Arbitration provisions not restricted to matters referred to in agreement

APPOINTMENT OF ARBITRATOR

Arbitration provisions not restricted to matters referred to in agreement

Parties were shareholders in corporation. Corporation’s principal asset was five-storey office building. Dispute arose whether payments, distributions and loans were fairly and equitably shared amongst shareholders. Single shareholder requested other four purchase his shares in corporation. Parties reached May 2009 buyout agreement regarding single shareholder’s shares. Buyout provisions included preparation of opinion of fair market value and review of corporation’s financial transactions. Single shareholder objected reports not prepared in accordance with instructions to agreed-upon firm. Single shareholder refused to tender shares. Remaining shareholders served notice of application pursuant to January 1987 shareholders agreement. Single shareholder refused to assist in appointment of arbitrator. Application for order that dispute proceed to arbitration, and appointing single arbitrator. Application granted. Arbitration provisions of shareholders agreement not restricted to matters referred to in agreement. Applicants’ conduct to single shareholder not so oppressive as to destroy the underpinnings of the arbitration provisions. Dispute arguably one covered by arbitration clause. Dispute directed to proceed to single arbitrator. As to determination of arbitrator’s jurisdiction, court deferred to arbitrator. November 2010 notice of application constituted dispute to be arbitrated. Specific arbitrator appointed.
Aubrey Falls Investments Ltd. v. Kozak (Oct. 5, 2012, Ont. S.C.J., E.J. Koke J., File No. 421/11) 225 A.C.W.S. (3d) 700.