Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., 2012 SCC 9
Shortly after filing a statement of defence, the respondents Canadian American Association of Professional Baseball Ltd., and others moved under Rule 21.01(3)(a) of the Ontario Rules of Civil Procedure, R.R.O. 1990, to dismiss a claim against them on the ground that Ontario Courts had no jurisdiction because the appellants had signed agreements providing that disputes would be arbitrated or litigated in North Carolina. The motion judge dismissed the action against all the respondents on the basis of these arbitration and forum selection clauses and the Ontario Court of Appeal for Ontario upheld the decision.
The issue before the Supreme Court of Canada was whether the defendants could move under Rule 21.01(3)(a) to seek dismissal of the action based on the arbitration and forum selection clauses in the agreements, notwithstanding the delivery of a statement of defence. The appellants argued that a party that delivers a statement of defence on the merits is precluded from relying upon a forum selection clause, even where the statement of defence explicitly seeks to enforce the clause.
The Supreme Court dismissed the appeal and held that the defendants were entitled to bring a motion to dismiss the action because the parties had agreed to arbitrate and litigate disputes in another forum. Although the motion must be brought promptly, there is nothing in Rule 21.01(3)(a) that requires it to be brought before delivery of a statement of defence. Within the framework provided by the Ontario Rules of Civil Procedure, a statement of defence that specifically pleads a foreign forum selection clause does not amount to consent that Ontario assume jurisdiction so as to preclude consideration on the merits of whether to enforce the clause.
The appellants did not argue that there was any reason, apart from the delivery of a statement of defence, for the court to determine that there was “strong cause” for Ontario to displace the forum that the parties have agreed should resolve their disputes.