In Rogers v. TELUS Communications Inc., 2023 ONSC 5398, the Ontario Superior Court of Justice held that the terms of an expired arbitration decision are relevant when a party seeks injunctive relief that contradicts its terms.
The moving and responding parties are both prominent competitors in the Canadian telecommunications market. Under a requirement imposed by the Government of Canada, their customers have the reciprocal ability to “roam” on the other carrier’s network in areas where their own carrier does not provide coverage. This obligation allows Canadian customers to access wireless services across the country.
For a time, the parties did not agree on what was displayed to customers when they were roaming on a competitor’s network. The primary dispute was whether the network identifier (“NID”) displayed in the top-left corner of most mobile devices would connote an extension of their own carrier’s network (i.e. “[Carrier]-EXT”), or if it would notify customers that they were connected to another carrier’s network (i.e. “[Competitor]”). The parties originally sought a resolution for this dispute through arbitration in 2019. The decision in that arbitration required the parties to display other carriers’ NIDs when their customers were roaming on their respective networks. The parties were bound by this decision through the end of 2020.
Following the arbitration, the parties reached a agreement regarding NID displays that was effective through August of 2023 (the “NID Agreement”). Under the NID Agreement, the Parties would not have to display each other’s NIDs to their own roaming customers. The moving party submitted that this maintained the “status quo” in “industry practice and the parties’ own historical dealings with one another.”
Upon the expiry of the NID Agreement, the respondent required the moving party to display its network’s NID when users connected to it. The moving party sought an injunction to extend the term of the NID Agreement until such time as the parties could resolve the matter through another arbitration.
The Court began by setting out the “well settled” test that a party must satisfy to obtain a prohibitive injunction. The moving party must show that (paragraph 47):
- there is a serious issue to be tried;
- the moving party will suffer irreparable harm if the injunction is not granted; and
- the balance of convenience (i.e., the assessment as to which of the parties would suffer greater harm from the granting or refusing of the injunction pending a decision on the merits) favours granting the injunction.
The Court also noted that, when a party was seeking a mandatory injunction (as opposed to a prohibitive one), the first element of the above test is elevated from demonstrating a serious issue to be tried, to demonstrating a strong prima facie case, or a case that is almost certain to succeed (paragraph 50).
After finding that the injunction sought in this case was a mandatory one, the Court held that the moving party failed to establish a strong prima facie case that the parties should not be required to display the NIDs of other carriers to its roaming customers. In arriving at that decision, the Court cited the reasons issued in the parties’ 2019 arbitration. Those reasons were found to be relevant to the Court’s analysis, as the moving party put forth “the exact submission” on this motion.
Because of this, the Court found that the issue on the motion had already been tried in arbitration proceedings, and the moving party was therefore estopped from relitigating the matter in the proceeding before it. Interestingly, the Court found this was the case notwithstanding the fact that the arbitration decision was no longer of any legal effect. Indeed, the Court dismissed the motion for an injunction despite finding that the arbitration order did not apply “with respect to any period post-December 31, 2020.”
In the absence of evidence that industry practice had changed substantially since the 2019 arbitration to resemble the terms of the NID Agreement, the Court declined to impose new or extended contractual terms on the respondent for the interim period leading up to the parties’ arbitration.
Parties seeking a mandatory injunction should be therefore be mindful of the risks associated with seeking relief that contradicts previous adjudicative decisions that were binding on the parties.
The lawyers at Gilbertson Davis LLP have experience with commercial disputes, injunctive relief and arbitration (as both counsel and arbitrators). Please contact us for an initial consultation.
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