Lululemon Athletica Canada Inc. v. Industrial Color Productions Inc.

At a glance

Parties

lululemon athletica canada inc. (appellant/petitioner) v. Industrial Color Productions Inc. (respondent); proposed intervenors: the Arbitration Place, ADR Chambers Inc., The Chartered Institute of Arbitrators (Canada) Inc.

Case no.

Court of Appeal for British Columbia, Dockets CA47227; CA47296 (2021 BCCA 225)

Forum and rules

Court of Appeal for British Columbia (in chambers); appeal from set-aside review under the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233

Court

Madam Justice Newbury (in chambers)

Underlying award(s)

Arbitral award in favour of ICP (seated in British Columbia), upheld by Funt J. in 2021 BCSC 15 and 2021 BCSC 422

Sector

Media production services; athletic apparel retail

Outcome

All three applications for leave to intervene in the appeal were dismissed (9 June 2021).

Amount

Award under appeal: USD 1,081,967 in damages, plus a USD 455,755.03 invoice for July 2019 services

The dispute

In August 2016 Industrial Color Productions Inc. (ICP), a provider of media production services, agreed in a Services Agreement to supply photography and production services to lululemon for its global e-commerce platforms. On 13 May 2019 lululemon gave notice that it would terminate the Agreement as of 1 August 2019. ICP argued that the notice could not take effect until 14 October 2019. An arbitrator seated in British Columbia under the International Commercial Arbitration Act agreed with ICP. He awarded USD 1,081,967 for 75 days of losses and also ordered lululemon to pay a USD 455,755.03 invoice. Funt J. of the Supreme Court of British Columbia refused lululemon's application under s. 34(2)(a)(iv) to set aside the damages award as beyond the scope of the submission to arbitration, applying a reasonableness standard. On lululemon's appeal, three arbitration organisations applied for leave to intervene. This chambers decision deals only with those applications.

Key holdings

1. Intervenor status is discretionary. An applicant must have a direct interest, or a public interest in a public law issue, and must be able to make a valuable contribution or bring a perspective different from the parties'. The court applied the test from Halalt First Nation v. British Columbia (Environment), 2012 BCCA 191. ¶ 23
2. The submissions of the Arbitration Place and ADR Chambers on the standard of review, the Model Law and the New York Convention overlap to a significant degree with lululemon's factum. Lululemon already argues for a correctness standard under s. 34(2)(a)(iv) and for international consistency. ¶ 22
3. The Court was not persuaded that it would be truly assisted by those two applicants. It is likely to be guided by how the Act applies to this case rather than by general arguments about Canada's reputation as an arbitration venue and the uniformity of arbitral practice. ¶ 24
4. CIArb Canada's proposed submission on the sufficiency of the award's reasons was refused. Lululemon had not raised that issue, and an intervenor's role does not extend to raising new grounds of appeal. ¶ 25
5. All three applications for leave to intervene were dismissed. ¶ 26

Procedural history

1. August 2016The parties entered into the Services Agreement, whose ss. 53 and 54 provide for arbitration.
2. 13 May 2019Lululemon gave notice terminating the Agreement as of 1 August 2019.
3. 6 January 2021The Supreme Court of British Columbia (Funt J.) upheld the award on review (2021 BCSC 15); a further order followed on 25 February 2021 (2021 BCSC 422).
4. 23 February 2021Griffin J.A. granted lululemon a stay of execution pending appeal (2021 BCCA 108).
5. 31 May 2021The intervention applications were heard in chambers in Vancouver.
6. 9 June 2021Newbury J.A. dismissed all three intervention applications. The appeal was scheduled to be heard for one day in October 2021.

Tribunal, counsel and experts

For the claimant

T.M. Shoranick

For the respondent

M.A. Feder

For other participants

L. Cundari · H. Randhawa · S.A. Bandali · R.K. Agarwal · G.K. Keshava · R.J.C. Deane · C.R. Chiasson

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Keywords

• lululemon
• intervenor status
• set-aside
• International Commercial Arbitration Act
• UNCITRAL Model Law
• New York Convention
• standard of review
• reasonableness
• correctness
• excess of mandate
• scope of submission to arbitration
• sufficiency of reasons
• United Mexican States v. Cargill
• termination for convenience
• Chartered Institute of Arbitrators
• British Columbia

Summary generated with AI from the published documents — refer to the award for the authoritative text.