Alberta Court of Appeal Determines Tort-Feasors Act Claim Falls Under Arbitration Agreement

On February 20, 2026, the Alberta Court of Appeal released its decision in Arsopi v. ARVOS GmbH, 2026 ABCA 49. The case deals with whether a defendant in a tort action can rely on Alberta's Tort-Feasors Act (TFA) to avoid being bound by an arbitration agreement. The Court of Appeal determined that a claim for contribution under the TFA did not override the arbitration agreement because that claim belonged to the defendant, which brought the claim within the ambit of the arbitration agreement. The decision is significant because it clarifies that arbitration agreements can encompass statutory claims like those under the TFA, and other extra-jurisdictional claims that may not have been specifically contemplated by the parties. 

Background

The plaintiff Orica Australia Pty. Ltd. (Orica), engaged the defendant ARVOS to design and manufacture a waste heat exchanger and superheater (Exchanger) that was to be installed at an ammonium nitrate plant in Alberta. In turn, ARVOS subcontracted with the third-party defendants (collectively, Arsopi) to manufacture the Exchanger. The subcontract between ARVOS and Arsopi incorporated ARVOS' general purchasing terms and condition, stipulating that the subcontract was governed by German law and that all disputes had to be arbitrated in Germany. Further, the subcontract stated "[a]ll disputes arising out of or in connection with the Contract shall be finally settled" via arbitration.

The plant allegedly had to be shut down due to issues with the Exchanger. Orica filed a statement of claim against ARVOS for the defects attributable to ARVOS' negligence. In turn, ARVOS filed a statement of defence denying liability and a third-party claim against Arsopi seeking contribution under the TFA. Arsopi sought to stay or strike the third-party claim, arguing that it was subject to arbitration under the subcontract's terms.

Chambers Justice refused to stay Tort-Feasors Act claim

The main issue before the Chambers Justice was whether the third-party claim filed in Alberta should be stayed in favour of arbitration in Germany pursuant to the International Commercial Arbitration Act. Additionally, the following portion of the TFA was at issue:

            3(1) When damage is suffered by any person as a result of a tort, whether a crime or not,

            […]

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is or would, if sued, have been liable in respect of the same damage, whether as a joint tort-feasor or otherwise, but no person is entitled to recover contribution under this section from any person entitled to be indemnified by the person first mentioned in respect of the liability regarding which the contribution is sought.

The Chambers Justice stayed the tort and contract claims in the third-party claim, but refused to stay the TFA claim. The Chambers Justice reasoned that because it was a statutory claim arising under Canadian law, it was not covered by the arbitration clause. Specifically, the Chambers Justice noted that Orica was not a party to the arbitration agreement between ARVOS and Arsopi, and that the TFA claim was based on a statutory right of contribution. Thus, the Chambers Justice concluded the claim was outside the scope of the arbitration clause.

Court of Appeal determines that the arbitration clause applies to Tort-Feasors Act claim 

The Court of Appeal found that the Chambers Justice erred in characterizing the TFA claim as being between Orica and Arsopi, rather than between ARVOS and Arsopi. The Court emphasized that a TFA claim is a substantive right belonging to a defendant tortfeasor. In this case, that meant the right belonged to ARVOS, bringing the claim within the scope of the arbitration clause. 

Importantly, the Court highlighted the wording of the arbitration clause which was similar to the prior Court of Appeal case of Kaverit. In Kaverit, the Court reasoned that the language "any dispute arising out of or in connection with this Agreement" included claims related to the contract, even if they are not strictly contractual. Therefore, the TFA claim was connected to the subcontract because the existence of the subcontract was germane to the claim and the defence against it.

The Court followed the Supreme Court of Canada's guidance that parties should be held to their contractual agreements to arbitrate. The Court held that the broad language of the arbitration clause indicated an intention to include disputes related to the subcontract. The Court ultimately decided to stay the TFA claim pursuant to the arbitration clause.

Takeaways

The Court of Appeal's decision reaffirms that arbitration clauses may be interpreted broadly, depending on the language of the clause. The decision also clarifies that arbitration agreements can encompass statutory claims for contribution like those under the TFA, provided that they are connected to the contractual relationship. This underscores the importance of carefully drafting arbitration clauses to ensure that they cover all potential disputes arising from a contract. The Court of Appeal makes it clear that international parties should be held to their contractual agreements to arbitrate, and that such clauses should not be invalidated by the legal procedures of the particular jurisdiction where a claim is brought. 

BD&P Partners Trevor McDonald and Robert Martz were counsel for Arsopi in this successful appeal. BD&P's deep bench of arbitration and litigation counsel is available to help with all aspects of managing your disputes.