The British Columbia Court of Appeal granted a construction contractor permission to appeal an arbitrator’s dismissal of a claim exceeding $2 million as time-barred. The contractor had filed a lawsuit one day before an 18-month contractual deadline but did not start arbitration until after that deadline.
The appeal raises an unresolved question: can the Arbitration Act preserve a claim subject to a contractual arbitration deadline when proceedings were first commenced in court? The Court granted leave; it did not decide that the claim was timely.
A Court Filing Preceded a Late Arbitration
In Marwest Industries Ltd. v. British Columbia (Minister of Transportation and Infrastructure), 2026 BCCA 398, Marwest contracted with the Province to improve Kootenay Lake ferry terminals. The agreement required claims to begin within 18 months of actual completion. Completion occurred on February 17, 2023, making August 17, 2024, the deadline.
On August 16, 2024, Marwest notified the Ministry that it intended to arbitrate and filed a civil claim alleging breach of contract. It did not formally commence arbitration until October 10, 2024.
Marwest unsuccessfully sought an extension under section 10 of the Arbitration Act. Its court proceeding was later stayed by consent so the dispute could proceed in arbitration.
Marwest then invoked section 12, which can suspend a limitation period where a court claim is stayed under section 7 and the same claim is commenced in arbitration within 30 days after the stay. The arbitrator interpreted that provision as applying only to statutory limitation periods, not the parties’ contractual deadline, and dismissed the claim.
The Meaning of Section 12 Remains Unsettled
The proposed appeal concerns the phrase “limitation period applicable to the claim.” The arbitrator relied on other provisions of the Arbitration Act distinguishing statutory periods from contractual deadlines and providing a separate route to extend certain contractual time limits for undue hardship.
Marwest argued that section 12 should also protect claims governed by contractual limitation periods. The Court of Appeal found this a genuine, sufficiently arguable question of law with implications beyond the particular construction contract. It also recognized that the Ministry’s opposing interpretation had some merit.
The Court further held that Marwest’s leave application was timely. A properly completed Form 1 Notice of Appeal filed and served within 30 days, identifying the required leave and proposed grounds, was sufficient to commence the application. The later Form 4 and application materials were procedural steps to advance it, although new grounds cannot necessarily be added after the deadline.
What Contractors and Owners Should Understand
A notice of intention to arbitrate and a court filing are not necessarily substitutes for formally commencing arbitration under the contract. Parties should identify both the required procedure and the contractual deadline before a dispute matures.
Relief from an expired contractual deadline may be available under section 10, but undue hardship must be established with evidence and the application brought without undue delay.
For now, the arbitrator’s dismissal was not overturned. Until the substantive appeal resolves section 12’s reach, parties should not rely on a timely court action alone to preserve a claim that the agreement requires to be arbitrated.
