Executive Summary: Key Legal and Evidentiary Issues

• Bombardier Inc. appealed a stay of its Ontario action, which sought repayment of an adjustment amount under a 2017 share purchase agreement.
   
• Alstom Rail Sweden AB argued the dispute fell within the arbitration clause of a separate 2020 share purchase agreement and should be resolved by the International Chamber of Commerce.
   
• Justice R. Lee Akazaki applied the four-part framework from Peace River Hydro Partners v. Petrowest Corp. in granting the stay of the Ontario action.
   
• Whether Alstom Sweden, though not a named party to the 2020 agreement, could invoke its arbitration clause as an "Affiliate" was a central evidentiary issue.
   
• Corporate separateness and the proper interpretation of the attornment and arbitration clauses across both agreements formed the core of Bombardier's grounds of appeal.
   
• A preliminary motion to quash the appeal turned on whether the stay order was final or merely interlocutory in nature.
   

Facts of the case

Bombardier Inc. ("BI") is a Canadian publicly traded corporation that designs, develops, manufactures, and markets transport equipment. In 2017, BI sold the entire share capital of its direct subsidiary, Bombardier Aerospace (Holdings) Sweden AB ("BAHS"), to its indirect subsidiary, Bombardier Transportation Sweden AB ("BT Sweden"), under a share purchase agreement (the "2017 BAHS SPA"). That agreement provided for a purchase price adjustment tied to a tax loss dispute for the years 2013 to 2017 pending before Swedish authorities, entitling BI to claim back 50% of the amount ultimately determined by the Swedish tax authorities. On September 16, 2020, Alstom S.A. and Alstom Holdings (collectively, "Alstom") entered into a separate sale and purchase agreement with BI and other parties (the "2020 Blizzard SPA") to purchase the entire share capital of Bombardier Transportation (Investment) UK Limited, including its subsidiaries, among them BT Sweden. Following completion of that sale in January 2021, BT Sweden was renamed Alstom Rail Sweden AB ("Alstom Sweden"). In 2021, the Swedish Administrative Court of Appeal ruled in favour of BAHS on the tax dispute, and BI sought payment of $24,462,275.64 from Alstom under the 2017 BAHS SPA's adjustment formula. When Alstom did not pay, BI commenced an action in the Ontario Superior Court of Justice against Alstom Sweden (the "Ontario Action"). Separately, in 2022, Alstom had already initiated arbitration against BI and Bombardier Transportation (Investment) UK Limited before the International Chamber of Commerce ("ICC") concerning aspects of the 2020 Blizzard SPA transaction (the "ICC Arbitration"), the details of which remain confidential under a sealing order. Alstom Sweden took the position that the subject matter of the Ontario Action properly belonged within the ICC Arbitration and moved to stay the Ontario Action accordingly.

Policy and legislative provisions at issue

Under arts. 5.1 and 5.2 of the 2017 BAHS SPA, the parties agreed that disputes would be governed by Ontario law and attorned to the Ontario courts (the "attornment clause"). The 2020 Blizzard SPA contained several relevant provisions: cl. 17.1 provided that tax sharing agreements between members of the "Blizzard Group" and certain affiliates would terminate as of the completion date, without prejudice to rights and obligations relating to pre-completion tax periods; cl. 21.1 was an entire agreement clause stating that the 2020 Blizzard SPA superseded prior agreements relating to the transaction's subject matter; and cl. 39.1 (the "arbitration clause") provided that disputes between "parties" would be finally settled through ICC arbitration under English law. The 2020 Blizzard SPA defined "Affiliate" broadly to include subsidiaries and holding companies, while "Parties" was defined tautologically as "the parties to this Agreement." Alstom Sweden's stay motion was brought under s. 9 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (the "ICAA"), which incorporates art. 8(1) of the UNCITRAL Model Law on International Commercial Arbitration, requiring a court to refer parties to arbitration where an action concerns a matter subject to an arbitration agreement, unless that agreement is null, inoperative, or incapable of being performed.

Reasoning and analysis

The motion judge found that Alstom Sweden had established an arguable case that the four "technical prerequisites" identified by the Supreme Court of Canada in Peace River Hydro Partners v. Petrowest Corp. were met, and that BI had not established a statutory exception to a mandatory stay. Although Alstom Sweden was not a named party to the 2020 Blizzard SPA, the motion judge considered the agreement's broad definition of "Affiliate" and found it arguable that Alstom Sweden fell within that definition and could benefit from the arbitration clause; he expressly noted that the absence of named-party status "would not be determinative." He further found it "more than arguable" that the 2020 Blizzard SPA governed the surviving relationship between BI and Alstom Sweden, incorporating the right to adjust for prior tax losses, and concluded it was "almost obvious" that the Ontario Action concerned a matter the parties had agreed to arbitrate. On appeal, the Court of Appeal for Ontario held that the motion judge's determination fell squarely within the first Peace River prerequisite—whether an arbitration agreement exists—and was properly assessed on an "arguable case" standard, consistent with this court's prior decision in Husky Food Importers & Distributors Ltd. v. J.H. Whittaker & Sons Limited. The court noted that at the stay stage, it is not for the court to make final determinations about the scope of an arbitration agreement or whether a litigant is a party to it, since those questions fall within the arbitral tribunal's jurisdiction. The court found the motion judge had adequately addressed BI's arguments regarding corporate separateness and contractual interpretation, even though he might have more explicitly analyzed the arbitration and attornment clauses, and that his findings were available on the record before him. Separately, in the earlier decision on the motion to quash the appeal, the Court of Appeal held that a stay order granted under s. 9 of the ICAA is generally final in nature for purposes of determining the correct appeal route, following Husky Food Importers, and that characterizations of the order as "interlocutory" made in costs submissions did not alter its legal character for that purpose.

Ruling and overall outcome

In the November 2025 decision, the Court of Appeal for Ontario dismissed Alstom Sweden's motion to quash Bombardier Inc.'s appeal, holding that the stay order was final and properly before the court; Bombardier Inc., as the responding party, was awarded costs of $25,000 inclusive of disbursements and HST. In the July 2026 decision on the merits, the Court of Appeal dismissed Bombardier Inc.'s appeal in its entirety, upholding the motion judge's stay of the Ontario Action in favour of arbitration before the ICC, with Alstom Rail Sweden AB awarded costs in the agreed-upon sum of $45,000, inclusive of HST and disbursements.