Peace River v Petrowest: SCC Avoids Conflict Between Arbitration And Bankruptcy Law, And Clarifies Separability?

Peace River Hydro Partners v Petrowest, 2022 SCC 41, concerned the tension between the Court's supervisory power over all proceedings brought by a receiver/trustee under the Bankruptcy and Insolvency Act, RSC 1985, c. B-3 (BIA) and party autonomy to contract out of the courts. Petrowest's Receiver/Trustee sued Peace River in British Columbia for amounts it alleged were owing to Petrowest under their contracts. Peace River applied to stay the action on the basis that the contracts contained arbitration clauses, which required that disputes be resolved by arbitration. The Receiver/Trustee opposed the stay application on the ground that the BIA authorized the Court to assert centralized judicial control over the matters under the "single proceeding model" rather than sending the Receiver/Trustee to multiple arbitral forums. The B.C. Supreme Court and the B.C. Court of Appeal dismissed the stay application and allowed the action to proceed – for different reasons. A