Recently, the British Columbia Court of Appeal (BCAA) in Yegre EB Ltd. v. Seguin, 2024 BCCA 365, clarified the interpretation and enforcement of forum selection clauses in commercial contracts. The decision has wide implications for parties drafting agreements with jurisdictional provisions, particularly in cross-provincial and cross-border contexts.

This case arose from a dispute between Yegre EB Ltd., the appellant, and various respondents regarding the sale of five industrial properties across British Columbia and Ontario. The crux of the matter was the interpretation of a forum selection clause in the purchase agreement, which stipulated that parties "submit to the jurisdiction of the Alberta courts for all purposes arising in connection with this Agreement."

Initially, the British Columbia Supreme Court granted a stay of proceedings because the clause conferred exclusive jurisdiction to the Alberta courts. However, Yegre EB Ltd. appealed, arguing that the clause merely provided for non-exclusive jurisdiction, allowing claims to be pursued in British Columbia.

Interpreting "Submit" vs. “Attorn”

The BCCA rejected the trial judge's interpretation the term "submit" signaled exclusivity. Drawing from prior rulings, the Court found no substantive difference between "submit" and "attorn" in the context of jurisdictional clauses. Both terms suggest agreement to a court's jurisdiction but do not inherently exclude others unless expressly stated.

The clause's language "for all purposes arising in connection with this Agreement" was found to be open to multiple reasonable interpretations. While the respondents argued this phrasing implied exclusivity, the Court noted that clearer language (e.g., "exclusive" or "only") could have been used. Given this ambiguity, the Court held that the clause provided for non-exclusive jurisdiction.

Even with non-exclusive jurisdiction, the respondents argued Alberta was the more appropriate forum. The Court assessed the statutory factors under the Court Jurisdiction and Proceedings Transfer Act (CJPTA), such as the location of witnesses, the governing law, and the interests of justice. It concluded British Columbia was not a less appropriate forum, allowing the case to proceed there.

Takeaway

While this interpretation could be considered a stretch, to avoid disputes, parties should explicitly state whether a jurisdiction is exclusive or non-exclusive. Ambiguity often leads to prolonged litigation, defeating the efficiency such clauses aim to achieve.