Forum selection clause does not grant exclusive jurisdiction to Alberta courts: BC Court of Appeal

The British Columbia Court of Appeal has ruled that a forum selection clause in a property purchase agreement does not grant exclusive jurisdiction to Alberta courts.

The dispute in Yegre EB Ltd. v. Seguin, 2024 BCCA 365 stemmed from a 2015 agreement under which the appellant purchased five industrial properties from the respondents, two in BC and three in Ontario.

In 2022, the appellant filed a civil claim in the BC Supreme Court of British Columbia alleging that the respondents made fraudulent misrepresentations about the condition of the properties, including claims regarding freezer and cooler space in a Delta, BC property. The appellant sought damages for breach of contract, fraud, conspiracy, and negligence.

The respondents argued that the agreement’s forum selection clause granted Alberta courts exclusive jurisdiction, applying for a stay of proceedings in BC. The clause stated that the parties "submit to the jurisdiction of the Alberta courts for all purposes arising in connection with this Agreement." The chambers judge agreed with the respondents, interpreting the clause as granting exclusive jurisdiction to Alberta and rejecting arguments that fraud rendered the clause unenforceable.

On appeal, the BC Court of Appeal found the clause ambiguous, as it could reasonably support both exclusive and non-exclusive interpretations. The court emphasized that clear and express language is required to confer exclusive jurisdiction and concluded that the clause did not meet this standard. Instead, it interpreted the clause as granting non-exclusive jurisdiction to Alberta courts.

The court further addressed whether BC or Alberta was the more appropriate forum. Applying the factors under BC’s Court Jurisdiction and Proceedings Transfer Act, the court determined that BC was clearly the more appropriate venue. Key factors included the location of the disputed property and most witnesses in BC, the absence of concurrent proceedings, and the neutrality of the forum selection clause in the forum non conveniens analysis.

The Court of Appeal dismissed the stay application, allowing the appellant to proceed with its claims in BC, and highlighted the importance of clear drafting in forum selection clauses to avoid ambiguity.