediation has been submitted under such ICC Mediation Rules, such dispute can be referred to and shall be exclusively and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Arbitration Rules”) . . . . The dispute shall be resolved by one (1) arbitrator appointed in accordance with ICC Rules. The place of arbitration shall be Amsterdam, The Netherlands. (C.A. reasons, at para. 11) [ 9 ] The choice of law clause requires the agreement to be “governed by and construed in accordance with the laws of The Netherlands, excluding its rules on conflicts of laws”.

The arbitration clause requires all disputes to be submitted first to mandatory mediation and, if that fails, then to arbitration, both according to the International Chamber of Commerce (“ICC”)’s Rules. The place of the arbitration is to be in Amsterdam. [ 10 ] The up-front cost to begin an arbitration at the ICC according to the ICC Rules amounts to about US$14,500. The fees do not include legal fees, lost wages and other costs of participation. The services agreement provides no information about the cost of mediation and arbitration. [ 11 ] Mr.

Heller is an Ontario resident who entered into contracts with corporations that are part of the Uber enterprise to be a driver. [3] He earns approximately $400-$600 per week based on 40 to 50 hours of work, or $20,800-$31,200 per year, before taxes and expenses. The costs to arbitrate a claim against Uber equal all or most of the gross annual income he would earn working full-time as an Uber driver. [ 12 ] Mr. Heller started this proposed class action against Uber in 2017.

He seeks relief for four claims in this proceeding: a claim for breach of the ESA , a claim for breach of contract based on either implied terms or the duty of good faith, a claim for negligence, and a claim for unjust enrichment. All of these claims, however, depend on the ESA for their success. The essence of Mr. Heller’s position is that he is an employee within the meaning of the ESA . [ 13 ] Uber, relying on the arbitration clause in its services agreement with Mr. Heller, sought a stay of proceedings in favour of arbitration in the Netherlands. [4] Mr.

Heller argued that the arbitration clause was invalid on two grounds: it was unconscionable, and it contracted out of mandatory ESA protections. [ 14 ] The motion judge stayed the proceeding in favour of arbitration in the Netherlands. He began his analysis by determining which arbitration legislation applied: the Arbitration Act, 1991 , S.O. 1991, c. 17 (“ AA ” or “ Arbitration Act ”), or the International Commercial Arbitration Act, 2017 , S.O. 2017, c. 2, Sch. 5 (“ ICAA ”). The ICAA applies to arbitration agreements that are “international” and “commercial”.

The motion judge proceeded on the basis that the ICAA applied because Mr. Heller and the contracting Uber companies were based in different jurisdictions, and because there was, in the motion judge’s view, a prima facie case that the agreement was a commercial licensing arrangement. [ 15 ] He then determined that the arbitration agreement’s validity had to be referred to arbitration in the Netherlands, in accordance with the principle that arbitrators are competent to determine their own jurisdiction (the “competence-competence” principle).

In the alternative, the motion judge held that the arbitration clause was not invalid due to unconscionability or because it contracted out of the ESA . He accordingly stayed the proceeding in favour of arbitration in the Netherlands. [ 16 ] The Court of Appeal allowed Mr. Heller’s appeal, finding that the arbitration clause was void both because it was unconscionable and because it contracted out of the ESA . Writing for a unanimous court, Nordheimer J.A. concluded that Mr.

Heller’s objections to the arbitration agreement did not need to be referred to an arbitrator in the Netherlands and could be dealt with by a court in Ontario. He declined to resolve whether the AA or the ICAA applied, holding that the result would be the same under either statute. He found the arbitration clause to be unconscionable because it was an unfair bargain and resulted from significant inequality of bargaining power between Mr. Heller and Uber. He further noted that there was minimal chance of Mr.

Heller having received legal advice and that it was safe to infer that Uber knowingly and intentionally chose this “Arbitration Clause in order to favour itself and thus take advantage of its drivers, who are clearly vulnerable to the market strength of Uber”. The court also found the arbitration clause void because it contracted out of the ESA . [ 17 ] As a result, the Court of Appeal allowed Mr. Heller’s appeal, and set aside the order of the motion judge granting Uber’s motion to stay.

Analysis [ 18 ] Throughout these proceedings, the parties have disagreed on the arbitration statute applicable to their dispute. Uber argued that the ICAA applies and Mr. Heller argued that the applicable legislation is the AA . [ 19 ] We agree with Mr. Heller. The parties’ dispute is fundamentally about labour and employment. The ICAA was not meant to apply to such cases. [5] [ 20 ] The ICAA and AA are exclusive. If the ICAA governs this agreement, the AA does not, and vice versa ( AA , s. 2(1) (b)).

As the Superior Court correctly identified, whether the ICAA governs depends on whether the arbitration agreement is “international” and “commercial”. That the agreement here is international is not in dispute. Whether the agreement is commercial is contested. To answer this question, one must understand the legislative scheme of the ICAA . [ 21 ] The ICAA implements two international instruments: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards , Can.

T.S. 1986 No. 43, adopted by the United Nations Conference on International Commercial Arbitration in New York on June 10, 1958 (“ Convention ”) and the UNCITRAL Model Law on International Commercial Arbitration , U.N. Doc. A/40/17, Ann. I, adopted by the United Nations Commission on International Trade Law on June 21, 1985, as amended by the United Nations Commission on International Trade Law on July 7, 2006 (“ Model Law ”). Only the Model Law is relevant here.

[22] Section 5(3) of the ICAA states that the Model Law applies to “international commercial arbitration agreements andawards made in international commercial arbitrations”. The meaning of “commercial” in this

section of the ICAA must be the same as themeaning of “commercial” under the Model Law, as the latter states that it “applies to international commercial arbitration” (art. 1(1)). [23] While the Model Law does not define the term “commercial”, a footnote to art. 1(1) provides some guidance: The term “commercial” should be given a wide

interpretation so as to cover matters arising from all relationships of a commercialnature, whether contractual or not.

Relationships of a commercial nature include, but are not limited to, the following transactions: anytrade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency;factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitationagreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea,rail or road. (Model Law, art. 1(1), fn. 2) [24] The Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration: Report of theSecretary-General further explains that “labour or employment disputes” are not covered by the term “commercial”, “despite theirrelation to business”: Although the examples listed include almost all types of contexts known to have given rise to disputes dealt with in internationalcommercial arbitrations, the list is expressly not exhaustive.

Therefore, also covered as commercial would be transactions such as supplyof electric energy, transport of liquified gas via pipeline and even “non-transactions” such as claims for damages arising in a commercialcontext. Not covered are, for example, labour or employment disputes and ordinary consumer claims, despite their relation to business.[Emphasis added.] (United Nations Commission on International Trade Law, Analytical Commentary on Draft Text of a Model Law on InternationalCommercial Arbitration: Report of the Secretary-General, U.N. Doc.

A/CN.9/264, March 25, 1985, at p. 10; see also p. 11.) [25] Two points emerge from this commentary. First, a court must determine whether the ICAA applies by examining thenature of the parties’ dispute, not by making findings about their relationship. A court can more readily decide whether the ICAA applies(or an arbitrator can more readily decide whether the Model Law applies) by analysing pleadings than by making findings of fact as tothe nature of the relationship.

Characterising a dispute requires the decision-maker to examine only the pleadings; characterising arelationship requires the decision-maker to consider a variety of circumstances in order to make findings of fact. If an intensive fact-finding inquiry were needed to decide if the ICAA or the Model Law applies, it would slow the wheels of an arbitration, if not grind themto a halt. [26] The second point to draw is that an employment dispute is not covered by the word “commercial”. The question ofwhether someone is an employee is the most fundamental of employment disputes.

It follows that if an employment dispute is excludedfrom the application of the Model Law, then a dispute over whether Mr. Heller is an employee is similarly excluded. This is not the typeof dispute that the Model Law is intended to govern, and thus it is not the type of dispute that the ICAA is intended to govern. [27] This result is consistent with what courts have held (Patel v. Kanbay International Inc., 2008 ONCA 867, 93 O.R.(3d) 588, at paras. 11-13; Borowski v. Fiedler (Heinrich) Perforiertechnik GmbH (1994), (AB KB), 158 A.R. 213(Q.B.); Rhinehart v.

Legend 3D Canada Inc., 2019 ONSC 3296, 56 C.C.E.L. (4th) 125, at para. 27; Ross v. Christian & Timbers Inc.(2002), (ON SC), 23 B.L.R. (3d) 297 (Ont. S.C.J.), at para. 11). It is also consistent with the Model Law’s referenceto “trade” transactions, which, as Gary B. Born observes, “arguably connot[es] involvement by traders or merchants, as distinguishedfrom consumers or employees” (International Commercial Arbitration, vol. I, International Arbitration Agreements (2nd ed. 2014), at p.309). Further, one could draw a negative inference from the definition’s omission of “employment” relations (p. 309, fn. 454).

It seemsunlikely to us that the drafters of the Model Law would have included such a thorough list of included commercial relationships and notconsidered whether to include “employment”. [28] Employment disputes, in sum, are not covered by the ICAA. The AA therefore governs. [29] The AA directs courts, on motion of a party, to stay judicial proceedings when there is an applicable arbitrationagreement: Stay 7

(1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under theagreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay theproceeding. [30] But a court has discretion to retain jurisdiction and decline to stay proceedings in five circumstances enumerated in s.7(2): Exceptions

(2) However, the court may refuse to stay the proceeding in any of the following cases: 1. A party entered into the arbitration agreement while under a legal incapacity. 2. The arbitration agreement is invalid. 3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law.

4. The motion was brought with undue delay. 5. The matter is a proper one for default or

summary judgment. The only relevant exception here is para. 2 of s. 7(2), which gives a court discretion to refuse to grant a stay if the court determines thatthe arbitration agreement is invalid. [31] The AA is silent on what principles courts should consider in exercising their discretion to determine the validity of anarbitration agreement under s. 7(2). But some criteria were set out in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801, and Seidel v.

TELUS Communications Inc., 2011 SCC 15 , [2011] 1 S.C.R. 531, whichinterpreted similar arbitration regimes in Quebec and British Columbia. In those decisions, this Court set out a framework for when acourt should decide if an arbitrator has jurisdiction, instead of referring that question to the arbitrator out of respect for the competence-competence principle. [32] Under the Dell framework, the degree to which courts are permitted to analyse the evidentiary record depends on thenature of the jurisdictional challenge.

Where pure questions of law are in dispute, the court is free to resolve the issue of jurisdiction(para. 84). Where questions of fact alone are in dispute, the court must “normally” refer the case to arbitration (para. 85).

Wherequestions of mixed fact and law are in dispute, the court must refer the case to arbitration unless the relevant factual questions require“only superficial consideration of the documentary evidence in the record” (para. 85). [33] In setting out this framework, Dell adopted an approach to the exercise of discretion that was designed to be faithful towhat the international arbitration literature calls the “prima facie” analysis test as regards questions of fact and questions of mixed factand law (para. 83).

Under this test, the court must “refer the parties to arbitration unless the arbitration agreement is manifestly tainted bya defect rendering it invalid or inapplicable” (para. 75). To be so manifestly tainted, the invalidity must be “incontestable”, such that noserious debate can arise about the validity (para. 76, quoting Éric Loquin, “Compétence arbitrale”, in Juris-classeur Procédure civile(loose-leaf), fasc. 1034, at No. 105).

Rather than adopting these standards literally, Dell gave practical effect to what was set out in thearbitration literature by creating a test whereby a court refers all challenges of an arbitrator’s jurisdiction to the arbitrator unless they raisepure questions of law, or questions of mixed fact and law that require only superficial consideration of the evidence in the record (paras.84-85). [34] The doctrine established in Dell is neatly summarized in its companion case, Rogers Wireless Inc. v.

Muroff, 2007SCC 35 , [2007] 2 S.C.R. 921, at para. 11: The majority of the Court held that, when an arbitration clause exists, any challenges to the jurisdiction of the arbitrator must first bereferred to the arbitrator. Courts should derogate from this general rule and decide the question first only where the challenge to thearbitrator’s jurisdiction concerns a question of law alone. Where a question concerning jurisdiction of an arbitrator requires the admissionand examination of factual proof, normally courts must refer such questions to arbitration.

For questions of mixed law and fact, courtsmust also favour referral to arbitration, and the only exception occurs where answering questions of fact entails a superficial examinationof the documentary proof in the record and where the court is convinced that the challenge is not a delaying tactic or will not prejudicethe recourse to arbitration. [35] The parties agree that the framework from Dell and Seidel applies to Ontario’s Arbitration Act. We agree, based onthe similarities between the arbitration regimes in Ontario, British Columbia and Quebec.

The two exceptions to arbitral referral in Delland Seidel therefore apply in Ontario. This case, according to Mr. Heller, engages one of those exceptions because it requires at mostonly a superficial review of the record. [36] Neither Dell nor Seidel fully defined what is meant by a “superficial” review. The essential question, in our view, iswhether the necessary legal conclusions can be drawn from facts that are either evident on the face of the record or undisputed by theparties (see Trainor v. Fundstream Inc., 2019 ABQB 800, at para. 23 ; see also Alberta Medical Association v.

Alberta, 2012ABQB 113, 537 A.R. 75, at para. 26). [37] Although it is possible to resolve the validity of Uber’s arbitration agreement through a superficial review of therecord, we are of the view that this case also raises an issue of accessibility that was not raised on the facts in Dell and justifies departingfrom the general rule of arbitral referral. As Dell itself acknowledged, the rule of systematic referral of challenges to jurisdictionrequiring a review of factual evidence applies “normally” (para. 85; see also Muroff, at para. 11).

This is one of those abnormal times. [38] The underlying assumption made in Dell is that if the court does not decide an issue, then the arbitrator will. As Dellsays, the matter “must be resolved first by the arbitrator” (para. 84). Dell did not contemplate a scenario wherein the matter would neverbe resolved if the stay were granted.

This raises obvious practical problems of access to justice that the Ontario legislature could not haveintended when giving courts the power to refuse a stay. [39] One way (among others) in which the validity of an arbitration agreement may not be determined is when anarbitration is fundamentally too costly or otherwise inaccessible. This could occur because the fees to begin arbitration are significantrelative to the plaintiff’s claim or because the plaintiff cannot reasonably reach the physical location of the arbitration.

Another examplemight be a foreign choice of law clause that circumvents mandatory local policy, such as a clause that would prevent an arbitrator fromgiving effect to the protections in Ontario employment law. In such situations, staying the action in favour of arbitration would betantamount to denying relief for the claim.

The arbitration agreement would, in effect, be insulated from meaningful challenge (seeJonnette Watson Hamilton, “Pre-Dispute Consumer Arbitration Clauses: Denying Access to Justice?” (2006), 51 McGill L.J. 693;Catherine Walsh, “The Uses and Abuses of Party Autonomy in International Contracts” (2010), 60 U.N.B.L.J. 12; Cynthia Estlund, “TheBlack Hole of Mandatory Arbitration” (2018), 96 N.C. L. Rev. 679). [40] These situations were not contemplated in Dell. The core of Dell depends on the assumption that if a court does notdecide an issue, the arbitrator will.

[41] Against these real risks of staying an action in favour of an invalid arbitration, one could pit the risk of a plaintiffseeking to obstruct an arbitration by advancing spurious arguments against the validity of the arbitration. This concern animated Dell(see paras. 84 and 86). [42] In our view, there are ways to mitigate this concern that make the overall calculus favour departing from the generalrule of referring the matter to the arbitrator in these situations. Courts have many ways of preventing the misuse of court processes forimproper ends.

Proceedings that appear vexatious can be handled by requiring security for costs and by suitable awards of costs. InEngland, courts have awarded full indemnity costs where a party improperly ignored arbitral jurisdiction (Hugh Beale, ed., Chitty onContracts (33rd ed. 2018), vol. II, Specific Contracts, at para. 32-065; A. v. B. (No.2), [2007] EWHC 54 (Comm.), [2007] 1 All E.R.(Comm.) 633, at para. 15; Kyrgyz Mobil Tel Limited v. Fellowes International Holdings Limited [2005] EWHC 1329, 2005 WL 6514129(Q.B.), at paras. 43-44).

Further, if the party who successfully enforced an arbitration agreement were to bring an action, depending onthe circumstances they might be able to recover damages for breach of contract, that contract being the agreement to arbitrate (Beale, atpara. 32-052; West Tankers Inc. v. Allianz SpA, [2012] EWHC 854 (Comm.), [2012] 2 All E.R. (Comm.) 395, at para. 77). [43] Moreover, Dell itse

[…]