Travelers Insurance Company of Canada and 9227-9702 Québec Inc. v. Greyhound Canada Transportation ULC and Chubb Life Insurance Company of Canada, and Groupe De Sécurité Garda S.E.N.C.

At a glance

Parties

Travelers Insurance Company of Canada and 9227-9702 Québec Inc. (plaintiffs) v. Greyhound Canada Transportation ULC and Chubb Life Insurance Company of Canada (defendants and plaintiffs in warranty) and Groupe de sécurité Garda s.e.n.c. (defendant and defendant in warranty)

Case no.

No. 500-22-268503-219; 2022 QCCQ 4746

Court

Court of Québec (Cour du Québec), Civil Division, District of Montréal

Forum and rules

Court decision on referral to arbitration under Article II(3) of the New York Convention and article 622 of the Québec Code of Civil Procedure

Treaty

Arbitration clause in the framework agreement of 2 November 2010 between Greyhound and Garda (Article 26)

Court

Judge Stéphane Davignon, J.C.Q.

Sector

Security services; bus terminal; property damage insurance

Outcome

The Court declined jurisdiction over the warranty claim by Greyhound and Chubb against Garda and referred those parties to arbitration. The main action stays before the Court.

Amount

Damages claimed in the main action: $59,323.33 in total ($56,823.33 by Travelers as subrogated insurer and $2,500 deductible by 9227). Costs were awarded ("avec les frais de justice").

The dispute

9227-9702 Québec Inc. is the main tenant of the long-distance bus terminal at 1717 rue Berri, Montréal. It sublet space there to Greyhound. Under a framework agreement of 2 November 2010, Greyhound had hired Garda to provide security services, including baggage inspection. On 6 August 2018 a propane cylinder that Garda had confiscated from a traveller the day before exploded in a room sublet to Greyhound. The explosion set off a sprinkler head and damaged the building. 9227 and its insurer Travelers sued Greyhound, Garda and later Chubb (alleged to be Greyhound's insurer) for $59,323.33. Greyhound and Chubb then brought a claim in warranty against Garda under the indemnity clause (Article 17) of the agreement. Garda asked the Court to refer that claim to arbitration under Article 26, which sends disputes under USD 300,000 to binding arbitration administered by JAMS or another national provider. Greyhound and Chubb argued that the clause did not clearly give exclusive jurisdiction to a foreign forum or to an arbitrator.

Key holdings

1. The last paragraph of article 3148 of the Civil Code of Québec removes the jurisdiction of Québec authorities where the parties have agreed to submit disputes to a foreign authority or to an arbitrator. Following the Supreme Court in GreCon Dimter, the will of the parties must be respected in the light of Article II(3) of the New York Convention and article 622 of the Code of Civil Procedure. ¶¶ 12–22
2. Article 26 of the agreement clearly gives an arbitrator exclusive jurisdiction over all disputes worth less than USD 300,000. Any non-exclusive character of the forum-selection part does not defeat the arbitration clause. The parties chose to harmonise dispute resolution because their relationship covered all of North America. ¶¶ 23–24
3. Chubb is not a signatory to the agreement. However, it did not dispute that its warranty claim, brought as subrogated insurer of Greyhound, arises from the agreement. ¶ 16
4. The main action by 9227 and Travelers, who are not parties to the agreement, stays before the Québec court, so there will be parallel proceedings. Concerns about proportionality and the risk of conflicting decisions cannot override the parties' agreement. Following GreCon and Société québécoise des infrastructures c. WSP Canada, the solution to such duplication must come from the parties themselves. ¶¶ 25–27
5. The Court declined jurisdiction over the warranty claim of 22 February 2022, referred Greyhound, Chubb and Garda to arbitration on that claim, and rejected the request for forced intervention, with legal costs. ¶¶ 28–32

Procedural history

1. 2 November 2010Greyhound and Garda conclude the framework agreement for security services.
2. 6 August 2018A propane cylinder explodes at the Berri Street bus terminal in Montréal and damages the building.
3. 29 July 20219227 and Travelers file the originating application against Greyhound and Garda.
4. 17 February 2022The application is amended to add Chubb as a defendant.
5. 22 February 2022Greyhound and Chubb file their defence and a claim in warranty against Garda.
6. 12 May 2022Hearing on Garda's application for referral to arbitration.
7. 28 June 2022Judgment of the Court of Québec: jurisdiction over the warranty claim declined and the parties to that claim referred to arbitration.

Tribunal, counsel and experts

Decided by

• Stéphane Davignon Judge, Cour du Québec

For the claimant

Faguy & Co

For the respondent

Robinson Sheppard Shapiro s.e.n.c.r.l. · Groupe de sécurité Garda s.e.n.c.

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Keywords

• referral to arbitration
• New York Convention Article II(3)
• article 622 Code of Civil Procedure
• article 3148 Civil Code of Québec
• claim in warranty
• forum selection clause
• indemnity clause
• JAMS
• Federal Arbitration Act
• GreCon Dimter
• parallel proceedings
• subrogated insurer
• non-signatory
• Greyhound
• Garda
• propane explosion
• bus terminal
• Québec

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