In Yegre EB Ltd. v. Seguin, 2024 BCCA 365, Shane Coblin and Milaad Hashmi were successful in having the Court of Appeal overturn a Chambers Judge’s finding that a forum selection clause in a property purchase agreement conferred exclusive jurisdiction upon the courts of the province of Alberta. This case provides guidance on the test applicable when interpreting a forum selection clause, and it clarifies that the failure to properly interpret or apply case law constitutes an extricable error of law in the contractual interpretation process.
The case involved a 2015 purchase agreement in which the appellant purchased five industrial properties in British Columbia and Ontario from the respondents. In 2022, the appellant commenced proceedings in the BC Supreme Court alleging fraudulent misrepresentation, breach of contract, and negligence in connection with the purchase of the properties. The respondents filed a jurisdictional response and then brough an application to stay the claim on the basis of the forum selection clause.
The clause stated that the parties “submit to the jurisdiction of the Alberta courts for all purposes arising in connection with this Agreement.” The Chambers Judge agreed with the respondents and interpreted the clause as granting exclusive jurisdiction to Alberta. Fundamental to the Chambers Judge’s decision, was her finding that the common law draws a distinction between the words “submit” and “attorn”, and that “submit” means something more than simply attorning; it signals exclusivity.
The Court of Appeal disagreed and found the clause to be ambiguous, noting it could reasonably support both exclusive and non-exclusive interpretations. The Court held that a review of the common law does not support a distinction between words “attorn” or “submit”; and that neither word conclusively denotes exclusivity on its own. The Court clarified that the burden on a jurisdictional application rests with the party seeking to invoke a forum selection clause to show that the clause clearly and unambiguously confers exclusive jurisdiction to another forum. In this case, the language was ambiguous. As such, the Court of Appeal set aside the order of the Chambers Judge, interpreted the clause as merely conferring non-exclusive concurrent jurisdiction on Alberta, and dismissed the underlying stay application.
This decision is also notable as it represents a unique finding by the Court of Appeal: the misinterpretation of case law is an error of law extricable from the contractual interpretation process.
In the end, this case provides a useful reminder to parties drafting forum selection clauses that clear and unambiguous language is required to confer exclusive jurisdiction upon a particular forum. In this regard, the words “submit or “attorn”, on their own, do not connote exclusivity.
