Canada: The Choice Of Forum Clause Takes Precedence Over Legislative Rules Giving Jurisdiction To Québec Courts

The Supreme Court of Canada has recently rendered an important decision in the case of GreCon Dimter Inc. vs. J.R. Normand Inc. et al.,(July 22, 2005). This case confirms the privileged position which international commercial arbitration currently enjoys and will in all likelihood continue to benefit from in Québec and in Canada.

The Supreme Court held that the parties' decision to submit litigious issues arising from a contractual relationship to a foreign tribunal or to an arbitrator will be enforced despite certain provisions of the Civil Code of Quebec (the "CCQ") which provide for the joining, into a single trial and hearing, of the principal claim and an action in warranty. This case highlights both the importance of a choice of forum clause in a contract and the potential risks of contracting with a party bound by such a clause.

The facts are fairly simple.

GreCon Dimter Inc.("GreCon") is a German corporation which manufactures and sells specialized equipment used in processing plants and saw mills. Defendant J.R. Normand Inc. ("Normand") sells and services industrial wood working machinery. Co-Defendant Scierie Thomas-Louis Tremblay Inc. ("Tremblay") operates a saw mill in the Province of Québec. The case arises out of two contracts. One was entered into by Normand and Tremblay for the supply and delivery of equipment in Québec. The other contract is a contract of sale between GreCon and Normand. The latter contract contains a choice of forum and choice of law clause drafted as follows:

" It is agreed, by and between the seller and buyer, that all disputes and matters whatsoever arising under, in connection with, or instant to this contract... shall be litigated, if at all, in and before a Court located in Alfeld, Germany to the exclusion of the Courts of any other State or country...

This agreement is governed by and construed under the laws of Germany to the exclusion of all other laws of any other state or country (without regard to the principles of conflicts of law)."

Tremblay brought an action in damages against Normand based on a professional seller's liability for latent defects and other faults (the principal action). Normand filed an action in warranty against GreCon shortly thereafter. Normand sought to be indemnified in full by GreCon in the event of an award being made against it in the principal action.

Both the Superior Court of Quebec and the Quebec Court of Appeal dismissed GreCon's declinatory exception by which the jurisdiction of the Québec Courts was challenged on the basis of the choice of forum clause. The Court of Appeal dealt with an apparent conflict between two articles of the CCQ (3139 and 3148) by giving precedence to article 3139 which gives Québec Courts jurisdiction to join a principal action and action in warranty when there is a sufficient nexus or connexity between them.


A unanimous Supreme Court of Canada decided that, by virtue of article 3148, par. 2 CCQ, the jurisdiction of the Quebec Courts is ousted in a personal action of a patrimonial nature once it is established that the parties have chosen by a clear and precise agreement to submit their disputes to a foreign authority or to an arbitrator. According to the Supreme Court, article 3148 of the CCQ recognizes the primacy of the autonomy of the parties' choice. The Court held that "... although the legislature did confer jurisdiction on the Québec authority on the basis of the criteria of jurisdictional connection, such as domicile, fault, the damage or the injurious act, it was careful to give the parties the ability to choose to oust the authorities' jurisdiction when they wished to entrust current or future disputes between them that arise out of a specific legal relationship to a foreign authority or an arbitrator".

The Supreme Court of Canada regarded article 3148 of the CCQ as embracing the letter and spirit of international agreements sponsored by international organizations such as The Hague Conference on Private International Law and the UNCITRAL. The Court also noted that article 3148, par. 2 CCQ is based on articles 5 and 6 of the Convention on the Choice of Courts (November 25, 1965) whose purpose is to give effect to choice of forum clauses.

According to the Supreme Court of Canada, this legislative choice, which provides for the use of arbitration clauses, fosters foreseeability and certainty in international legal transactions.

In order to benefit from such treatment of the choice of forum clause, the party seeking to enforce it must demonstrate that the clause is mandatory and that it clearly and precisely confers exclusive jurisdiction to an arbitral institution or foreign court.

This case overturns the Québec Court of Appeal decision in Guns 'N Roses Missouri Storm Inc. v. Musical Productions Donald K. Donald Inc. [1994] R.J.Q. 1183 which allowed an action in warranty despite contract between the principal defendant and the third party (called in warranty) which contained an arbitration clause.

Also of great importance is the way in which the Supreme Court considers the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). This convention deals not only with the recognition and enforcement of arbitral awards but it also serves to provide legal protection for arbitration agreements. The principles of the New York Convention are incorporated into both the CCQ and the Québec Code of Civil Procedure. Article II (3) of the New York Convention gives primacy to the principle that arbitration agreements must be recognized and enforced. The Québec Code of Civil Procedure gives priority and greater weight to an arbitration clause over the jurisdiction of a Québec authority. Therefore, both national and international norms, confirm the position adopted by the Supreme Court of Canada that the enforcement of an arbitration agreement or choice of forum clause cannot be preempted by procedural rules relating to actions in warranty.

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.

In association with
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions