Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on allegations of copyright and trademark infringement involving Farsi-language television content.

• Licensing agreement between parties contained a Bermuda arbitration clause, triggering jurisdictional challenges.

• Appellant argued it was not bound by the agreement due to its incorporation after the contract's execution.

• Courts examined whether arbitration should proceed despite the appellant’s assertion that the agreement was terminated.

• Application of Supreme Court precedent (Dell, Uber, and Peace River) guided whether arbitration must be prioritized.

• Federal Court of Appeal dismissed the appeal and affirmed arbitration in Bermuda as the proper forum.

Facts and outcome of the case

The appellant, General Entertainment and Music Inc. (GEM), brought a Federal Court action against Gold Line Telemanagement Inc. and related parties alleging copyright and trademark infringement. GEM operates Farsi-language television channels and claimed ownership over content that had been broadcast or used without authorization. The respondents include Gold Line, its subsidiaries GLWiZ Inc. and Ava Telecom Ltd., and several individuals allegedly involved in the streaming of GEM's protected material.

Central to the dispute was a 2013 Content Acquisition and Licensing Agreement signed between Ava Telecom and “General Entertainment and Media” (later associated with GEM or its predecessors), which included an arbitration clause requiring that any disputes be resolved in Bermuda under Bermudian law. The respondents claimed that GEM was bound by this agreement and that the case should not proceed in Canadian courts. GEM, in contrast, argued that it was not party to the agreement (having been incorporated later), that the agreement had been terminated, and that the Federal Court was the appropriate venue for the infringement claims.

In response to GEM’s court action, Gold Line requested a stay of proceedings in favor of arbitration. The Federal Court initially denied the stay, finding that GEM was not bound by the agreement and that the Licensing Agreement had been terminated. However, on appeal, the Federal Court overturned that decision, emphasizing that questions about the validity and applicability of arbitration clauses—especially where they involve mixed questions of fact and law—should be referred to an arbitrator under principles established in Dell Computer Corp. v. Union des consommateurs and Uber Technologies Inc. v. Heller.

GEM then appealed this ruling to the Federal Court of Appeal. The appellate court upheld the Federal Court’s decision, agreeing that under Canadian law and the New York Convention, disputes subject to an arbitration agreement must be referred to arbitration unless the agreement is shown to be null, void, or inoperative. The court concluded that the issues GEM raised could not be resolved without a deeper factual analysis and should therefore be handled by the arbitrator, not the court. It also found that the respondents had not waived their right to arbitration by participating in preliminary court processes.

As a result, the Federal Court of Appeal dismissed GEM’s appeal. Costs were awarded to the respondents, although no specific monetary damages were granted at this stage, as the core infringement claims remain subject to resolution through arbitration in Bermuda.