Executive Summary: Key Legal and Evidentiary Issues

• Peterson sought declarations invalidating an arbitration commenced by Leishman, arguing the arbitration agreement ceased to exist after the parties terminated their Associate Agreement.
   
• Section 47 of the Arbitration Act permitted Peterson to bring the challenge before the court because it had not participated in the arbitration proceedings.
   
• The competence-competence principle ordinarily assigns jurisdictional questions to the arbitrator first, though an exception exists for disputes turning on pure legal interpretation.
   
• Justice Jugnauth elected to determine the jurisdictional issue directly, citing the uncontested factual record and the efficiency goals of the Alberta Rules of Court.
   
• Clause 1.2 of the Associate Agreement extended arbitration to disputes concerning the breach, termination, or invalidity of the agreement itself.
   
• Ultimately, the court found the arbitration agreement survived termination, given the parties' preservation of post-termination covenants and the ADRIC Rules' independence provision.
   

Facts of the case

Fraser N. Peterson Professional Corporation ("Peterson") and Mark W.M. Leishman Professional Corporation ("Leishman") entered into an Associate Agreement on August 17, 2018, governing the provision of dental services by Peterson at Leishman's dental practice in Pincher Creek, Alberta. The Associate Agreement contained a dispute resolution clause requiring disputes arising out of or relating to the agreement—including its breach, termination, or invalidity—to be resolved by arbitration under the rules of the ADR Institute of Canada ("ADRIC"). After Peterson delivered a notice of termination, the parties entered into a Termination Agreement effective November 30, 2021. Under that agreement, Peterson remained bound following termination by covenants relating to insurance, confidentiality, non-solicitation, and non-competition. In September 2023, Leishman served a Notice of Request to Arbitrate alleging breaches of restrictive covenants and other obligations arising under the Associate Agreement. Peterson did not participate in the arbitration, maintaining throughout that no valid arbitration agreement existed following termination. An arbitrator was appointed through the ADRIC process. On November 18, 2025, Justice Magnan declined to grant interim injunctive relief and directed the matter to a Special Chambers hearing. According to Leishman's materials, the arbitrator issued a written jurisdictional ruling on December 30, 2025 addressing the validity of the arbitration agreement, the arbitrator's appointment, and jurisdiction over the dispute; Justice Jugnauth noted that his decision did not depend on the existence or correctness of that ruling.

Policy and legislative provisions at issue

Clause 1.2 of the Associate Agreement, titled the Arbitration Agreement, provided that any dispute, controversy, or claim arising out of or relating to the agreement, "or the breach, termination or invalidity thereof," would be settled by arbitration under ADRIC rules. Clause 5 of the Associate Agreement obliged Peterson to remain bound after termination by the insurance, confidentiality, non-solicitation, and non-competition covenants. Clause 6.3, titled "Effect of Termination," stated that upon termination the parties' obligations would cease and determine except for a list of enumerated exceptions, which did not include the arbitration clause. Rule 4.9.1 of the ADRIC Rules, incorporated into the Arbitration Agreement, provides that a tribunal may rule on its own jurisdiction, that an arbitration clause forming part of a contract must be treated as independent of the contract's other terms, and that a finding that the underlying contract is null and void does not automatically invalidate the arbitration clause. Sections 17(1) and 17(3) of the Arbitration Act, RSA 2000, c A-43, codify the competence-competence and separability doctrines, with section 17(3) directing that an arbitration agreement be treated as an independent agreement capable of surviving separately from the contract containing it. Section 47 of the Act permits a court to grant relief to a party that has not participated in the arbitration. Rule 1.2 of the Alberta Rules of Court, Alta Reg 124/2010, promotes the fair, timely, and cost-effective resolution of claims.

Reasoning and analysis

Justice Jugnauth first found that Peterson had not participated in the arbitration within the meaning of section 47, distinguishing Peterson's conduct from the participating party in Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2023 ABCA 343, since Peterson took no steps in the appointment of the arbitrator or the arbitral process. This entitled Peterson to invoke section 47. Turning to whether the court should itself decide the jurisdictional challenge, the court applied the competence-competence principle described in Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41, which favours arbitrators ruling first on their own jurisdiction, subject to an exception for disputes involving pure questions of law or mixed questions requiring only superficial review of the evidentiary record. Although the court accepted there was force to Peterson's submission that the exception applied, it treated the exception as permissive rather than mandatory. The court nonetheless concluded that it should decide the issue itself, given the uncontested factual record, the comprehensive submissions already advanced, and the goal under rule 1.2 of avoiding further delay, expense, and duplication before the arbitrator or an appellate court. On the merits, the court rejected Peterson's argument that the arbitration clause's absence from the enumerated survival exceptions in clause 6.3 was determinative. Reading the Associate Agreement, the Termination Agreement, and the ADRIC Rules together, the court found that the arbitration clause's broad language, the parties' express preservation of covenants surviving termination, and Rule 4.9.1's requirement that arbitration clauses be treated as independent of the underlying contract all supported the conclusion that the arbitration agreement survived termination.

Ruling and overall outcome

Justice Jugnauth concluded that the Arbitration Agreement survived the termination of the Associate Agreement and remains capable of governing disputes over the parties' surviving contractual obligations, without prejudice to other positions Peterson may raise before the arbitrator. The declarations sought by Peterson, including that the arbitration agreement was invalid and that the arbitrator lacked jurisdiction, were refused, and Leishman was the successful party on the application. The application for injunctive relief prohibiting continuation of the arbitration was dismissed. Costs were ordered to be in the cause, as the merits of the parties' underlying dispute had not yet been adjudicated; no specific monetary amount was awarded or determined in this decision.