Docket: CACV2078 Shore Gold Inc. Appellant - v. -, 2012 SKCA 16

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2012 SKCA 16 Date: 20120213 Between: Docket: CACV2078 Shore Gold Inc. Appellant - and - De Beers Canada Inc. Respondent Coram: Klebuc C. J.S., Lane & Smith JJ.A. Counsel: Christopher Boychuk, Q.C. for Shore Gold Inc. Robert Kennedy, Q.C. for De Beers Canada Inc.

Appeal: From: 2011 SKQB 95 Heard: February 13, 2012 Disposition: Appeal Dismissed (orally) Written Reasons: February 23, 2012 By: The Honourable Chief Justice Klebuc In Concurrence: The Honourable Mr. Justice Lane The Honourable Madam Justice Smith Klebuc C.J.S. [ 1 ] Shore Gold and De Beers Canada were participants in the Fort a la Corne Joint Venture (“FLC JV”), which had been established for the purpose of exploring and producing minerals within Saskatchewan.

In connection therewith, they and others entered into a comprehensive agreement dated January 1, 1995, called the “Fort a la Corne Joint Venture Agreement (“the JVA”). It set out the manner in which the operations of the FLC JV were to be conducted. [ 2 ] De Beers Canada was appointed the “Operator” of the FLC JV in accordance with the provisions of the JVA.

As the Operator, it was entitled to recover its general and administrative expenses from the FLC JV, and did so until it resigned from the position of Operator in September 2006. [ 3 ] A dispute subsequently arose between Shore Gold and De Beers Canada as to whether De Beers Canada had charged and collected substantially more than its actual general and administrative expenses and, therefore, was obligated to refund the amount it was overpaid.

When a settlement of the issue could not be negotiated, Shore Gold served a notice to arbitrate on De Beers Canada pursuant to s. 16.01 of the JVA and subsequently applied to the Court of Queen’s Bench pursuant to ss. 7 and 11 of The Arbitration Act, 1992 , S.S. 1992, c. A-24.1 for an order appointing an arbitrator.

De Beers Canada responded by applying for an order striking the notice to arbitrate by Shore Gold on the ground that the aforementioned issue was not arbitral. [ 4 ] The Chambers judge dismissed Shore Gold’s application on the basis that the issue of whether De Beers Canada had been overpaid was not an arbitral issue under s. 16.01 of the JVA. He further struck the notice to arbitrate made by Shore Gold. [ 5 ] In our view, the Chambers judge correctly decided the material issues before him, as reflected in his reasons for judgment.

Based on those reasons, we dismissed the appeal. [ 6 ] The Respondent shall have its costs in the usual manner.