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Contracts - Forum Selection Clauses

Novatrax International Inc. v. Hägele Landtechnik GmbH (Ont CA, 2016)

In this case the Court of Appeal enumerated the considerations for deciding whether the enforce what it called a 'forum selection clause' (which purported to determine the law applicable to the adjudication of disputes under the contract) as follows:
[5] The parties agree that the motion judge correctly identified the governing principles as those set out by the Supreme Court of Canada in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27 (CanLII), [2003] 1 S.C.R. 450, and by this court in Expedition Helicopters Inc. v. Honeywell Inc., 2010 ONCA 351 (CanLII), 100 O.R. (3d) 241, leave to appeal refused, [2010] 3 S.C.R. v (note), and 2249659 Ontario Ltd. v. Sparkasse Siegen, 2013 ONCA 354 (CanLII), 115 O.R. (3d) 241:
(i) The law favours the enforcement of forum selection clauses in commercial contracts. Where the parties have agreed to a forum selection clause, the starting point of the forum non conveniens analysis is that the parties should be held to their bargain;

(ii) A stay of an action should be granted unless the plaintiff shows “strong cause” that the case is exceptional and the forum selection clause should not be enforced;

(iii) The requirement that the plaintiff show “strong cause” presumes that there is an agreement containing a clear forum selection clause and that clause, by its terms, applies to the claims the plaintiff seeks to bring in Ontario; and

(iv) The forum selection clause pervades the forum non conveniens analysis and must be given full weight in the consideration of other factors.

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