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Full Case Name: Adlakha v. Meehan (2011)
This court decision is among the few Ontario court decisions relating to the enforceability of an arbitration requirement in a franchise agreement. It is the first decision holding that a franchisor’s affiliates, which are not parties to the franchise agreement, may be required to submit to arbitration together with the franchisor – even though they are technically not direct parties to the arbitration agreement.
The franchise agreement contained an arbitration provision, requiring the parties to submit all disputes between them to arbitration.
The franchisees sued not only the franchisor, Lick’s Burger, but also its numerous affiliated entities – none of whom was a party to the franchise agreement. The affiliates took the position that they were not required to submit to arbitration because they were not parties to the franchise agreement, and therefore the arbitration agreement.
The Ontario Superior Court (Commercial List) held that all entities which were alleged to be franchisor’s affiliates were required to submit to arbitration along with the franchisor. There were two main reasons: First, the wording in the franchise agreement consistently referred to the term ‘franchisor’s affiliates’ in association with the term ‘franchisor’. Second, Ontario’s Arbitration Act, 1991, gives an arbitrator broad powers to determine such issues.Back
By: Anthony Pugh, Law Works Editor: Ben Hanuka, Law Works In 2483038 Ontario Inc. v. 2082100 Ontario Inc. Read More
This article was originally published in The Lawyer’s Daily on May 14, 2020, under the same title. Read More
We are pleased to introduce Franchise Issue in Focus, a monthly edition of our Franchise Law Newsletter. Read More
Released today, the May edition of our Franchise Law Newsletter examines two recent court decisions. Read More