Issue: Arbitration versus litigation for warranty and negligence claims in an oil sands project contract.

Key Points

1. Background:

   • Husky Oil retained a contractor (Saipem Canada) for steam-assisted gravity drainage equipment.
   • Saipem contracted with Technip for manufacturing 10 steam generator modules.
   • The contract extended warranties to Husky but included a dispute resolution clause requiring arbitration.
   • Husky alleged defects in the modules and pursued warranty claims in court, not arbitration.

2. Lower Court Decisions:

   • Applications Judge (2022): Ruled Husky was not bound to arbitration due to lack of explicit language in the contract.
   • Chambers Judge (2023): Overturned, concluding Husky implicitly accepted arbitration by invoking warranty rights.

3. Appeal and Cross-Appeal:

   • Husky appealed the chambers judge's interpretation binding it to arbitration.
   • Technip cross-appealed, arguing Husky’s negligence claims should also be subject to arbitration.

4. Key Legal Issues:

   • Can non-parties to a contract be compelled to arbitrate disputes?
   • Does invoking warranty rights bind a non-party to arbitration terms?

5. Appeal Court Decision:

   • Appeal Allowed: Arbitration clauses must be clear and explicit to bind non-parties.
   • Cross-Appeal Dismissed: Ambiguous contract language cannot impose arbitration obligations on Husky.
   • The court emphasized the importance of mutual consent in arbitration, rejecting an implied arbitration obligation without explicit agreement.

Conclusion: Husky Oil is entitled to pursue warranty claims in court, and the negligence claims are not subject to mandatory arbitration. No monetary award specifed.