To Stay Or Not To Stay? B.C Supreme Court Grants A Stay And Finds Arbitration Clause Contained In A Standard Form Contract To Be Valid

In a recent case brought before the British Columbia Supreme Court, Williams v. Amazon1, the Court had to determine the validity of an arbitration agreement (or arbitration clause), contained in a contract of adhesion, in the context of an application for a stay of class proceedings in favour of arbitration pursuant to section 15 of the Arbitration Act2.

The Court granted the application to stay in favor of arbitration, with the result of having parallel proceedings, litigation and arbitral, depending on the nature of claims: consumer and non-consumer.

In addition, the Court distinguished the case from Heller v. Uber Technologies Inc.3, currently under appeal before the Supreme Court of Canada, in which the Ontario Court of Appeal reached a different conclusion and refused to stay the class proceedings. Indeed, in Heller, the Ontario Court of Appeal found that the arbitration clause contained in a contract of adhesion was invalid as it resulted in an illegal contracting out of employment standards and was moreover unconscionable based mainly on the imbalance between the parties and substantial financial costs for a claimant to arbitrate. However, in the present case, the Court found that the arbitration clause provided for a refund of costs in many cases. Further, the arbitration could be conducted through flexible options, and as such, this was not a substantially unfair bargain so as to meet the test for unconscionability.

Background Facts

The plaintiff, John Williams, alleged that the defendants, Amazon.com Inc., Amazon Services International, Inc. and Amazon.com.ca, Inc. (collectively ''Amazon'') have, "for their own benefit and to the detriment of consumers, agreed with third party sellers not to compete for the sales of new books, music, movies, and DVDs on the Amazon Canada website". The plaintiff alleged that, as a result, consumers had been unlawfully overcharged. The plaintiff sought various remedies under section 172 of the Business and Consumer Protection Act ("BPCPA")4, namely the "Consumer Claims". The plaintiff also sought various "Non-Consumer Claims", inter alia, under section 36 of the Competition Act5, and for the tort of conspiracy.

All of Amazon's costumers are subject to Conditions of Use, which contain an arbitration clause. Amazon was seeking a stay of the plaintiff's Non-Consumer Claims, conceding that the Consumer Claims could proceed to a certification hearing pursuant to the Supreme Court of Canada's decision in...