How broadly should an arbitration clause be worded?

June 02, 2017


9302-7654 Québec inc. (Team Productions) c. Bieber 2017 QCCS 1100 (CanLII)

A Quebec court ruled that an action for damages based on a defamation claim fell within the scope of a very broadly worded arbitration clause, because the sources and circumstances of the impugned statements originated from the contract and made reference to its requirements. Note that this was not a consumer contract.

Drafters should ensure that the arbitration clause is worded broadly enough to capture both breaches of the contract, and any other forms of dispute (eg. torts) “relating to or touching” the agreement. Drafters should note that the enforceability of arbitration clauses in consumer contracts may vary from jurisdiction to jurisdiction.

In 9302-7654 Quebec c. Bieber (QCCS) (2017), the plaintiff event promoter entered into an agreement with Mr. Smith, the defendant’s booking agent, to secure the defendant’s presence at an event. The last page of the agreement contained signatures and included a clause which stated that “the sole and exclusive venue for any arbitration, litigation, or court proceeding shall be the county of Los Angeles”. The plaintiff made the first payment as scheduled, but did not believe that the defendant (Bieber) publicized the event as required. The plaintiff asked for a discount on the second payment and negotiations took place, however the parties were unable to resolve the standstill and Bieber unilaterally cancelled his appearance. On the day of the concert, Bieber tweeted, “Montreal due to the promoters of today’s event breaking his contract and lying I will not be able to attend today’s event. I’m sorry”. The plaintiff sued in Quebec, claiming that the message was false and defamatory, and claiming damages for lost earnings, damage to reputations and punitive damages. The defendant’s position was that the matter was subject to the arbitration clause, and that the dispute had to be referred to arbitration. The plaintiff argued that the dispute resolution clause did not apply to the claim because the defendant was not a party to the agreement, and the claim was for defamation and not breach of contract. The Court found that the defendant was a party to the contract because (1) Mr. Smith acted on behalf of the defendant (2) the purpose was to engage the artist (3) section 3 of the agreement set out that Mr. Smith would not be held liable (4) the contract refers to the artist and (5) Mr. Bieber acknowledged Mr. Smith was authorized to represent him, therefore he was bound by it. The Court also found that the dispute was within the scope of the arbitration clause. The agreement concerned “all disputes arising under, concerning, relating to or touching” the agreement. The Court noted that “It is difficult to find a description wider than that in reference to the contract.” The Court found that because the sources and circumstances of the impugned statements originated from the contract, the tweet linked the alleged defamation to the breach of contract. The tweet also explained why the defendant would not appear at the event which was the subject of the contract. The result may have been different if the allegedly defamatory language had made no reference to the contract. The Court noted that the jurisprudence required that the scope of arbitration clauses be interpreted broadly, and that this case did not involve a consumer.

To read the full case on CanLII, click here.

Dispute Resolution