Case information

Bankruptcy and Insolvency — Receivership — Commercial law — Contracts — Arbitration agreements — Receiver and trustee-in-bankruptcy of debtor companies claims contracting parties owe amounts to debtor companies — Receiver commences action — Agreements in issue contain mandatory arbitration clauses — Contracting parties seek stay of proceedings and arbitration — Whether receiver bound by arbitration clauses — Whether doctrine of separability allows receivers to disclaim arbitration clauses within agreements while pursuing rights under same agreements — Arbitration Act, RSBC 1996, c. 55, s. 15.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The parties entered into a partnership agreement and a guarantee and cross-indemnity agreement. The partnership, Peace River Hydro Partners, commenced work. It subcontracted some work to Petrowest Corporation and its affiliates pursuant to purchase orders and it entered into a subcontract agreement with Petrowest Civil Services LP. Petrowest Corporation and its affiliates became insolvent. Ernst and Young Inc. was appointed as their receiver. Ernst & Young Inc. assigned Petrowest Corporations’s affiliates into bankruptcy and thereafter acted as both a trustee in bankruptcy and a receiver. Petrowest Corporation and its affiliates commenced a civil claim alleging amounts are owed to them under the general partnership agreement, the guarantee and cross-indemnity agreement, the purchase orders, and the subcontract agreement. These agreements contain arbitration clauses. The appellants applied under s. 15 of the Arbitration Act, RSBC 1996, c. 55, to stay the proceedings so that the matters could be referred to arbitration. The Supreme Court of British Columbia dismissed the application. The Court of Appeal dismissed an appeal.