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Heller v. Uber Technologies Inc.: Can Hard Cases Make Good Law?d1

50 Advoc. Q. 351
The Advocates’ Quarterly
April 2020
Article
Tamar Meshel a1
Copyright © 2020 by Thomson Reuters Canada Limited; Tamar Meshel

I. Introduction

International arbitration is one of the most popular dispute resolution mechanisms for commercial disputes involving parties from different states. It is also one of the most complex. International commercial arbitration frequently implicates multiple domestic legal systems1 and the question of where the jurisdiction of a domestic court ends and that of the arbitrator begins remains controversial. Nonetheless, it seems evident that the well-oiled machinery that is international commercial arbitration is here to stay.2 It is therefore up to those entrusted with its smooth operation, including domestic courts, to ensure that they appreciate its complexities so that international commercial arbitration may continue to serve its users effectively.

The main international commercial arbitration instruments guiding domestic courts are the 1985 UNCITRAL Model Law on International Commercial Arbitration3 and the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards.4 Both *352 have been incorporated in provincial international commercial arbitration legislation in Canada5 and have also guided the courts’ interpretation of domestic arbitration legislation.6 The fundamental principles that these instruments reflect include the “competence-competence” principle, which permits arbitrators to hear any challenge to their jurisdiction,7 the limited review of arbitration agreements by courts at a pre-arbitration stage, and the “separability” principle - which provides for the severability of the arbitration clause from the main contract.8 In order for international commercial arbitration to operate efficiently and effectively, these principles must be jealously safeguarded. At the same time, the Model Law and New York Convention are silent on most practical aspects of international commercial arbitration,9 leaving them to be determined by domestic courts and legislators.

*353 In light of the ubiquity of international commercial arbitration worldwide, most domestic jurisdictions strive to create consistency and uniformity in the interpretation and application of its fundamental principles. But what happens when such principles seemingly collide with a domestic statute, with national public policy, or with other judicial or legislative objectives in a particular case? On the one hand, should well-established general principles be undermined, potentially causing wide-ranging and unintended ripple effects, in favour of an intuitively desirable outcome in a specific factual situation? Such a result would amount to the proverbial “hard cases make bad law”.10 On the other hand, should an outcome that is unjust or that offends acceptable standards be tolerated in order to preserve general principles that may be inapplicable or inappropriate in that specific situation? Such a result would permit “bad law [to] make hard cases”.11

This question is currently before the Supreme Court of Canada (“SCC”) in the appeal12 from the Court of Appeal for Ontario’s (“ONCA”) judgment in Heller v. Uber Technologies Inc.13 The ONCA overturned a judgment of Ontario’s Superior Court of Justice (“ONSC”) that had stayed the judicial proceedings in favour of arbitration.14 Departing from the two extreme positions described above, this article argues that the difficult circumstances of this case do not necessarily undermine the fundamental principles of international commercial arbitration. Rather, these principles can be interpreted so as to avoid an unjust outcome on the particular facts of this case. Indeed, “hard cases [can] make good law”.15

A brief summary of the facts of the case and the ONSC’s decision will set the stage for further analysis. The plaintiff (“Heller”), a *354 resident of Ontario, entered into service agreements with the defendant (“Uber”),16 pursuant to which he delivered food from restaurants to consumers using the Uber phone applications. Heller brought a proposed class action on behalf of Uber drivers, alleging that they were employees of Uber and thus entitled to the benefits of Ontario’s Employment Standards Act, 2000 (“ESA”). Heller sought a declaration that Uber violated the ESA, and, if the action was certified as a class action, $400 million in damages for the class.

The agreements signed by Heller, which were governed by the laws of the Netherlands, contained a multi-tiered dispute resolution clause that provided, first, for mediation under the International Chamber of Commerce (“ICC”) Mediation Rules, and, if not settled within 60 days, for arbitration by a sole arbitrator in the Netherlands in accordance with the ICC Arbitration Rules.17 Pursuant to this clause, Uber submitted a pre-certification motion to stay Heller’s proposed class action in favour of arbitration. Heller, in response, argued that “it would be an absurd result and contrary to public policy to enforce an arbitration agreement in an employment contract” since this would “deny vulnerable non-unionized *355 employees their rights and protections under the [ESA], which precludes employees contracting out if [sic] their rights under the Act”.18

The ONSC first noted that regardless of whether the Ontario International Commercial Arbitration Act, 2017 (“ICCA”)19 or Arbitration Act, 1991 (“AA”)20 applied, “ultimately not much turns on this point, because under either Act, subject to certain exceptions, when there is an arbitration agreement, then upon the request of one of the parties, the court must refer the matter to arbitration”.21 Nonetheless, the court found that the ICAA was applicable,22 since the arbitration agreement was both “international”, the parties having their places of business in different countries,23 and “commercial”. Despite Heller’s contention that his relationship with Uber was one of employer-employee, the ONSC found that the “Agreements expressly state that it does [sic] not create an employment relationship”, and thus there was “little difficulty concluding that the [agreements] are commercial in nature”.24 While the court agreed with Heller that “there may be such a[n] [employment] relationship notwithstanding the express language to the contrary in the [agreements]”,25 it noted that “it does not follow that all employment relationships are not commercial agreements nor that employment agreements are *356 inimical to arbitration”.26 In fact, the language of the ESA, the court noted did not preclude resort to arbitration.27

The court concluded in this regard that

... in accordance with the Competence-Competence Principle ... it is for the arbitrator in the Netherlands to determine whether he or she has jurisdiction to decide whether the agreements in the case at bar are employment contracts and whether the dispute between Mr. Heller and Uber is arbitrable under the [International Commercial Arbitration] Act ... until the arbitrator rules otherwise, the court should take the parties at their word that the [agreements] are not employment contracts and let Mr. Heller challenge the arbitrator’s jurisdiction in the first instance at the outset of the arbitration.28

To find otherwise, according to the ONSC, would be to assume that Mr. Heller is an employee, “which is to beg the whole point of his proposed class action”.29 Since “Heller’s status as an employee is a complex issue of mixed fact and law that remains to be determined ... absent legislative language to the contrary, courts must enforce arbitration agreements”.30 Therefore, unless one of the exceptions to the requirement to stay court proceedings in favour of arbitration under the Ontario arbitration legislation applies, “the challenge to the arbitrator’s jurisdiction should be first resolved by the arbitrator in the Netherlands”.31

Heller’s main argument against a stay of proceedings was that the arbitration agreement is unconscionable and thus invalid. The ONSC set out the following three requirements for a claim of unconscionability: “(1) pronounced inequality of bargaining power; (2) a substantially improvident or unfair bargain; and (3) the defendant knowingly taking advantage of the vulnerable plaintiff.”32 The court noted that “[i]t is not sufficient to simply show that one party extracted a better deal than the other”,33 and that “the elements of the claim are fact-based and will depend upon the personal circumstances and situations of the parties and the nature and terms of their contract”.34 Applying these principles to the facts before it, the ONSC found that the first element, an *357 inequality of bargaining power, was undoubtedly present. However, it rejected the propositions that “Uber preyed or took advantage of Mr. Heller or the other drivers or extracted an improvident agreement by inserting an arbitration provision”,35 or that the agreement to arbitrate significant claims in the Netherlands made it an “improvident agreement”.36 The court concluded that there was no “situation of unconscionability in the circumstances of the immediate case”.37 Heller appealed to the ONCA, which overturned the ONSC’s decision. The ONCA found that the arbitration clause was invalid since it amounted to an illegal contracting out of the ESA and was unconscionable.

The difficult facts of this case have led to a manifestly flawed decision of the ONCA, as well as to two diametrically opposed positions placed by the parties before the SCC. Uber submits that the competence-competence principle requires the court to refer all questions of mixed fact and law, including those concerning the allegedly unlawful contracting out of the ESA and unconscionability as grounds of invalidity, to the arbitrator.38 Heller, in contrast, submits that the ONCA was acting within its authority under the competence-competence principle in finding, as a matter of law, that the arbitration clause was invalid since it violated the ESA and since it was unconscionable.39

Approaching the resolution of the dispute from these extreme positions, it seems that the SCC is faced with two, equally extreme, possible outcomes. On the one hand, the court can overturn the ONCA and find that the applicability and effects of the ESA, as well as the allegedly unconscionable nature of the arbitration agreement, are questions of mixed fact and law that must be referred to the arbitrator under the competence-competence principle. Such a decision would protect the parties’ freedom of contract, the efficacy of arbitral proceedings, and the legislative intent behind the ICCA and the AA to promote arbitration. Ultimately, the argument goes, parties who freely committed to arbitrate their dispute should not be allowed to circumvent this commitment by attempting to have the courts decide it instead of the arbitrator. Accordingly, unless Heller can show, on a prima facie basis, that the arbitration agreement is manifestly invalid, he should not be allowed to renege on his contractual obligations. But such a decision might also bring about *358 unintended consequences in the form of a potential violation of a domestic statute that prohibits arbitration, as well as costly arbitral proceedings pursuant to an arbitration clause that may turn out to be invalid.

On the other hand, the SCC can uphold the ONCA’s jurisdiction to determine the applicability and effects of the ESA, as well as the unconscionability of the arbitration agreement, and refuse to refer the case to arbitration unless it finds that the ONCA erred in answering these questions. Such a decision would protect the principle of consent to arbitration, as well as the public interest in ensuring that Canadians have access to legislation that safeguards their rights. Ultimately, the argument goes, parties must validly consent to submit their dispute to arbitration, and they cannot do so in the context of legislation that excludes arbitration or by way of an unconscionable arbitration clause. Accordingly, if Heller is indeed an employee of Uber and the ESA indeed prohibits arbitration, and/or the arbitration agreement is unconscionable, he cannot be held to have validly consented to it. But such a decision might also bring about unintended consequences in the form of uncertainty in the enforcement of international arbitration agreements in Canada, potential violations of Canada’s international obligations under the New York Convention, harm to its reputation as a pro-arbitration jurisdiction, and negative impacts on the ability of Canadian companies to participate in international trade and commerce.

But the SCC need not end up with either of these extreme outcomes since the fundamental principles of international commercial arbitration in fact allow the court to pave a middle course. As this article will argue, the key to doing so lies in the requirement of commerciality. Section II of this article will critically examine the ONCA’s decision, focusing on two flawed aspects of its reasoning: first, the court’s interpretation of the competence-competence principle, and second, its analysis of the unconscionability doctrine as grounds for invalidating the parties’ arbitration agreement. With regard to unconscionability, the article concludes that this is a clear question of “mixed fact and law” that goes beyond “a superficial examination of the documentary proof in the record”.40 Therefore, in accordance with the SCC’s jurisprudence, this question should be referred to the arbitrator. The remainder of the article will focus on the other ground of invalidity argued by Heller, namely the unlawful contracting out of *359 the ESA. This argument implicates the competence-competence principle since Heller’s status as an employee, which would determine the applicability of the ESA, is also a mixed question of fact and law that the court should arguably refer to the arbitrator.

Section III of the article proposes a solution to this apparent “catch 22”. It argues that the courts should undertake a full analysis of whether or not the arbitration agreement in this case arises from a “commercial relationship” within the meaning of the New York Convention and the Model Law. This would determine the applicable domestic statute, i.e. the ICCA or the AA. This analysis would also require the courts to decide, for the narrow purpose of this “commerciality” requirement, first - whether the parties’ relationship is one of employment, and second - whether employment relationships are or are not “commercial”. Such an analysis was not undertaken by either the ONS Cor the ONCA, both of which found this determination to be of little significance.41

However, this was an important analysis for the courts to undertake for two reasons. First, the grounds for refusing a stay of proceedings in favour of arbitration are much narrower under the ICCA than the AA. The Ontario courts have indeed recognized that “the [ICCA] does not contain a list of circumstances under which the court may refuse to stay a court proceeding as extensive as that found in section 7(2) of the Arbitration Act, 1991 ”.42 Second, and more importantly for present purposes, determining whether or not the parties’ relationship is “commercial” would take out of the equation the controversial question of who should decide Heller’s status as an employee - the courts or the arbitrator. Having already decided this question for the purpose of the preliminary “commercial” requirement, the interpretation of the ESA as excluding arbitration would then be a “question of law” that, in line with the SCC’s jurisprudence, the courts have jurisdiction to determine.43 *360 Since the courts clearly have the authority to decide whether or not the parties’ relationship is “commercial” in the context of the preliminary question of which statute applies, making this determination does not violate the competence-competence principle.

II. The ONCA’s Decision

As a preliminary matter, the ONCA noted that it had “serious reservations about the motion judge’s conclusion that the relationship between the parties here is a commercial one”, and therefore doubted the applicability of the ICAA to the arbitration agreement.44 However, the ONCA agreed with the court below that “nothing much turns on whether the ICAA or the Arbitration Act, 1991 applies to the Arbitration Clause in issue”.45 Mentioning only that the AA was “the more commonly referred to statute on these matters”, the ONCA proceeded to apply it to the remainder of its decision, adding that it “would reach the same conclusions” applying the ICAA.46

As will be discussed further in the next section, much in fact turns on the determination of the “commercial” nature of the parties’ relationship, since making this determination would have allowed the ONCA to make a factual finding concerning Heller’s status as an employee of Uber. The remainder of the present section will address two problematic aspects of the ONCA’s reasoning: first, the court’s interpretation of the competence-competence principle, and second, its analysis of the unconscionability doctrine as grounds for invalidating the parties’ arbitration agreement.

A. The Competence-Competence Principle

The competence-competence principle is intended to ensure that grounds of invalidity, which the courts have the power to examine under Article 7(2) of the AA and Article II(3) of the Convention,47 are interpreted narrowly. Holding the ONCA to its assurance that it “would reach the same conclusions” under the ICAA as under the *361 AA, this principle should be applied in the same way to this case. According to the competence-competence principle, once the court has conducted a “superficial” or “prima facie” scrutiny of the validity of the arbitration agreement, which should be found invalid only in “manifest cases”, the dispute should be submitted to arbitration.48 Indeed, the ONCA itself recognized “the general approach that any dispute over an arbitrator’s jurisdiction should first be determined by the arbitrator”.49 The court found, however, that since the question before it was one of validity of the arbitration agreement, “the competence-competence principle has no application to this case and, consequently, [it did] not need to address the arguments made with respect to it”.50 Not so.

The test for interpreting and applying the competence-competence principle was set out by the SCC in Dell as follows:

... in any case involving an arbitration clause, a challenge to the arbitrator’s jurisdiction must be resolved first by the arbitrator. A court should depart from the rule of systematic referral to arbitration only if the challenge to the arbitrator’s jurisdiction is based solely on a question of law ... [w]here questions of mixed law and fact are concerned, the court hearing the referral application must refer the case to arbitration unless the questions of fact require only superficial consideration of the documentary evidence in the record.51

The ONCA concluded that the arbitration agreement in this case was invalid since it violated Heller’s rights under the ESA, even though it did not actually determine “[i]f he is an employee”.52 Rather than referring this mixed question of fact and law to the arbitrator, the ONCA relied on the SCC’s decision in Seidel,53 finding simply that this was “a preliminary motion in a proceeding and ... the court normally proceeds on the basis that the plaintiff’s allegations are true or, at least, capable of being proven”.54 Of course, as noted by the ONSC, “Mr. Heller’s status as an employee is *362 a complex issue of mixed fact and law that remains to be determined, while Ms. Seidel’s status as a consumer ... was not an issue in her case”.55 Operating on the presumption that Heller “can prove that which he pleads, that is, that he is an employee of Uber”,56 the ONCA effectively decided what the ONSC rightly refused to decide--a question of mixed fact and law that entailed more than “a superficial examination of the documentary proof”57 and should therefore have been referred to the arbitrator in accordance with the competence-competence principle.58

By disregarding the competence-competence principle and assuming that Heller was an employee of Uber, the ONCA circumvented the limits of its own jurisdiction. This, in turn, allowed it to find that the arbitration clause was invalid for violating the ESA59 simply on the basis of “the presumption that drivers are employees of Uber, as pleaded”.60 The rationale for doing so was that “the characterization of ... persons as independent contractors or employees for the purposes of Ontario law is an issue that ought to be determined by a court in Ontario”.61 As will be discussed in the next section, if this characterization is to be made by the courts, it should be in the context of determining whether the parties’ relationship is “commercial” within the meaning of the Convention and theICCA. In the context of a validity analysis, whether under the ICCA or the AA, such mixed questions of fact and law belong with the arbitrator.

B. Unconscionability

Courts can find arbitration agreements to be invalid for being unconscionable under the “null and void” or “invalidity” exceptions to the mandatory stay of proceedings provisions in the ICCA and the AA, respectively.62 However, in accordance with the SCC’s test under the competence-competence principle, the courts can make this determination only if it does not go beyond “a superficial examination of the documentary evidence”.63 Where it does, “an arbitrator has exclusive jurisdiction to undertake such an inquiry”.64

*363 The ONCA in this case engaged in precisely this type of mixed fact and law analysis, finding that the arbitration agreement was unconscionable.65 The ONCA set out the test for unconscionability as follows:66

1. a grossly unfair and improvident transaction;

2. a victim’s lack of independent legal advice or other suitable advice;

3. an overwhelming imbalance in bargaining power caused by the victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

4. the other party’s knowingly taking advantage of this vulnerability.67

According to the ONCA, the arbitration agreement in this case fails all four requirements and “is unconscionable when it is viewed properly and in the context in which it is intended to apply”.68 With respect to the “imbalance in bargaining power” requirement, Uber acknowledged,69 as did the ONSC, that it was satisfied in this case. The ONCA’s approach to the remaining three requirements will be discussed next.

The ONCA found that the requirement of “a grossly unfair and improvident transaction” was satisfied based on three observations:

1. the arbitration agreement “requires an individual with a small claim to incur the significant costs of arbitrating that claim under the provisions of the ICC Rules, the fees for which are out of all proportion to the amount that may be involved. And the individual has to incur those costs upfront”;70

*364 2. “any driver with a claim, that might ordinarily amount to nothing more than a few hundred dollars, must undertake an arbitration in the Netherlands in order to have their rights determined independently. That arbitration must be held in Amsterdam, under the law of the Netherlands, and must be conducted in accordance with the ICC Rules”;71 and

3. “the cost of initiating the arbitration process alone is US$14,500. This does not include the costs of travel, accommodation and, most importantly, counsel to participate in the arbitration”.72

These statements contain several fundamental inaccuracies. First, according to the parties’ arbitration clause, any dispute arising under the agreements must first be submitted to mediation, and not arbitration. Therefore, it is unlikely that “an individual with a small claim” of “a few hundred dollars” would in fact end up in arbitration. Moreover, it is not necessarily the case that the parties will incur “significant costs which are out of all proportion to the amount that may be involved” in arbitrating their dispute under the ICC Rules. In fact, ICC costs, including the fees and expenses of the arbitrators and the ICC administrative expenses, are a direct function of the amount in dispute and the number of arbitrators. They are determined by the ICC International Court of Arbitration73 in accordance with fee scales appended to its Arbitration Rules.74 In this case, the parties’ arbitration agreement provides for a sole arbitrator rather than a panel of three, thereby significantly reducing the cost of the proceedings.

Second, while the arbitration agreement indeed provides that “the place of arbitration shall be Amsterdam”,75 the term “place of arbitration” refers to the legal concept of the “seat” of the arbitration, rather than the physical place in which the hearings take place. The “seat” of an arbitration, also known as the “forum” *365 or “locus arbitri”, is the place in which that arbitration is legally situated, as chosen by the parties.76 The arbitration laws of this jurisdiction govern certain aspects of the arbitral procedure and the enforcement of the award, but the parties are not required to hold all, or any, of their meetings or hearings in this jurisdiction.77 In fact, in this case it seems that Uber offered to arbitrate with Heller in Ontario.78 This would have eliminated any costs associated with travel and accommodations.

Finally, the amount determined by the ONCA to be the “cost of initiating the arbitration process alone”, namely US$14,500, is mere conjecture. In computing this amount, the ONCA included the costs of initiating both a mediation and an arbitration process,79 even though there is no basis for assuming that a dispute would not be resolved by mediation and would have to proceed to arbitration.80 Moreover, with regard to both the mediation and arbitration processes, the court considered it unfair that a driver would have to pay such costs “up-front”.81 However, both the ICC Mediation and Arbitration Rules provide that “all deposits requested and costs fixed shall be borne in equal shares by the parties, unless they agree otherwise in writing”,82 meaning that both a driver filing a mediation or arbitration request and Uber will have to pay the ICC’s administrative fees, as well as the fees of the mediator or arbitrator.83 Moreover, the initial filing fee that a driver *366 submitting an arbitration or mediation claim would have to pay is then credited towards his or her share of these fees.84 Ultimately, the arbitral tribunal has the authority to make decisions on costs other than those fixed by the ICC Court, including which of the parties shall bear them and in what proportion.85

Although these technical details regarding the ICC mediation and arbitration processes may seem inconsequential, they are actually of great importance since the ONCA seems to have relied on them in finding that Heller was facing “significant financial or geographic barriers to initiate the arbitration process”,86 and thus that the arbitration agreement in this case was “grossly unfair and improvident”. It is worth noting that the SCC has recently held with respect to “access to justice” arguments as grounds for invalidity of arbitration agreements that “this objective cannot, absent express direction from the legislature, be permitted to overwhelm the other important objectives pursued by the Arbitration Act, including ensuring that parties to a valid arbitration agreement abide by their agreement”.87 At a minimum, such arguments should be approached with caution and decided on a full and accurate factual basis.

With regard to the requirement under the unconscionability test that the “victim lack independent legal advice or other suitable advice”, the ONCA found that Heller “has no reasonable prospect of being able to negotiate any of the terms of the services agreement”.88 The court went on to find that “the drivers are individuals who are at the mercy of the terms, conditions and rates of service set by Uber, just as are consumers. If they wish to avail themselves of Uber’s services, they have only one choice and that is to click ‘I agree’ with the terms of the contractual relationship that are presented to them”.89

These statements of the ONCA seem to suggest that the arbitration agreement should be found invalid due to the mere fact that it was contained in a contract of adhesion. Such a finding, however, flies in the face of the SCC’s consistent holding to the contrary. Indeed, the SCC has repeatedly found that contracts of adhesion “are not per se invalid on the ground that they are contrary *367 to public policy”,90 and that the mere presence of such a contract would not render an arbitration agreement invalid on unconscionability grounds.91 The SCC has similarly held that “the courts will generally give effect to the terms of a commercial contract freely entered into, even a contract of adhesion, including an arbitration clause”.92 This is because “nothing in the Arbitration Act suggests that standard form arbitration agreements, which are characterized by an absence of meaningful negotiation, are per se unenforceable”.93

With respect to the last requirement of the unconscionability test set out by the ONCA, that Uber knowingly took advantage of Heller’s vulnerability, the court concluded simply that

[g]iven the answers to the first three elements, I believe that it can be safely concluded that Uber chose this Arbitration Clause in order to favour itself and thus take advantage of its drivers, who are clearly vulnerable to the market strength of Uber. It is a reasonable inference that Uber did so knowingly and intentionally.94

The ONCA then added another argument in support of its conclusion that the arbitration agreement was unconscionable. It noted that, “[i]f the class proceeding is certified, then the central issues will be determined, not just for the appellant, but for all persons who find themselves in the same position as the appellant. It is well recognized that this is one of the central benefits of, and reasons for, the Class Proceedings Act”.95 The court further found that “any decision in [a class] proceeding would be binding on the members of the class ... It is clear that there is no ability for a class determination under the Arbitration Clause nor is any determination through the arbitration a matter of public record upon which others can rely”.96

*368 However, even if the class action “is clearly of public interest ... [it] is a procedure, and its purpose is not to create a new right”.97 Therefore, a plaintiff who raises this as a ground of nullity “must prove that, given the particular facts of his case, the arbitration agreement should be considered [unconscionable]”.98 In some class proceedings, moreover, arbitration may even facilitate the plaintiff’s access to justice.99 Indeed, subsequent to the SCC’s decision in Seidel, in which the court referred some of the claims to class proceedings, it took five years for those claims to be certified.100

In order to exercise jurisdiction over Heller’s action in this case and refer it to class proceedings, the ONCA had to find that the arbitration agreement was invalid, not the other way around. What the ONCA effectively found, however, was that Heller’s “mere procedural decision ... seeking to certify a class proceeding” was sufficient to invalidate the arbitration agreement.101 Moreover, for a court to

... determine whether a class action would be a “preferable procedure” ... would [not only] require a degree of judicial scrutiny inconsistent with the competence-competence principle and with the superficial consideration on the basis of which a court can decide whether to grant a stay of proceedings, but the arbitration agreement would as a result be subject to the whim of the party wanting to avoid its application.102

In sum, the mere presence of a contract of adhesion or a purported class action does not suffice for a finding of an unconscionable arbitration clause, which must be determined on the facts on a case-by-case basis.103 Such a determination, where there is nothing on a superficial review of the evidence to suggest unconscionability, should be referred to the arbitrator.

III. A Middle Ground for the SCC

As argued in the previous section, the ONCA erred in its interpretation and application of the competence-competence *369 principle, as well as the unconscionability ground for finding an arbitration agreement invalid. Its reasoning directly contradicts the SCC’s longstanding jurisprudence on these issues, as well as widely accepted arbitration principles. While the ONCA may have been guided by legitimate concerns relating to public policy and the protection of Canadian employees, it has turned the hard facts of this case into bad law. The SCC, however, need not go down this path. It can achieve the objectives that seem to have guided the ONCA while preserving its pro-arbitration reputation by simply returning to basic principles.

It must be recalled that international commercial arbitration does not purport to completely oust the authority of domestic legislators and courts, and is in fact dependant on them to a great extent. Therefore, as noted in the introduction to this article, domestic jurisdictions maintain considerable influence over various aspects of international commercial arbitration. For instance, the New York Convention allows a state to make reservations as to “reciprocity” and “commerciality”,104 which limit the application of the Convention in that jurisdiction. Indeed, Canada has made the latter reservation, according to which “it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the laws of Canada, except in the case of the Province of Quebec where the law does not provide for such limitation”.105

This reservation means that only those arbitration agreements and awards that arise out of a “commercial relationship” under the laws of Canada will fall within the purview of the New York Convention.106 The Model Law similarly applies only to “international commercial arbitration”.107 Since the ICCA adopts both instruments, it also only applies to “arbitration agreements in respect of differences arising out of commercial legal relationships”.108 The authority to decide whether a particular relationship is “commercial” for this purpose, i.e., for the purpose of the application of the ICCA, clearly rests with the Canadian courts, which should interpret this requirement broadly.109 The Model Law provides in this regard that:

*370 The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.110

Whether or not the present case involves a “commercial relationship” is disputed by the parties, with Uber arguing that it does and Heller arguing that it does not since he is an employee of Uber.111 As noted by the ONSC, “[w]hether a worker is an employee, independent contractor, or a dependent contractor is a fact-based determination that depends upon on a variety of factors and not just the written or oral agreement between the parties”.112 Since this is clearly a mixed question of fact and law, when it arises in the context of a validity analysis it should be referred to the arbitrator. However, to the extent that this question arises in the context of the preliminary determination of whether the parties’ relationship is “commercial” and which arbitration statute applies, it is well within the purview of the courts.

Accordingly, what the ONSC and the ONCA should have done in this case is to determine whether or not the parties’ relationship is “commercial” within the meaning of the New York Convention and the Model Law. To do so, they would be entitled to engage in a full analysis of the facts and the applicable laws of Canada. This analysis could have led to one of three possible findings: (1) that Heller is not an employee and therefore the relationship is commercial; (2) that Heller is an employee and therefore the relationship is not commercial; or (3) that Heller is an employee but the relationship is nonetheless commercial. Whatever the courts would have concluded with respect to the “commercial” nature of the *371 relationship would in turn determine which statute is applicable to Uber’s stay application, the ICCA or the AA.

This determination would have no impact on the validity of the arbitration agreement as such. It would, however, have the incidental effect of resolving the contentious question of whether or not Heller is an employee of Uber without implicating the competence-competence priniciple. Had the courts found, at the preliminary stage of determining the “commercial” nature of the parties’ relationship, that Heller was not an employee, then the ESA could not later be applied as a ground for the invalidity of the arbitration agreement, and the case would be referred to arbitration.113 In contrast, had the courts found at that preliminary stage that Heller was an employee, the ESA would apply to him. At the validity analysis stage, the courts could then examine whether or not this statute indeed prohibits arbitration since this is a question of law. As the majority of the SCC noted in Dell, “[w]hether or not [the applicable statutory provision] has the legal effect claimed for it by Ms. Seidel was a question of law to be determined on undisputed facts. Accordingly, it was properly entertained by the Supreme Court of British Columbia in the first instance. The competence-competence principle was not violated”.114 Had the courts below determined the preliminary question of commerciality, therefore, the interpretation of the ESA - a question of law - could have been determined on the basis of “undisputed facts” as to Heller’s status as an employee. Nowhere in this process would the competence-competence principle be violated.

In sum, this approach departs from the extreme positions advocated by the parties in this case and paves a middle road by returning to the basic principles of international commercial arbitration. Undertaking a full analysis of the relevant facts and applicable laws in order to determine whether an arbitration agreement arises from a “commercial relationship” falls squarely within the authority of a Canadian court presented with a stay application. This analysis is typically undertaken in order to determine which provincial statute applies - that governing international arbitration agreements or that governing domestic. Yet on the particular facts of the present case, this determination *372 would also serve to resolve the preliminary and contentious question of whether the parties’ relationship is one of employment. Deciding this issue would turn it into an “undisputed fact”, which the court could then rely on in the legal interpretation of the ESA in order to determine whether it indeed invalidates the arbitration agreement.

Unlike the ONCA’s decision, undertaking an analysis of Heller’s employment status as part of the “commercial relationship” determination would not jeopardize certainty for parties to international commercial arbitration agreements, since the courts have always been authorized to make this determination. It would also protect the principles of party autonomy and party consent, and uphold the policy underlying arbitration legislation that “parties to a valid arbitration agreement should abide by their agreement”.115 On the particular facts of the present case, this approach would also allow the courts to protect public policy interests by determining a mixed question of fact and law without violating the competence-competence principle.

IV. Conclusion

In a sense, the ONCA decision in this case illustrates how international arbitration can become a victim of its own success. The judgment can be said to represent “an inexplicable throwback to a time when courts monopolized decision making and arbitrators were treated as second-class adjudicators”.116 The frequent use of international commercial arbitration in a wide range of contexts by parties who are seeking a speedy and efficient dispute resolution forum, has made some domestic courts wary of losing their judicial power, particularly in cases that may implicate public policy. Moreover, the complexities and intricacies of international commercial arbitration risk domestic courts drawing far-reaching conclusions on the basis of a fundamental misunderstanding of its principles. Indeed, while the ONCA may have been motivated by valid concerns regarding the use of arbitration in adhesion contracts, in class actions, or generally in the employment context, it was possible to achieve the same outcome, at least as far as the ESA ground for invalidity is concerned, without undermining the competence-competence principle and the SCC’s long-standing pro-arbitration jurisprudence.

As for the ONCA’s analysis of unconscionability, a preliminary determination of Heller’s status as an employee would not change *373 the fact that this remains a complex question of facts (beyond the employment question) and law that should have been referred to the arbitrator. Instead, the ONCA engaged in an incomplete and inaccurate analysis of this ground of invalidity, concluding that the arbitration agreement in this case was unconscionable largely on the basis of two findings. First, a perceived, yet unproven, unfairness inherent in ICC dispute resolution processes, and second, the mere facts, without more, that the arbitration agreement in this case is contained in an adhesion contract and invoked in a class action proceeding.

As such, the ONCA’s decision promises to spread uncertainty and unpredictability among parties to international commercial arbitration agreements seeking to enforce them in Canadian courts. The SCC ought not to allow the hard facts of this case to undermine the institution of international commercial arbitration, which is enshrined both in domestic legislation and in Canada’s international obligations. Rather, it should seize this appeal as an opportunity to clarify the proper interpretation and application of fundamental arbitration principles, thereby using these hard facts to make good law.

Footnotes

d1

Arthur Linton Corbin, “Hard Cases Make Good Law” (1923), 33 Yale L.J. 78-82.

a1

Assistant Professor, University of Alberta Faculty of Law.

1

Parties to international arbitration agreements can choose different laws to govern their agreement, the arbitral proceedings, the subject matter of the dispute, the place of arbitration, and the rules of conflict applicable to all of these.

2

As recently noted by the United States Supreme Court in response to an argument that “court must always resolve questions of arbitrability and that an arbitrator never may do so” - “that ship has sailed”, Henry Schein, Inc. v. Archer and White Sales, Inc., 139 S.Ct. 524 (2019) at 530.

3

“Model Law”, with amendments as adopted in 2006: https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/status.

4

“New York Convention” or “Convention”, New York, 10 June 1958, 330 UNTS 3 (entered into force 7 June 1959, accession by Canada 12 May 1986). At the time of writing, the Convention has 160 Parties: https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en. It has thus been said to play “a fundamental role in making arbitration the most popular means of dispute resolution in international trade”: Domenico Di Pietro, “General Remarks on Arbitrability under the New York Convention” in Loukas A. Mistelis and Stavros L. Brekoulakis eds., Arbitrability: International & Comparative Perspectives (2009) at 85.

5

See, e.g., International Commercial Arbitration Act, R.S.O. 1990, c. I.9; International Commercial Arbitration Act, R.S.B.C. 1996, c. 233; International Commercial Arbitration Act, R.S.A. 2000, c. I-5.

6

Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801, 284 D.L.R. (4th) 577 (S.C.C.) at paras. 41 and 73; Muroff c. Rogers Wireless inc., 2007 SCC 35, [2007] 2 S.C.R. 921, 284 D.L.R. (4th) 675 (S.C.C.) at para. 11. See, e.g., Arbitration Act, 1991, S.O. 1991, c. 17; Arbitration Act, R.S.B.C. 1996, c. 55; Arbitration Act, R.S.A. 2000, c. A-43.

7

The principle is set out in Article 16(1) of the Model Law, incorporated into provincial international arbitration statutes, as follows:

The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

8

International Council for Commercial Arbitration, “Guide to the Interpretation of the 1958 New York Convention: A Handbook for Judges” (2011) at 40-41, 63-64.

9

Much has been written on the numerous issues arising in the practise of international commercial arbitration. Regarding conflict of laws, see e.g., Franco Ferrari and Stefan Kröll, eds., Conflict of Laws in International Arbitration (2011). Regarding class actions and multi-party arbitration, see eg., Bernard Hanotiau and Eric A. Schwartz, Class and Group Actions in Arbitration (2016); Permanent Court of Arbitration, ed., Multiple Party Actions in International Arbitration (2009). Regarding non-signatories to arbitration agreements, see eg., Andrea Marco Steingruber, Consent in International Arbitration (2012). Regarding arbitrability, see e.g., Loukas A. Mistelis and Stavros L. Brekoulakis, Arbitrability: International & Comparative Perspectives (2009). See also, generally, Loukas A. Mistelis and Julian D.M. Lew, eds., Pervasive Problems in International Arbitration (2006); Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration, 4th ed. (2004); Gary B. Born, International Arbitration: Law and Practice (2012).

10

The original meaning of this phrase “concerned cases in which the law had a hard impact on some person whose situation aroused sympathy”, Neil MacCormick, Rhetoric and The Rule of Law: A Theory of Legal Reasoning (2005) at 49.

11

River Wear Commissioners v. Adamson, 2 App. Cas. 743 (1877) at 770 (per Lord Blackburn): “There is a legal proverb that hard cases make bad law; but I think there is truth in the retort that it is a bad law which makes hard cases”.

12

Leave to appeal was granted on 23 May 2019 (https://decisions.scc-csc.ca/scc-csc/scc-l-csc-a/en/item/17799/index.do).

13

2019 ONCA 1, 430 D.L.R. (4th) 410, 85 B.L.R. (5th) 1 (Ont. C.A.), leave to appeal allowed 2019 CarswellOnt 8196, 2019 CarswellOnt 8197, [2019] S.C.C.A. No. 58 (S.C.C.).

14

2018 ONSC 718, 421 D.L.R. (4th) 343, 79 B.L.R. (5th) 136 (Ont. S.C.J.), additional reasons 2018 ONSC 1690, 36 C.P.C. (8th) 215, 289 A.C.W.S. (3d) 699.

15

Arthur Corbin, “Hard Cases Make Good Law” (1923), 33 Yale L.J. 78.

16

For the purpose of this action, “Uber” is a group of companies that includes Uber Technologies Inc. (incorporated under the laws of Delaware and does not operate in Canada), Uber Canada, Inc. (incorporated under the laws of Canada, has no contractual relationship with the users of the Uber Apps, but provides marketing and administrative support to Uber B.V. for the Uber Apps in Canada), Uber B.V. (incorporated under the laws of the Netherlands with offices located in Amsterdam), and Rasier Operations B.V. (incorporated under the laws of the Netherlands with offices located in Amsterdam). Drivers in Ontario do not enter into contracts with Uber Technologies Inc. or Uber Canada Inc. They rather create a contractual relationship with Uber B.V. and with Rasier Operations B.V. (ONSC, supra, footnote 14, at paras. 1, 7-11, 16).

17

As will be explained in more detail below, this does not actually require the arbitral proceedings to physically take place in the Netherlands.

The dispute resolution clause provides in relevant part that:

Any dispute, conflict or controversy howsoever arising out of or broadly in connection with or relating to this Agreement, including those relating to its validity, its construction or its enforceability, shall be first mandatorily submitted to mediation proceedings under the International Chamber of Commerce Mediation Rules (“ICC Mediation Rules”). If such dispute has not been settled within sixty (60) days after a request for mediation has been submitted under such ICC Mediation Rules, such dispute can be referred to and shall be exclusively and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Arbitration Rules”) ... The dispute shall be resolved by one (1) arbitrator appointed in accordance with ICC Rules. The place of arbitration shall be Amsterdam, The Netherlands. (ONCA, supra, footnote 13, at para. 11.)

18

ONSC, supra, footnote 14, at para. 57.

19

Article 9 of the ICAA refers to Article II(3) of the Convention and Article 8 of the Model Law. Article II(3) of the Convention in turn provides that “[t]he court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed”. The language of Article 8(1) of the Model Law is essentially identical to that of the Convention.

20

Article 7(2) of the Act provides that:

... the court may refuse to stay the proceeding in any of the following cases:

1. A party entered into the arbitration agreement while under a legal incapacity.

2. The arbitration agreement is invalid.

3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law.

4. The motion was brought with undue delay.

5. The matter is a proper one for default or summary judgment.

21

ONSC, supra, footnote 14, at para. 35.

22

The court proceeded to analyze the issues arising in the case under both Acts.

23

ONSC, supra, footnote 14, at para. 38.

24

Ibid. at para. 45.

25

Ibid. at para. 47.

26

Ibid. at para. 48.

27

Ibid. at para. 65.

28

Ibid. at para. 49.

29

Ibid. at para. 58.

30

Ibid. at para. 64.

31

Ibid. at para. 66.

32

Ibid. at para. 68.

33

Ibid.

34

Ibid. at para. 69.

35

Ibid. at para. 70.

36

Ibid. at para. 71.

37

Ibid. at para. 74.

38

Appellant’s Factum, paras. 5-7.

39

Respondent’s Factum, paras. 3-5.

40

This is the standard set out by the SCC under the competence-competence principle: Dell, supra, footnote 6, at para. 85; Rogers, supra, footnote 6, at para. 11.

41

The ONSC determined the parties’ agreements were commercial without much analysis, whereas the ONCA did not decide the issue.

42

T Films S.A. v. Cinemavault Releasing International Inc., 2014 ONSC 4138 (Ont. S.C.J.) at para. 16. See also Smith Estate v. National Money Mart Co. (2008), 57 C.P.C. (6th) 99, 168 A.C.W.S. (3d) 763, [2008] O.J. No. 2248 (Ont. S.C.J.) at para. 194, additional reasons (2008), 92 O.R. (3d) 224, 169 A.C.W.S. (3d) 506, 2008 CarswellOnt 5256, additional reasons (2008), 67 C.P.C. (6th) 260, 172 A.C.W.S. (3d) 313, 2008 CarswellOnt 6673, affirmed 2008 ONCA 746, 303 D.L.R. (4th) 175, 61 C.P.C. (6th) 72 (Ont. C.A.), leave to appeal refused (2009), 260 O.A.C. 396 (note), 395 N.R. 400 (note), 2009 CarswellOnt 1228 (S.C.C.); Star Tropical Import & Export Ltd. v. International Project Management Consortium Ltd., 2011 ONSC 4005, 87 B.L.R. (4th) 318, 205 A.C.W.S. (3d) 22 (Ont. S.C.J.) at para. 22.

43

Dell, supra, footnote 6, at para. 85; Rogers, supra, footnote 6, at para. 11.

44

ONCA, supra, footnote 13, at para. 21.

45

Ibid.

46

Ibid.

47

The “null and void” exception under Article II(3) of the Convention is to be “interpreted as referring to cases in which the arbitration agreement is affected by some invalidity from the outset [such as] fraud or fraudulent inducement, unconscionability, illegality or mistake”, ICCA Guide, supra, footnote 8, at 52.

48

ICCA Guide, supra, footnote 8, at 40. As noted by the ONSC in this case, “[o]nce an agreement to arbitrate is shown to exist, the court will stay its own proceedings, unless it is clear that the dispute before the court is outside the terms of the arbitration agreement or that the parties are not subject to the agreement”, supra, footnote 14, at para. 52

49

ONCA, supra, footnote 13, at paras. 38-39.

50

Ibid. at para. 40.

51

Dell, supra, footnote 6, at para. 85. This test was unanimously upheld by the SCC in Rogers, supra, footnote 6, at para. 11.

52

ONCA, supra, footnote 13, at para. 46.

53

Seidel v. Telus Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531, 16 B.C.L.R. (5th) 1 (S.C.C.)

54

Ibid. at para. 27.

55

ONSC, supra, footnote 14, at para. 64.

56

ONCA, supra, footnote 13, at para. 27.

57

Rogers, supra, footnote 6, at para. 11.

58

ONSC, supra, footnote 14, at paras. 54, 64-65.

59

ONCA, supra, footnote 13, at paras. 41-42.

60

Ibid. at para. 49.

61

Ibid. at paras. 49-50.

62

ICCA Guide, supra, footnote 8, at 52.

63

Rogers, supra, footnote 6, at para. 15.

64

Ibid. at para. 16.

65

ONCA, supra, footnote 13, at para. 52.

66

The ONSC, in contrast, applied a three-part test of unconscionability: “(1) pronounced inequality of bargaining power; (2) a substantially improvident or unfair bargain; and (3) the defendant knowingly taking advantage of the vulnerable plaintiff”, ONSC, supra, footnote 14, at para. 68.

67

ONCA, supra, footnote 13, at para. 60. The court noted that it would have found the arbitration agreement in this case to be unconscionable even if it had applied only two requirements: inequality of bargaining power and unfairness: ibid. at para. 61.

68

Ibid. at para. 68.

69

Ibid.

70

Ibid.

71

Ibid. at para. 58.

72

Ibid. at para. 59.

73

The court “is the independent arbitration body of the ICC ... it does not itself resolve disputes. It administers the resolution of disputes by arbitral tribunals, in accordance with the Rules of Arbitration of the ICC ... The Court is the only body authorized to administer arbitrations under the Rules, including the scrutiny and approval of awards rendered in accordance with the Rules. It draws up its own internal rules”, ICC Arbitration Rules, Article 1(1)-(2).

74

ICC Rules, Article 38(1), Appendix III.

75

ONCA, supra, footnote 13, at para. 11.

76

Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration, 4th ed. (Thomson, 2004) at 84-88; Jacob Grierson and Annet van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, 2012) at 114-120.

77

This is also provided in the ICC Arbitration Rules, Article 18(2).

78

Application for leave to appeal, at para. 23.

79

ONCA, supra, footnote 13, at para. 15.

80

In fact, mediation can facilitate the resolution of international business disputes, particularly if integrated into an arbitration agreement, Christian Bühring-Uhle, Arbitration and Mediation in International Business (Kluwer Law International, 2006) at 241-242; Grierson and van Hooft, supra, footnote 76, at 57.

81

ONCA, supra, footnote 13, at para. 12-14. Courts in other jurisdictions have rejected lack of financial means as grounds for finding an arbitration agreement to be invalid. For instance, the Portuguese Supreme Court of Justice rejected the argument that there was a violation of public policy because the Portuguese respondent did not participate in the arbitration in the Netherlands because of a lack of financial means, ICCA Guide, supra, footnote 8, at 110.

82

ICC Mediation Rules, Article 6(6); ICC Arbitration Rules, Article 37(2).

83

In any event, these fees tend to be far surpassed by counsel fees, which would be applicable also in domestic litigation, Grierson and van Hooft, supra, footnote 76, at 30.

84

ICC Mediation Rules, Appendix, Article 1; ICC Arbitration Rules, Appendix III, Article 1.

85

ICC Arbitration Rules, Art. 38(3) and (4).

86

ONCA, supra, footnote 13, at para. 72.

87

TELUS Communications Inc. v. Wellman, 2019 SCC 19, 433 D.L.R. (4th) 1, 93 B.L.R. (5th) 1 (S.C.C.) at para. 83.

 

88

ONCA, supra, footnote 13, at para. 68.

89

Ibid. at para. 71.

90

Seidel v. Telus Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531, 329 D.L.R. (4th) 577 (S.C.C.) at para. 169; Dell, supra, footnote 6, at para. 228.

91

Dell, supra, footnote 6, at paras. 105-108, 223-224, 227, 229. The SCC used the term “abusive clause” rather than “unconscionable” as per Article 1437 of the Quebec Civil Code, which governed the dispute. The article defines an “abusive clause” as “a clause which is excessively and unreasonably detrimental to the consumer or the adhering party and is therefore contrary to the requirements of good faith; in particular, a clause which so departs from the fundamental obligations arising from the rules normally governing the contract that it changes the nature of the contract is an abusive clause”, Civil Code of Québec, CQLR c. CCQ-1991.

92

Seidel, ibid. at para. 2.

93

TELUS, supra, footnote 87, at para. 84.

94

ONCA, supra, footnote 13, at para. 68.

95

ONCA, supra, footnote 13, at para. 44.

96

Ibid. at para. 45.

97

Dell, supra, footnote 6, at paras. 105-106.

98

Ibid. at para. 229.

99

Ibid.

100

Geneviève Saumier, “Mass and Class Claims in Arbitration” in Bernard Hanotiau and Eric A. Schwartz, eds., Class and Group Actions in Arbitration (ICC, 2016) at 35.

101

Bisaillon c. Concordia University, 2006 SCC 19, [2006] 1 S.C.R. 666, 266 D.L.R. (4th) 542 (S.C.C.) at para. 22.

102

Seidel, supra, footnote 90, at para. 118.

103

Ibid. at para. 172.

104

Article I(3).

105

https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII1&chapter=22&clang=_en#EndDec. Approximately one third of the state parties to the New York Convention have made this reservation, ICCA Guide, supra, footnote 8, at 25.

106

ICCA Guide, supra, footnote 8, at 25.

107

Article 1(1).

108

Article 2(1).

109

ICCA Guide, supra, footnote 8, at 25 and 29.

110

Article 1(1), footnote 2. See also, ONSC decision, supra, footnote 14, at paras. 40-41.

111

In their respective factums, Uber argues that “the agreements are commercial” (at para. 32), while the Heller argues that his “claims do not qualify as ‘commercial”’ (para. 31). The parties therefore seem to focus on their “agreements” and “claims”, although the determination should be whether their relationship as a whole is commercial.

112

Ibid. at para. 47.

113

As noted earlier, the unconscionability argument invoked in this case as grounds for the invalidity of the arbitration agreement is a complex question of mixed fact and law that should have been referred to the arbitrator in any event.

114

Seidel, supra, footnote 90, at paras. 30 and 141.

115

TELUS, supra, footnote 87, at paras. 63 and 65.

116

Seidel, supra, footnote 90, at para. 55.

50 ADVOCQ 351

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