When Your Arbitration Clause Catches More Than You Bargained For: What Arsopi v ARVOS Means For Construction Contracts

Your arbitration clause may be broader than you anticipated. In Arsopi v ARVOS GmbH (“Arsopi“),¹ the Alberta Court of Appeal (the “Court”) confirmed that a clause covering “all disputes arising out of or in connection with” a contract can capture statutory indemnity claims under the Tort-Feasors Act, even if those claims were never contemplated at the time of contracting.

For construction companies and in-house counsel, Arsopi serves as a reminder to carefully consider dispute resolution clauses and their broader implications for project disputes, knowing parties will be held to the bargains they negotiate.

Background

The respondent, ARVOS GmbH (“ARVOS”), had contracted with another party, Orica Australia Pty Ltd. (“Orica”) for the design of certain equipment that was eventually installed in a plant in Alberta.² ARVOS had entered into a subcontract with the appellant, Arsopi, to manufacture the equipment.³ The subcontract between ARVOS and Arsopi included, by reference, an