Executive Summary: Key Legal and Evidentiary Issues

• Dispute over chargebacks and alleged unauthorized debits under a merchant services contract for credit card transactions.

• Interpretation and application of a mandatory arbitration clause in a commercial agreement.

• Determination of whether small claims court retains jurisdiction in light of a binding arbitration provision.

• Analysis of whether procedural protections under Quebec civil law support suspending proceedings rather than dismissing them.

• Consideration of whether separate related transactions fall under the same arbitration clause.

• Examination of whether the arbitration clause was properly incorporated and accepted in the signed agreement.

Facts and outcome of the case

Réno-Équilibre inc., a merchant business, entered into a merchant services agreement with Nuvei Technologies Corp. in January 2021 to process credit and debit card transactions for its clients. As part of this agreement, the company also leased a payment terminal from Nuvei. The contract—called the “Convention du Marchand”—included a detailed set of terms, including a clause requiring disputes to be resolved through private arbitration.

In 2023, Réno-Équilibre was subject to chargebacks initiated by two different cardholders, resulting in several disputed amounts being debited from its business account by Nuvei. The company filed two small claims court cases seeking repayment—$15,000 in one case and $4,770 in the other. The claims were based on allegations that Nuvei processed the chargebacks without proper justification and that Réno-Équilibre had complied with its obligations under the merchant agreement.

Nuvei responded by filing a motion to refer the dispute to arbitration, citing the arbitration clause in the merchant agreement’s terms and conditions. This clause clearly stated that any disputes arising from the contract would be resolved by private arbitration in Quebec, excluding the jurisdiction of the courts.

The court noted that the merchant agreement signed by Réno-Équilibre included express acknowledgment that the terms and conditions were incorporated into the contract. These terms were publicly accessible via a web link and included a detailed arbitration clause under section 5.16. The court held that by signing the agreement, Réno-Équilibre accepted these terms, including the obligation to resolve disputes through arbitration.

Réno-Équilibre argued that the chargebacks were unauthorized and that the arbitration clause should not apply to fraudulent or unilateral actions. However, the court disagreed, finding that the dispute fell within the scope of the arbitration clause. It also rejected the argument that a separate clause in a related leasing agreement allowing litigation should override the arbitration provision, noting that the claims arose from the merchant agreement, not the leasing contract.

Rather than dismissing the claims outright, the court chose to suspend both small claims proceedings in accordance with Quebec Court of Appeal precedent. This approach preserves the plaintiff's right to return to court if the arbitrator ultimately declines jurisdiction. The court ordered both parties to proceed with arbitration and required them to notify the court registry of the arbitration’s start date and final decision.

The outcome was a procedural victory for Nuvei, as the court enforced the arbitration clause and removed the case from the court’s jurisdiction, pending the results of the arbitral process.