Canada: Handle With Care: Ontario Court Finds Boilerplate Arbitration Clause Doesn’t Apply

A recent decision of the Ontario Superior Court of Justice highlights the importance of drafting arbitration clauses with care. In 2156775 Ontario Inc. v. Just Energy, the court dismissed a motion to stay an action in favour of arbitration, finding that the dispute was not captured by the arbitration clause.


The plaintiff customer allegedly entered into contracts with the defendant Just Energy in 2008 and 2010. The 2008 contract did not include an arbitration clause, but "standard form" terms appended to the 2010 contract did include an arbitration clause that provided, in part:

"Dispute Resolution, Binding Arbitration. Customer may contact Just Energy with regard to a concern or dispute under this Agreement. . . . Both parties will, in good faith, use commercially reasonable efforts to resolve a dispute. If not resolved within 45 days, such dispute will be referred to and finally resolved by binding arbitration pursuant to Governing Law, before a single arbitrator, without the right of appeal to law and/or facts, at an arbitration services organization to be chosen exclusively by Just Energy. . . ." (emphasis added by authors)

The plaintiff commenced a court action in 2013, seeking a declaration that the 2008 and 2010 contracts were void, as well as damages for misrepresentation and negligence, among other things. It also named as a personal defendant an individual who provided marketing services to Just Energy.  Relying on the arbitration clause in the 2010 agreement, Just Energy moved to stay the action in favour of arbitration. The personal defendant, who was not a party to either contract, consented to the dispute proceeding by way of arbitration.


Although Superior Court Justice Wendy Matheson endorsed the principle that parties should be required to resolve their disputes by arbitration where they have agreed to do so, the case was allowed to proceed in the courts. The court set out a two-step framework for analyzing whether a case should proceed by way of arbitration in accordance with an arbitration clause:

  1. Does the dispute fall within the scope of the arbitration agreement?
  2. If yes, should the court exercise its discretion to stay the proceeding (for example, because of the invalidity of the arbitration agreement or other possible reasons set out in section 7(2) of the Ontario Arbitration Act, 1991)?

In the Just Energy case, the parties moving to stay the case in favour of arbitration failed on the first question. The court reasoned that the arbitration clause in the alleged 2010 agreement applied only to disputes "under" the agreement (i.e. the discharge of rights and obligations under the agreement), and not to a challenge to the existence of the agreement itself.  The court contrasted the arbitration clause at issue with clauses in other cases that used broader wording such as "in connection with" or "arising out of" or "touching or concerning." The court also noted that certain arbitration clauses expressly cover disputes relating to the validity of an agreement, and that the clause at hand made no mention of validity. As such, the court concluded that the dispute between the parties – which challenged the validity of the alleged agreements – fell outside the scope of the arbitration agreement.

On its face, the decision is a curious one. The court thoroughly canvassed the authorities in Ontario that are increasingly sending disputes to arbitration, including two recent decisions of the Ontario Court of Appeal; Nazarinia Holdings Inc. v. 2049080 Ontario Inc. in 2010 and Ontario Medical Association v. Willis Canada Inc. in 2013. Among other things, the court in Ontario Medical Association held that courts should stay an action in favour of arbitration where it is (merely) "arguable" that the dispute falls within the arbitration clause. Notably, this is also consistent with English law. For example, in Premium Nafta Products Ltd. v. Fili Shipping Company Ltd., a leading 2007 decision from the U.K. House of Lords, Lord Hoffmann stated that arbitration clauses should be interpreted from the baseline presumption that parties are likely to have intended any dispute arising out of their relationship to be decided by arbitration, unless language in the arbitration clause makes clear that certain questions were intended to be excluded from the arbitrator's jurisdiction. Yet, the court in Just Energy came to the opposite result.


The Just Energy decision signals that if a party relies on an arbitration clause in an attempt to compel arbitration, courts will closely scrutinize the wording of the clause. "Boilerplate" or "standard terms" clauses can be expected to be viewed with heightened scrutiny. Parties who wish to take advantage of the benefits of arbitration should incorporate clauses that clearly set out the types of disputes that are subject to arbitration and those that are not. Failure to do so might result in being required to resolve a future dispute in court, despite an intention to the contrary and despite a growing body of law in Ontario that is otherwise very favourable to arbitration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

3 Nov 2016, Other, Vancouver, Canada

“Risk” is the new black. It’s on the lips of every CEO, CFO, GC and board member — as it should be. Can you spot it? How do you analyze it? Are you equipped to manage it?

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.