



COURT OF APPEAL FOR ONTARIO

CITATION: Ciano Trading & Services C.T. v. Skylink
    Aviation Inc., 2015 ONCA 89

DATE: 20150209

DOCKET: C58685 and C58686

MacFarland, Hourigan and Benotto JJ.A.

BETWEEN

Ciano
    Trading & Services C.T. & S.R.L.

Applicant (Appellant)

and

Skylink
    Aviation Inc.

Respondent (Respondent
    in Appeal)

Application Under Rule 14.05(2) and (3)(d), (g) and (h) of the
Rules
    of Civil Procedure

AND BETWEEN

Ciano Trading
    & Services C.T. & S.R.L.

Plaintiff (Appellant)

and

Skylink
    Aviation Inc., David Miller, Dewy (a.k.a. Kris)

Bebbington,
    Eitan Dehtiar, Robert Waring, Dayle Waring,

Tracy
    Munday, Harry Green, Andrew Hamlin, Philip Hamson,

Rael
    Nurick and Jan Ottens

Defendants (Respondents
    in Appeal)

Melvyn L. Solmon and Raffaele Sparano, for the appellant
    Ciano Trading & Services C.T. & S.R.L.

Francy Kussner and Brad Halfin, for the respondent

Heard and released orally:  January 26, 2015

On appeal from the order of Justice David M. Brown of the
    Superior Court of Justice, dated March 17, 2014.

ENDORSEMENT

[1]

This is an appeal of the order of the motion judge granting a stay of
    proceedings pending arbitration.

[2]

The parties entered into a Services Agreement that contained an
    arbitration clause and a survival clause, which provided a list of provisions that
    would survive termination of the agreement.  The survival clause did not
    include a reference to the arbitration clause.

[3]

The respondent terminated the Services Agreement. The appellant
    commenced an action against the respondent for numerous breaches of the Service
    Agreement as well as several torts. In addition, the appellant brought an
    application for declaration that the arbitration clause did not apply. The
    respondent brought a motion to stay the proceedings pending arbitration.

[4]

The motion judge granted the respondents motion and dismissed the
    appellants application. He found that it was unclear whether the arbitration clause
    survived the termination of the Services Agreement and, pursuant to the
    competence-competence principle, referred the matter to an arbitrator to
    determine whether the arbitrator had jurisdiction.

[5]

The appellant submits that the motion judge erred in his interpretation
    of the Services Agreement and that he should have found that the arbitration
    clause did not survive the termination of the agreement. We disagree.

[6]

Under the
International Commercial Arbritrator Act
, R.S.O.
    1990, c.I.9 and the UNCITRAL  Model Law on International Commercial Arbitration,
    the motion judge was obliged to defer the issue of applicability of the
    arbitration clause to the arbitrator unless the agreement is null and void,
    inoperative or incapable of being performed.

[7]

The court has the discretion to determine a challenge to an arbitrators
    jurisdiction on a pure question of law or a question of mixed fact and law that
    requires for its disposition only superficial consideration of the documentary
    evidence. However, the case law recognizes that where it is unclear if the
    arbitrator has jurisdiction, it is preferable to leave the issue to the
    arbitrator pursuant to the competence-competence principle.

[8]

In the present case, the motion judge held that the positions advanced
    by both parties as to whether the arbitration clause survived termination were
    arguable. We see no error in his analysis and his decision, in light of that
    finding, to refer the issue of jurisdiction to the arbitrator.

[9]

In these circumstances, the motion judge was under no obligation to make
    a determinative finding regarding the operability of the arbitration clause.

[10]

We
    also see no error in the motion judges articulation of the exceptions to the
    competence-competence principle.

[11]

Finally,
    we are not persuaded that the stay ordered was contrary to the principles
    articulated in the Supreme Court of Canadas decision in
Hyrniak v. Maudlin
,
    2014 SCC 7.

[12]

The
    appeal is dismissed, the matter is referred to arbitration.

[13]

The
    respondent is entitled to its costs, which we fix at $20,000, inclusive of
    disbursements and HST.

J. MacFarland J.A.

C.W. Hourigan J.A.

M.L. Benotto J.A.


