In Yegre EB Ltd. v Seguin, 2024 BCCA 365, the Court of Appeal for British Columbia confirmed that if parties wish to submit their disputes to only one jurisdiction they must use very clear language to that effect. The words “submit” or “attorn” by themselves are not good enough. Parties drafting agreements and their counsel should be alert to whether they wish to have an exclusive jurisdiction clause or simply a clause giving a jurisdiction non-exclusive authority to hear the dispute and turn their minds to the specific wording to make their choice clear.
Background
This case concerned a purchase agreement where the appellant bought five properties, two in B.C. and three in Ontario, from the respondent. The appellant later sued the respondent in British Columbia alleging, among other things, that the appellant was induced to enter the agreement by the respondents’ fraudulent misrepresentations.
Their contract contained a forum selection clause, a common instrument for parties to identify the court in which they wish to adjudicate their disputes. This one provided that the parties “submitted” to the jurisdiction of the Alberta courts “for all purposes arising in connection with this Agreement” (the “Clause”).
The respondents applied to stay the action in British Columbia, relying on the Clause. The respondent argued that the Clause gave the Alberta courts exclusive jurisdiction. The appellant contended that the Clause merely reflected the parties’ agreement to submit to the non-exclusive jurisdiction of the Alberta courts, but does not preclude a claim from being filed in British Columbia; that is, that the jurisdiction of the Alberta courts is non-exclusive.
The British Columbia Supreme Court found that the clause was valid and enforceable and gave Alberta exclusive jurisdiction over the matter. The court granted the stay. The appellant appealed that decision.
The Court of Appeal Decision
The Court of Appeal agreed with the appellant that the judge erred in interpreting the clause as exclusively conferring jurisdiction on the Alberta courts. The Court of Appeal, after a thorough summary of the cases dealing with similar issues, admitted that the law was not entirely “cohesive in the effect to be given similarly-worded clauses”. However, in cases where clauses have been interpreted to confer exclusive jurisdiction, there was some contextual or textual basis to support such a conclusion. The burden was always on the respondents to “demonstrate that the Clause clearly, expressly, and unambiguously reflects the parties’ intention that disputes will exclusively be adjudicated by the Alberta courts.”
Here, there was nothing to support a conclusion that the clause was meant to be exclusive. There were two reasonable interpretations of the clause, read as a whole, including an interpretation of the Clause as intending non-exclusive jurisdiction. Given this ambiguity, the law required it to be interpreted as granting non-exclusive jurisdiction, meaning the British Columbia action should not have been stayed.
Takeaways
This case serves as a reminder to parties when drafting contracts, especially contracts that cross borders in some way, to turn their mind to the question of whether they wish to have one forum that will exclusively hear all disputes arising from the contract. If they do, then care must be taken in the drafting of such agreements. Using words such as “attorn” or “submit” on their own may suggest a non-exclusive choice of forum. The use of the word “exclusive” or “only” for example would have expressly and unambiguously conferred jurisdiction on one court, allowing the parties to move on to the substantive issues in their dispute.
