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PRIL - Forum Venue Selection Clauses (2). Shirodkar v. Coinbase Global, Inc.
In Shirodkar v. Coinbase Global, Inc. (Ont CA, 2025) the Ontario Court of Appeal dismissed an appeal, here from a class action motion order finding that Ireland was the "preferable forum for the adjudication of the appellant’s claims".
Here the court considers a forum selection clause and party-cited cases:[30] Even applying a correctness standard, however, I see no error in the motion judge’s conclusion that the Canadian User Agreement grounds the jurisdiction of Ontario courts only over Coinbase Canada, and not the non-Canadian respondents.
[31] The appellant argues that the forum selection clause governs claims against all Coinbase respondents, for three reasons. First, s. 10.4 refers to “claims and disputes that arose between us before the effective date of these terms”. Second, Coinbase Canada’s operations are intertwined with the operations of the non-Canadian respondents. Third, the Second and Third User Agreements recognize users’ right to sue in their domestic courts under local consumer legislation.
[32] With respect to the retroactivity argument, I agree with and adopt the motion judge’s cogent analysis of the language and scope of s. 10.4. Read in the context of the Agreement as a whole, it does not retroactively confer jurisdiction to Ontario courts over historic claims against non-parties to the Canadian User Agreement. The only parties to the Agreement are Coinbase Canada and its users. Had Coinbase Canada intended to bind other Coinbase companies to the dispute resolution provision in the Agreement, s. 10.4 would refer to disputes between its users and the Coinbase Group. The “claims and disputes that arose between us before the effective date of these terms” described in s. 10.4 clearly encompass only prior claims against Coinbase Canada. Accordingly, “prior versions of this Agreement” captures earlier versions of the Canadian User Agreement, not any user agreement ever accepted by any Canadian user accessing services offered through other Coinbase companies.
[33] The appellant argues that this reading is illogical because the reference to “prior versions of this Agreement” appears in the very first version of the Canadian User Agreement. I agree with the motion judge that this reference merely anticipates that there will be later versions of the Agreement, as indeed there were.
[34] The appellant’s second argument is that the non-Canadian respondents are necessarily caught by s. 10.4 because of the nature of the claims against them and their relationship with each other. Relying on Momentous Corporation v. Canadian American Association of Professional Baseball Ltd., 2010 ONCA 722, 103 O.R. (3d) 467, aff’d 2012 SCC 9, [2012] 1 S.C.R. 359; Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771, 132 O.R. (3d) 481; and Bank of Nevis International Limited v. Kucher, 2024 ONCA 240, leave to appeal to S.C.C. refused, 41313 (November 21, 2024), he contends that the intertwined nature of the Coinbase respondents’ operations is relevant to the interpretation of the forum selection clause.
[35] Contrary to the appellant’s assertion in his factum, these decisions do not establish that “a forum selection clause governs the entirety of the claims against all defendants where … one of the defendants is a party to the agreement, the claims against it are ‘intertwined with’ the claims against non-signatory defendants, and the relief sought against all defendants arises out of ‘the same transaction and occurrences’ or raise common questions of fact and law.” This assertion mischaracterizes the basis for these decisions and conflates the jurisdiction analysis with the forum non conveniens analysis.
[36] In Momentous, Novatrax and Bank of Nevis, plaintiffs who sued in Ontario faced motions to dismiss or stay by defendants with whom they had entered in a contract containing a choice of forum clause requiring arbitration of any disputes under foreign law. Other parties who were not parties to the contracts were also named defendants. In each case, this court upheld stays or dismissals of proceedings against all defendants so that claims that were “intertwined” could be heard together in the forum designated by the clause. In none of them, however, did the court find that a contractual choice of forum clause in favour of Ontario courts can be the basis for jurisdiction over a non-signatory to a contract.
[37] Momentous dealt with an exclusive forum selection clause, the applicability of which could only be rebutted by showing “strong cause” as to why the forum designated in the clause should not prevail. The plaintiffs failed to meet the test, and this court agreed with the motion judge’s determination that, since the defendants who were not party to the agreement containing the forum selection clause were necessary parties to the action against those who were, the claims had to be dealt with together in the designated forum.
[38] In contrast, the choice of forum clause in the Canadian User Agreement is non-exclusive, and the strong cause test does not apply: see Forbes Energy Group Inc. v. Parsian Energy Rad Gas, 2019 ONCA 372, 93 B.L.R. (5th) 169, at para. 6.
[39] Novatrax was also a case in which the plaintiff failed to show strong cause for proceeding in Ontario rather than the foreign forum designated in an exclusive jurisdiction clause. While finding that the facts of that case required the clause to “drive the stay analysis”, Brown J.A. affirmed that “a court lacks the jurisdiction to compel those who are not parties to an arbitration agreement to submit their claims to arbitration”: at paras. 22-24.
[40] The defendants in Bank of Nevis included a company and its owner, a natural person. The court found that the owner was bound by a choice of forum clause in a contract to which the company was a party, though he was not. But this finding was based on the facts as pleaded by the plaintiff, who alleged that the owner controlled the company and was personally liable for its conduct. The court found that a plaintiff could not invoke privity of contract to dispute the application of a forum selection clause while at the same time alleging that the corporate veil should be pierced for the purpose of claiming damages for contractual breach against an individual defendant. Once again, in Bank of Nevis, the court was dealing with an exclusive jurisdiction clause.
[41] Beyond this, Momentous, Novatrax, and Bank of Nevis concerned whether a plaintiff could sue in Ontario even though it had agreed, in a contract, to litigate their dispute, or at least a central element of it, in another forum. Here, the question is whether an Ontario court can assume jurisdiction over a foreign defendant based on a contract to which it was not a signatory. These are fundamentally different questions. . Integrated Team Solutions PCH Partnership v. Mitsubishi Heavy Industries, Ltd.
In Integrated Team Solutions PCH Partnership v. Mitsubishi Heavy Industries, Ltd. (Ont CA, 2025) the Ontario Court of Appeal dismissed an appeal, this from a dismissal of a motion brought by a class action defendant "seeking an order staying the proceedings against them on the basis that the Ontario Superior Court of Justice either lacks jurisdiction or should decline to exercise jurisdiction because of a forum selection clause".
Here the court considered the 'forum selection clause' issue:(3) The Forum Selection Clause
[16] To rely on a forum selection clause, the moving party must prove that it is valid, clear, enforceable, and applicable to the cause of action before the court. The burden then shifts to the opposing party to show “strong cause” for non-enforcement. See Douez v. Facebook, Inc., 2017 SCC 33, [2017] 1 S.C.R. 751, at paras. 28-29.
[17] The appellants rely on a clause in the General Terms and Conditions that they assert form part of S.D.M.O.’s contract with GAL Power that assigns exclusive jurisdiction to a French commercial court. The appellants argue that it applies to the entire dispute and requires a stay of the claims and crossclaims against them.
[18] I do not accept this argument because, as the motion judge found, the appellants did not meet their burden to prove that a valid, clear, and enforceable forum selection clause applies. Instead of attaching the General Terms and Conditions to an affidavit or otherwise presenting them in an admissible form, the appellants filed them in a Motion Record and claimed that the pleadings incorporated them by reference. But as the motion judge determined, the General Terms and Conditions were neither incorporated by reference into the pleadings nor properly introduced into evidence by the appellants.
[19] The motion judge was right. A statement of claim only incorporates documents by reference if (1) it refers to them, and (2) they form an integral part of the plaintiff’s claim. See Del Giudice v. Thompson, 2024 ONCA 70, 169 O.R. (3d) 731, at para. 18, leave to appeal refused, [2024] S.C.C.A. No. 113. The first condition is not met in the present case. The statement of claim, although it briefly mentioned the S.D.M.O.-GAL Power contract, did not reference the General Terms and Conditions themselves. While that might not have defeated incorporation by reference if it was undisputed that those terms formed part of the contract, it does in this case because the respondents did properly dispute this point. Unlike in Del Giudice, where the responding parties failed to make a timely objection to the documents included in the moving parties’ materials and called no evidence (at para. 26), the respondents here timely objected to the inclusion of the General Terms and Conditions and called evidence to support their position. Specifically, GAL Power denied that the General Terms and Conditions applied, and the respondent plaintiffs’ affiant deposed that they had no knowledge of the contract. Thus, the appellants’ reliance on Del Giudice is misplaced.
[20] Accordingly, the appellants failed to meet their burden to prove the forum selection clause’s existence by calling evidence to establish that the contract included it. After all, “[i]t is the practice in Ontario for the motions court to receive evidence pertinent to the jurisdictional issue, such as a copy of the [] agreement … or other affidavit evidence,” including where, as here, the moving party alleges that the claims should be stayed in favour of another forum. See Goudie v. Ottawa (City), 2003 SCC 14, [2003] 1 S.C.R. 141, at para. 32, citing Leufkens v. Alba Tours International Inc. (2001), 2001 CanLII 28038 (ON SC), 53 O.R. (3d) 112 (S.C.). Parties who do not follow this sound practice run the risk that, if their incorporation by reference arguments fail, the court will not be able to consider the material they included in an unsworn book of documents, which does not constitute evidence. See Hunks v. Hunks, 2017 ONCA 247, 136 O.R. (3d) 641, at para. 41.
[21] I would further defer to the motion judge’s finding that the clause neither applied to GAL Power’s crossclaim nor bound the respondent plaintiffs, the other respondent defendants, or Kohler.
[22] To begin with, I agree with the motion judge that the clause did not apply to GAL Power’s crossclaim because it is ambiguous. The clause confers jurisdiction over disputes “related to a supply or the payment for this supply”. As the respondents submit, the General Terms and Conditions use the word “supply” inconsistently, sometimes to describe the product provided, and elsewhere to reference the act of supplying the product to the buyer. As the motion judge reasoned, it would not cover the manufacturing defects that GAL Power alleged if it meant the latter. Because the clause is ambiguous, it could not confer exclusive jurisdiction on the French commercial court. See Savanta, at paras. 5, 9-11.
[23] I also agree with the motion judge that the appellants failed to show that the respondent plaintiffs, the other respondent defendants aside from GAL Power, and even the appellant Kohler had agreed to be bound by the clause. After all, they did not appear to be parties to the S.D.M.O.-GAL Power contract. See Aldo Group Inc. v. Moneris Solutions Corporation, 2013 ONCA 725, 118 O.R. (3d) 81, at para. 44, leave to appeal refused, [2014] S.C.C.A. No. 31. I need not consider the appellants’ submission that the respondent plaintiffs are bound to the clause as third-party beneficiaries because, as the motion judge found, they did not argue this or any other exceptions to the privity of contract rule before him. They did not explain their failure to do so before this court. See Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, at paras. 18, 22. . Pesorama Inc. v. Borden Ladner Gervais LLP.
In Pesorama Inc. v. Borden Ladner Gervais LLP. (Div Court, 2024) the Divisional Court considered an appeal from a associate-judge issued stay order [under CJA s.106], here of an action alleging "solicitor-client negligence, breach of fiduciary duty and other wrongs".
The primary issue was the effectiveness of a forum selection clause that required proceedings to be conducted in Alberta. Here the court considers the nature of a CJA 106 stay:[10] Section 106 of the CJA reads:Stay of proceedings
106 A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just. R.S.O. 1990, c. C.43, s. 106. [11] There is no limit on the law or circumstances that can support a stay of proceedings under s 106 of the CJA. In Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., 2010 ONCA 722 at para. 45, Laskin J.A. refers to the fact that parties may move to challenge the jurisdiction of Ontario courts under “s. 106 of the Courts of Justice Act R.S.O. 1990, c. C. 43, rules 17.06 and 21.01(3)(a) of the Rules of Civil Procedure.”
[12] That is what the Respondents did in their motion. They moved to challenge the jurisdiction of the Ontario courts on the basis of forum non conviens and relied on the forum selection clause in the retainer agreement.
[13] In his June 20, 2023 reasons staying the Ontario action, the Associate Justice cited Novatrax International Inc. v. Hagele Landtechnik GmbH, 2016 ONCA 771, which in turn referred to the Supreme Court of Canada decision in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27. He cited these principles from Novatrax International:. The law favours the enforcement of forum selection clauses in commercial contracts;
. Where a forum selection clause exists, that is the starting point for the forum non conviens analysis;
. A stay of an action should be granted unless there is “strong cause” the case is exceptional, and the forum selection clause should not be enforced;
. A forum selection clause pervades the forum non conviens analysis and must be given full weight in consideration of other factors. ....
[17] In the case at bar, the Associate Justice defined the issue as “not whether the plaintiff can sue [the] defendants,” but as “where the plaintiff can sue these defendants.” He grounded his analysis in the issue defined by the parties, that is, by applying the doctrine of forum non conviens. He correctly identified the leading authorities applied the two-step test, including Douez v. Facebook Inc. 2017 SCC 33, [2017] 1 SCR 751. This two-step test applies to instances of valid forum selection clauses, as differentiated from the “ordinary” cases which apply the forum non conviens doctrine in the absence of such a clause: see Pompey at para. 21.
[18] Under the test for forum selection clauses, at step one, the party seeking a stay of proceedings must establish that there was a valid, clear, and enforceable forum selection clause in the contract that applies to the cause of action before the court: Douez at para. 28; Pompey at para. 30. The enforceability of the contract at this first stage is limited to defences of undue influence, fraud, or unconscionability: Douez at para. 28; Pompey at para. 31.
[19] At step two of the test, once the party seeking to stay the proceedings establishes there is a valid forum selection clause, the onus shifts to the plaintiff. The plaintiff must then show “strong cause” why the parties should not be held to their agreement: Douez at para. 29; Pompey at para. 19, 30-31. At this stage, the court is to exercise its discretion by considering all the circumstances, including fairness, convenience, public policy, and the interests of justice: Douez at para. 29; Pompey at para. 19 and 30-31.
[20] The Associate Justice applied the correct test as articulated in Douez and Pompey. He found:In my view, the conclusions of the Supreme Court support the forum and law selection clause in this within case being upheld. The agreement, and the clause, is “valid, clear and enforceable” and I find that it applies to the cause of action which the plaintiff brings. The parties in this matter are, moreover, sophisticated. Mr. Bhaloo was not a vulnerable individual retaining a lawyer for the first time on, for example, a family law matter or to make a simple will. Again the evidence is clear he was a business-person consulting counsel for high level business purposes, including to eventually have his company “go public”. [21] The Appellants have provided no authority for their submission that a stay under s. 106 is not available where the issue involves the specialized subset of a forum non conviens analysis involving a forum selection clause, and the two-step test with its shifting onus. The agreement of the parties to a forum for the resolution of disputes does not affect the jurisdiction of the courts over the subject matter of a dispute simply by virtue of their private agreement: see Douez at para 27.
[22] In its brief endorsement upholding the Ontario Court of Appeal in Momentous.ca the Supreme Court of Canada agreed that applying a forum selection clause is discretionary, writing:In Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, this Court confirmed that, in the absence of specific legislation, the proper test in determining whether to enforce a forum selection clause is discretionary in nature. It provides that unless there is a “strong cause” as to why a domestic court should exercise jurisdiction, order and fairness are better achieved when parties are held to their bargains.
See Momentous.ca 2012 SCC 9 (CanLII), [2012] 1 SCR 359 at para. 9. [23] The Associate Judge exercised his discretion under s. 106 of the CJA to determine whether a stay of proceedings should be entered based on the applicable jurisprudence relative to a specific subset of the forum non conviens equitable doctrine where forum selection clauses are in play. He did not purport to exercise jurisdiction under Rule 21 of the Rules. The fact that such a clause might form the basis of a motion under Rule 21 (or Rule 17 for that matter) does not mean that it cannot or does not apply to a motion to stay a proceeding under s. 106 of the CJA.
[24] I conclude that the Associate Justice did not err in either citing the principles in Novatrax or in adjudicating the question of whether Ontario was a forum non conviens based on the applicable test where the retainer agreement signed by the parties included a forum selection clause.
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