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Citation: Husky Oil Operations Limited v Saipem Canada Inc, 2017 ABQB 489
Date: 20170803
Applicant/Respondent
- and -
Respondent/Applicant
Applicant/Respondent
- and -
Sunrise Oil Sands Partnership, BP Canada Energy Group ULC, Husky Oil Sands
Partnership, HOI Resources Limited and Husky Oil Operations Limited
Respondents/Cross Applicants
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I. Introduction
[1] The Applicant, Saipem Canada Inc. (“Saipem”), and the Respondent, Husky Oil
Operations Limited (“Husky”), entered into a contract on November 15, 2010 (the “Contract”)
pursuant to which Saipem was to provide engineering, procurement and construction for the
central processing facilities of what was called the “Sunrise Project”.
8.1 Husky shall have the right at any time to issue instructions to the
Contractor to do and the Contractor shall do any of the following:
8.1.1 make any revision to the Work, which may include additions,
deletions, substitutions and changes in quality, form, character,
kind, position, dimension, level or line and changes in any method
of construction specified by Husky;
5(3) For the purpose of removing any doubt, but not so as to restrict the
generality of subsections (1) and (2), it is declared that the Court has the like
jurisdiction and powers that by the laws of England were, on July 15, 1870,
possessed and exercised by the Court of Chancery in England in respect of [...]
(f) preventing the multiplicity of actions, [...]
IV. Issues
[10] Perhaps not surprisingly, Saipem and Husky articulate the issues on this application
somewhat differently. In its initial brief, Saipem set forth the issues as follows:
46. The determination of both the Saipem Application and the Husky
Application raise the following issues:
(i) Is the Arbitration valid?
(a) Is the Arbitration Agreement invalid or has
it ceased to exist as a result of Husky’s repudiation
of the Arbitration Agreement and attornment to the
jurisdiction of the court?
(b) Are the Purported Changes beyond the
scope of the Arbitration Agreement?
(ii) Regardless of whether the Purported Changes fall within
the scope of matters to be arbitrated, whether the Arbitration
should be stayed pursuant [to] s. 6(c) of the Arbitration Act (as a
result of the unfair and unequal treatment of Saipem should the
Arbitration continue), the Judicature Act and the inherent
jurisdiction of the Court OR whether a partial stay of the Saipem
Action should be refused under s. 7 of the Act and Rule 3.68
(which will be addressed in Saipem’s Reply Brief)?
(iii) Has the limitation period expired with respect to some of
the Purported Changes?
[11] For its part, Husky frames the issues as follows in its brief:
Page: 6
V. Analysis
[14] As alluded to above, before the issues raised by Saipem can be addressed, I must consider
whether this Court has the authority to do so or must refer those issues to arbitration.
1. Has the Arbitration Agreement become invalid because Husky repudiated the
Contract?
[20] Saipem argues that the Arbitration Agreement has become invalid or ceased to exist as a
result of Husky’s repudiation of the Contract. It cites a number of cases in which the courts have
found repudiation of an arbitration agreement.
whether the parties have, by their conduct repudiated the agreement and attorned
to the jurisdiction of the court.
[26] Saipem asserts that Husky has attorned to the jurisdiction of this Court through various
actions, including failing to raise the issue of arbitration or to object to litigation, accepting
service of the Saipem Action and asking that no steps be taken therein without notice, endorsing
a Consent Order in the Saipem Action and asking for an extension of time to file a defence to the
commenced on September 14, 2015. It asserts that determination of the limitation period is a
threshold issue that must be decided by the Court rather than the arbitrator and cites Suncor
Energy Products Inc v Howe-Baker Engineers Ltd, 2010 ABQB 310, 492 AR 288 at para 18:
...the application [to determine the limitation issue] is not a question regarding the
jurisdiction of an arbitrator, but rather a question of whether there is an arbitration
within which the arbitrator may or may not exercise a jurisdiction.
(iv) given that the issues are identical and overlapping there is a real risk of
inconsistent findings and certainty of duplicative and increased cost and
increased costs. The filing of the Arbitration has already resulted in
increased costs and delay in the Actions;
(v) all of the parties in the Actions are not subject to the Arbitration and issues
decided in the Arbitration would have to be re-litigated in the Actions with
I will first consider section 7(5). With the greatest of respect to those who have
interpreted section 7(5) in a different fashion, I am of the view that the plain
language of this section is limited to providing the Court with the discretion to
grant a partial stay of a proceeding in the circumstances prescribed in the section,
that is, where an arbitration agreement deals with only some matters in the dispute
in the proceeding and it is reasonable to separate the matters dealt with in the
[45] I am not satisfied that there is manifest unfairness in the fact that there are parties to the
Saipem Action who are not parties to the Arbitration. It seems to me that this, too, is inherent in
the agreement to send specified disputes to arbitration while others remain to be litigated. If the
Disputed Changes are within the arbitrator’s jurisdiction, which question is to be determined by
the arbitrator, Saipem must be held to its bargain.
6. Should a stay of all or part of the Saipem Action be granted?
VI. Conclusion
[47] In the result, both Saipem’s application for a stay of the Arbitration and Husky’s cross-
application for a stay of the Saipem Action are dismissed.
[48] As Husky has been successful on this application, it shall have its costs on column 5.
K.M. Horner
J.C.Q.B.A.
Appearances: