Supreme Court Of Canada Sends Dispute To Arbitration Despite Defence On Merits

The Supreme Court of Canada ("SCC") recently considered whether a party had waived its right to rely on contractual arbitration and forum selection clauses by defending an Ontario action on the merits. In Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., 2012 SCC 9, the SCC unanimously affirmed an Ontario Court of Appeal ruling that a defence on the merits did not amount to a waiver of contractual arbitration and forum selection clauses. However, the Court left considerable uncertainty about what would amount to such a waiver.

Background

The dispute involved the Ottawa Rapidz, a professional baseball team, owned by subsidiary companies of Momentous.ca, who played in the Can‐Am League at a stadium owned by the City of Ottawa. Prior to entering the League, the team signed agreements that included arbitration and choice of forum clauses indicating that all disputes would be resolved by arbitration and enforced in North Carolina. Due