B.C. Supreme Court Extends Arbitration Agreement To Non-Signatories

In Northwestpharmacy.com Inc. v. Yates, the B.C. Supreme Court upheld an application by the defendants to stay legal proceedings in favour of arbitration, despite the fact that the defendants themselves were not signatories to the arbitration agreement. The decision demonstrates the generous approach taken by the courts to granting a stay in favour of arbitration, and confirms that although a litigant may not be a signatory to an arbitration agreement, that does not determine whether it is a party to the arbitration agreement.

APPLICATION

The defendants' application related to an arbitration clause contained in a services contract between two Panamanian companies: Northwestpharmacy.com (Plaintiff) and Omega Group Inc. (Omega). The arbitration clause, which had been specifically negotiated by the Plaintiff, provided for the arbitration of "all disputes arising out of or relating to the contract" (Arbitration Agreement).