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ARTICLE · 07 NOVEMBER 2023

Arbitration Clauses – A Thorny Issue For Third-party Beneficiaries Seeking To Litigate

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This case involves an interesting set of facts in a construction context.

CanadaLitigation, Mediation & Arbitration
Alice Wong
Alice Wong
Emma Johnston
Emma Johnston
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Annie Redmond
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HUSKY OIL OPERATIONS LIMITED V. TECHNIP STONE & WEBSTER PROCESS TECHNOLOGY INC.1

SUMMARY

This case involves an interesting set of facts in a construction context.

Husky Oil Operations Limited ("Husky Oil"), the project owner, commenced an action against Technip Stone & Webster Process Technology Inc. ("Technip"), one of the subcontractors of Husky Oil's general contractor.

While that is not at all uncommon, Husky Oil chose to sue Technip as a third party beneficiary under the warranty provisions of the subcontract agreement (the "Subcontract"). The Subcontract contained a contractual provision requiring "all disputes" to be subject to arbitration.

Technip brought an application to stay the action on the basis of this arbitration clause. While the typical response to a stay of this nature is to simply commence an arbitration, the problem in this case is that Husky Oil was past the limitations period to commence an arbitration under the Alberta Limitations

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