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Farewell to Forum Non Conveniens?

3 minute read

In a recent Ontario motion decision, the judge said ‘farewell’ to forum non conveniens in answer to the question “[i]n the age of Zoom, is any forum more non conveniens than another?”

Justice E.M. Morgan in Kore Meals LLC v. Freshii Development LLC, 2021 ONSC 2896, granted a motion for a stay of the lawsuit on the basis of an arbitration clause in an agreement between the parties.  The clause required disputes to be submitted for arbitration by the American Arbitration Association in the city in which Freshii Development had its business address.

The plaintiff objected on several grounds, including that Freshii Development had no real presence in the US city of its business address (just a postal box inside a UPS store).The lawsuit also included the parent company, which is an Ontario corporation based out of Toronto, and the injunctive relief sought would be outside of an arbitrator’s authority.

The applicable law was under the International Commercial Arbitration Act, 2017, S.O. 2017, c.2, Sch.5. The test for a stay under that Act was held by Justice Morgan to be the same as under the Ontario Arbitration Act, 1991, c.17, namely:

  1. Is there an arbitration agreement?
  2. What is the subject matter of the dispute?
  3. What is the scope of the arbitration agreement?
  4. Does the dispute arguably fall within the scope of the arbitration agreement?
  5. Are there grounds on which the court should refuse to stay the action?

Justice Morgan followed the decision of the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, [2019] 2 SCR 144.  The court held in the TELUS case that the factors to be considered in granting or refusing a stay of arbitral proceedings include the forum non conveniens-type analysis as to whether the forum/venue identified in the arbitral agreement is unfair or impractical for one or another of the parties. The factors to be considered included those affecting the convenience or expense (the domicile of the parties, the locations of witnesses and pieces of evidence, parallel proceedings, juridical advantage, the interests of both parties, and the interests of justice) as well as the law governing the relevant transaction.

The location of the organization identified by the arbitration clause to conduct the arbitration – AAA – was unknown.  The submissions would be made online and it was expected that the hearing itself would be online given the pandemic moved most proceedings of this nature to online forums.  Justice Morgan concluded that arguments based on unfairness or impracticality of a forum/venue were undermined where the hearings are to be held by videoconference, documents filed in digital form and witnesses examined from remote locations.

Justice Morgan concluded that judges can say:

[F]arewell to what was until recently a familiar doctrinal presence in the courthouse.  And what is true for forum non conveniens is equally true for the access to justice approach to the arbitration question. Chicago and Toronto are all on the same cyber street. They are accessed in the identical way with a voice command or the click of a finger. No one venue is more or less unfair or impractical than another.

It will be interesting to see whether the courts will welcome back forum non conveniens when we say farewell to pandemic restrictions, with at least the possibility of in-person proceedings again, or whether this will be a more permanent “good-bye”.

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Carolyn Brandow

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