On June 10, 2021, the Supreme Court of Canada granted leave to appeal a decision with implications for the enforceability of alternative dispute resolution clauses in insolvency proceedings in Canada. Background In Petrowest Corp. v. Peace River Hydro Partners, a receiver was appointed over Petrowest under Canada’s federal Bankruptcy and Insolvency Act (“BIA”). In this case, the receiver later assigned the company into bankruptcy and was also acting as its bankruptcy trustee. The receiver/trustee commenced…
In a recent decision Industrial Alliance Insurance and Financial Services Inc. v Wedgemount Power Limited Partnership 2018 BCSC 970, the British Columbia Superior Court confirmed that:
- under Canada’s Bankruptcy and Insolvency Act, courts have broad powers and discretion to protect the interests of creditors and other affected parties including by staying the operation of an agreement to arbitrate if it is necessary to maximize recoveries in an insolvency proceeding.
In this dispute, a receiver had been appointed by the court over Wedgemount Power Limited Partnership, Wedgemount Power (GP) Inc. and Wedgemount Power Inc. (collectively, “Wedgemount”) on the application of the primary lender and secured creditor in 2017.