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.

Background

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.