Forum Selection Clauses Apply To Non-Signatories In Limited Circumstances

The Court of Appeal for Ontario recently affirmed a decision of the Ontario Superior Court of Justice (Commercial List) dismissing an application for a stay of proceedings on the basis of a forum selection clause in favour of New York.

In Aldo Group Inc v Moneris Solutions Corporation¹, the court considered when this type of clause binds a non-signatory. Forum selection clauses are common contractual mechanisms that establish the proper forum and method for dispute resolution. The Court of Appeal took the opportunity in Aldo Group to speak to the policy and business objectives of forum selection clauses. Specifically, it described the global economy as requiring business to be conducted across different judicial systems, and noted that business people must properly assess which judicial system they wish to attorn to—if any.