Lessons from Uber v Heller: the case for UNCITRAL Model Law on International Commercial Arbitration Reform

  • October 05, 2021

Introduction

Consider your ability to enter binding contractual agreements with huge multinational corporations at the touch of your smartphone screen. Can you honestly say that you have read all the terms and conditions before clicking “I agree” to use popular apps like Uber or Airbnb? Do you have a complete comprehension of which rights you have surrendered? If you fall within the majority, your answer is likely “no”.1

Luckily, for most, the stakes are relatively low when it comes to these types of adhesion contracts (clickwrap). However, for an increasing number of Canadians, clickwrap regulates their livelihood.2 Workers in the gig economy typically enter online contracts of adhesion that govern their relationship with the companies for whom they provide services, and often include clauses requiring any future disputes to be resolved through international commercial arbitration (ICA).3 Should these ICA clauses be enforceable?

The Supreme Court of Canada’s (SCC) recent decision in Uber v Heller4 addresses this question. Heller demonstrates a shift in Canadian jurisprudence away from enforcing ICA clauses in gig work contracts. In this paper, I argue that the current lack of clarity regarding enforcement of future ICA clauses requires UNCITRAL Model Law on International Commercial Arbitration5 reform, to uphold the governing principles of ICA and restore clarity to this growing area of the law. Specifically, the text of the Model Law should expressly exclude the type of adhesion contracts contemplated in Heller from the scope of ICA.

This paper will discuss the need for Model Law reform in five parts. Part I will provide an overview of ICA and its associated international law instruments: the NY Convention 6 and the Model Law. Part II will review the current state of Canadian jurisprudence regarding ICA, focusing on the Heller decision. Part III will engage with the unique nature of contractual relationships in the gig economy and the resulting difficulty of using ICA to resolve the disputes that arise from them. Part IV develops my central thesis – that the current lack of clarity regarding the contractual relationships discussed in this paper requires reform to the Model Law. Part V explores how Model Law reform can create clarity regarding the use of ICA in the gig economy.

I. International Commercial Arbitration (ICA)

Resolution of business disputes traditionally takes one of three forms: mediation, arbitration or litigation. This section will introduce arbitration as a method of dispute resolution and will discuss the framework for ICA in Canada, which is largely based upon the NY Convention and Model Law.

Arbitration is a private system of dispute resolution associated with a lower cost relative to litigation.7 It gives parties to a dispute a final, binding, and confidential decision which can be enforced in a national court.8 Parties to arbitration usually choose specific features of the arbitration process including procedures, location and the arbitrators who will hear the dispute.9 Arbitrators have broad discretion to decide on their own jurisdiction. If a party to arbitration challenges jurisdiction, arbitrators decide if they can hear the dispute. 10 This concept is referred to as competence-competence, and it is a fundamental principle of arbitration. 11

Critics of arbitration argue that confidentiality avoids public scrutiny and the creation of precedent in arbitration, which undermines the rule of law.12 Another common critique of arbitration is that powerful actors control the arbitral process, and it is unfair for them to “craft a dispute resolution system that is best for them but not necessarily their opponents or the public at large.”13 Despite these criticisms, ICA has become the norm for dispute resolution in international business transactions.14

The use of ICA as opposed to domestic arbitration depends on the definition of the terms “international” and “commercial”. If the parties to a dispute have their places of business in a State that has adopted the Model Law and/or is a signatory to the NY Convention, the definitions in those documents will apply as follows.

a. The NY Convention

Some consider the NY Convention to be the “most successful private international law treaty of the twentieth century”, as over 130 countries have become contracting States.15 The NY Convention places obligations on States regarding arbitration agreements and enforcement of arbitration awards. It was adopted by the UN in 1958 and Canada acceded to the NY Convention in 1986.16 Reservations to the treaty are allowed in two areas: reciprocity and commercial application.17 Canada made the commercial reservation, meaning that the NY Convention only applies to commercial legal relationships in Canada.18

Article 2 of the NY Convention contains the requirements of arbitration agreements, which are largely formal. 19 However, an important substantive requirement is that national courts shall refer parties of a dispute governed by an arbitration clause to arbitration unless the agreement is void, inoperative, or incapable of being performed.20 Further, an arbitration agreement can only concern arbitrable matter.21

b. UNCITRAL Model Law

Adopted in 1985 and amended in 1996, the Model Law was drafted by the UN Working Group on International Contract Practices as a model of arbitration legislation.22 Since its creation, legislation based on the Model Law has been adopted in 84 States.23 Most Canadian provinces and territories adopted the Model Law in 1986.24

The underlying goals of the Model Law were to create uniformity and modernize ICA globally, with several guiding principles, including: 1) party autonomy; 2) consistency with NY Convention and UNCITRAL rules; 3) broad definitions of “commercial” and “international”; 4) limited court intervention; and 5) broad arbitrator authority.25 While the Model Law is not binding, it serves as an international template for ICA.

Under article 1 of the Model Law, the term “international” applies to arbitration in three situations, as follows:

  1. the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or
  2. one of the following places is situated outside the State in which the parties have their places of business:
    • any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or
    • any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or
  3. the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

Alternatively, the Model Law does not define “commercial. It only includes an explanatory footnote to aid interpretation of the term “commercial”: 26

The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.27

c. ICA Clauses

Consent is a defining characteristic of arbitration, as the parties to a transaction must agree to ICA for the resolution of any future disputes.28 This is typically accomplished through the inclusion of an arbitration clause in the commercial contract between the parties.29 Despite their inclusion within larger contracts, ICA clauses are considered severable, or as separate agreements.30 This concept is referred to as separability and is a foundation of modern arbitration.31

The validity of an arbitration clause is crucial because arbitration clauses effectively relinquish parties’ rights to litigation for future disputes.32 If an ICA clause is found to be invalid, another method of dispute resolution may be used, like litigation.33 Validity of an ICA clause is two-fold: formal and substantive.34 Formal validity requires the ICA clause to be in writing and signed by the parties. Substantive validity refers to the arbitrability of the subject matter, legal requirements of article 2 of the New York Convention,35 and considerations of broad contractual validity including the need for a defined legal relationship and unconscionability.36

d. Core Principles of ICA

Three core principles of ICA emerge from The Model Law, NY Convention and the features of arbitration. First, contracting parties are given many choices regarding the particulars of arbitration, emphasizing freedom of contract as a foundation of ICA. However, the power imbalance between parties to arbitration may create an uneven ground for arbitration to take place. Second, the emphasis on party consent to the selected terms of arbitration highlights the importance of party autonomy in ICA.37 As parties to ICA are relinquishing important legal rights, they must fully understand and consent to this process of dispute resolution. Third, competence-competence and separability indicate the priority of avoiding judicial interference in the sphere of arbitration and more specifically, ICA.38 Indeed, for ICA to function as a legitimate form of dispute resolution, its separation from judicial processes must be respected.

II. The Current State of Canadian Jurisprudence Regarding ICA

In Canada, domestic arbitration as a valid form of dispute resolution predates ICA.39 Consequently, Canadian jurisprudence regarding domestic arbitration is more developed.40 Therefore, this section discusses attitudes in Canadian jurisprudence towards arbitration generally, with a focus on ICA.

a) The Changing Tide

Canadian courts have shifted from an attitude of hostility regarding arbitration towards acceptance, and even deference.41 The previous tendency for Canadian courts to avoid enforcing arbitration agreements that excluded Canadian court jurisdiction is seen in National Gypsum Co. v. Northern Sales Ltd.42 In that case, the Applicants applied for judicial resolution of a contractual dispute, despite a pre-existing arbitration agreement. The SCC granted the application, holding that the arbitration agreement was unenforceable on public policy grounds.43 Similarly, in Seidel v TELUS Communications Inc,44 a mandatory arbitration clause in a consumer contract was found to have limited application.45

The gradual judicial recognition of arbitration as a legitimate means of dispute resolution culminated in Desputeaux v Éditions Chouette (1987) inc.,46 where the Court noted that “the trend in the case law and legislation, … has been, for several decades, to accept and even encourage the use of civil and commercial arbitration, particularly in modern western legal systems”.47 Accepting that trend, the SCC relied upon domestic arbitration legislation to uphold the validity of an arbitration award.

Soon after Desputeaux, the SCC affirmed ICA as a legitimate system of private justice in GreCon Dimter inc. v J. R. Normand inc.48 The SCC then clarified that arbitrators are to resolve challenges to their jurisdiction in Dell v Union des consommateurs, thus affirming the competence-competence principle in Canadian law.49 In Dell, the Court provided that only in exceptional cases where the challenge to an arbitrator’s jurisdiction is based on a question of law or mixed fact and law, should courts intervene.50

b) The Heller Decision

Heller raises important questions about the enforcement of ICA clauses in Canadian courts, especially concerning contracts in the gig economy. In Heller, the majority found that Uber’s arbitration clause was not enforceable. Brown J delivered a concurring decision on grounds of public policy and CĂ´tĂ© J dissented. In this section, only the majority and dissenting opinions will be discussed.

i. Background

The Respondent, Mr. Heller, was a driver for Uber Eats, a food delivery service belonging to Uber Technologies Inc. (Uber). To become a driver, Mr. Heller downloaded the Uber Eats app on his cellphone and clicked “I Accept” twice on a standard form services agreement (the “Adhesion Contract”).51 Within the Adhesion Contract was a mandatory arbitration clause, requiring all disputes to first go to mediation under International Chamber of Commerce (ICC) Mediation Rules followed by arbitration under the ICC Arbitration Rules upon failure of mediation.52 The place of arbitration was to be in the Netherlands.53

In 2017, Mr. Heller sought to have a class action proceeding against Uber certified by the Ontario Superior Court (ONSC) regarding alleged breaches of the Ontario Employment Standards Act.54 Uber sought to enforce the arbitration clause. The motion judge applied the International Commercial Arbitration Act55 because it determined that the agreement was a licensing agreement, falling under the scope of commercial contracts. The arbitration agreement was found to be enforceable; and Uber was granted a stay of proceedings in favor of ICA.56

On appeal, the lower court decision was reversed. The Ontario Court of Appeal held that the arbitration agreement was void on two grounds. Firstly, the arbitration agreement was unconscionable and secondly, it was an unlawful attempt to contract out of the ESA because employment contracts are not arbitrable.57 Uber appealed to the SCC.

ii. Majority Opinion

The majority opinion, delivered by Abella J and Rowe J, came to three main conclusions regarding the Appellant’s application to stay judicial proceedings in favor of arbitration. Firstly, the arbitration statute governing the agreement was the domestic statute, the Ontario Arbitration Act.58 The Ontario ICAA did not apply because, although the dispute between Uber and Heller was international, it was not commercial.59

In coming to their first determination, the majority looked to the guidance on the scope of “commercial” provided in the Model Law and the UN Model Law Commentary,60 which excludes labour and employment disputes.61 Using this guidance, the Court reasoned that the nature of the dispute was the key factor to determine if a relationship was commercial.62 Based on the nature of the dispute before it – the question of Mr. Heller’s classification as an employee or independent contractor – the Court concluded that the dispute was not commercial, but instead was a labour and employment dispute.63 Thus, the majority found that the domestic arbitration statute applied.

The majority’s second determination was that the Court possessed the authority to determine whether the arbitrator had jurisdiction, rather than deferring the question of jurisdiction to the arbitrator.64 The Court referred to Dell, which dictates that parties to a dispute should be referred to arbitration unless the “agreement is manifestly tainted by a defect rendering it invalid or inapplicable”.65 In a novel application of public policy, the Court considered that the cost of ICA made justice inaccessible to Mr. Heller.66 The administrative fees of $14,500 USD to commence ICA proceedings represented almost all of Mr. Heller’s annual income.67 The majority classified the access to justice issue as a defect justifying a departure from the competence-competence principle.68

Having determined it was within their jurisdiction to decide on the enforceability of the arbitration agreement, the majority finally determined that the clause was void. This finding was based on unconscionability. Applying the two elements of unconscionability: inequal bargaining power, and an improvident bargain, 69 the majority found that both elements were present, especially in the context of an adhesion contract.70 The majority did not consider the argument that the clause was also void because it unlawfully contracted out of the ESA. Such a finding would have required the Court to classify Uber drivers as employees, rather than as independent contractors.

iii. Dissenting Opinion

In her dissent, CĂ´tĂ© J emphasized core principles of modern arbitration: party autonomy and freedom of contract.71 The dissenting opinion was based on three main grounds – first, the applicable statute was the Ontario ICAA; second, the competence-competence principle applied; and third, the evidence before the Court was insufficient to find the arbitration clause void for unconscionability.

CĂ´tĂ© J found that a correct interpretation of the Model Law directs that nature of the relationship should determine whether a dispute is commercial, not the nature of the dispute.72 Based on her assessment, the nature of the relationship between Uber and Mr. Heller was commercial – a software licensing agreement.73 As the relationship was both international and commercial, CĂ´tĂ© J found that the Ontario ICAA applied.

CĂ´tĂ© J also rejected the majority finding that the principle of competence-competence did not apply. Relying on Dell, she maintained that systematic referral to arbitration should apply unless the question is one of mixed law in fact, which was not the case.74 CĂ´tĂ© J also shared concern that departing from the rule of systematic referral to arbitration would undermine the Court’s trend of supporting arbitration.75

Noting the inherent power imbalance in adhesion contracts, CĂ´tĂ© J expressed concerns regarding the majority’s implicit imposition of a “sweeping restriction on arbitration in standard form contracts”76 as something better left to the legislature.77 Upon the conclusion of her unconscionability analysis, CĂ´tĂ© J concluded that the arbitration clause was not unconscionable on a superficial review of the evidence. She noted that the determination of unconscionability would require a proper determination in arbitration, with an evidentiary record.78

CĂ´tĂ© J suggested two remedial options to address Mr. Heller’s access to justice concerns – the Court could either strike the selection of the ICC Rules,79 requiring Mr. Heller and Uber to agree to new arbitration rules; or Uber could pay the administrative fees for arbitration.80 Regardless of the chosen route, CĂ´tĂ© J contended that the appropriate remedy was a stay of proceedings in favor of arbitration.81

III. Shifting Contractual Relationships in the Gig Economy

Heller illuminates the difficulty of enforcing mandatory arbitration clauses in the gig economy. It is important to first appreciate how the gig economy works to better understand these difficulties. This section will begin with a brief discussion of the gig economy, followed by a review of adhesion contracts and concerns with clickwrap agreements that mandate arbitration.

a. The Gig Economy

The gig economy refers to the trend towards a “fissured workplace”, where companies or platforms outsource specific tasks to workers who are not employed in the traditional sense, but are instead paid for each task or “gig” they complete. 82 Gig workers enter into contracts with platforms or clients directly to complete work in exchange for an arranged sum of money.83

The proliferation of the gig economy is related to the advancement of technology and consumer demand.84 Platforms give users and workers easy access through smartphone apps that streamline the process of accessing services.85 In addition, generational preferences that value flexibility, independence, and decentralization of the workplace provide a willing labour force to the gig economy.86 Low-income individuals who require supplemental income or full-time employment can also take on flexible gig work under their own schedules.87 For these reasons, the gig economy is growing at a rapid rate internationally.88

Companies like Uber have built their entire business model upon the “gig” method of worker procurement.89 Using gig workers allows companies to suggest they simply provide a platform facilitating the sale of services by gig workers to outside clients.90 This argument allows companies to classify gig workers as independent contractors rather than employees, minimizing their costs and liability.91 Consequently, gig workers are deprived of benefits associated with traditional employment like health benefits, job security, or minimum wage requirements.92 In addition, gig workers have a lack of bargaining power compared to the companies they work for.93 In many senses, gig workers are at the mercy of the platform they operate on.94

b. Adhesion Contracts

Adhesion contracts, also known as standard form contracts, are a “pervasive and indispensable feature of modern commercial life.”95 These contracts typically consist of a standard form containing invariable terms that are always offered by a party when entering the type of transaction in question.96 The other party can either agree to the terms or decline and end the entire transaction.97 There is no opportunity to negotiate.

While adhesion contracts play an important role in allowing business to function, concerns regarding adhesion contracts acknowledge their problematic elements. Firstly, the terms of adhesion contracts are unlikely to be read or fully understood by the party agreeing to the terms.98 This lack of understanding disregards the basic contractual principle requiring consensus ad idem, or meeting of the minds, for a contract to be enforceable.99 When a party does not know or understand what they are contracting to, no meeting of the minds has taken place.100

Secondly, voluntariness can be at issue in adhesion contracts. The terms of an adhesion contract are often unilaterally drafted by the more powerful party, creating a risk that an adhesion contracts will contain excessively harsh or oppressive terms that are favorable to the offering party.101 Also, the powerful party may have a monopoly over the good or service being contracted for. 102 In these cases, the party agreeing to the terms may not be able to decline the contract, even if they recognize that the terms are unfair. As there is no option to negotiate, and possibly no alternative, the less powerful party may not agree voluntarily, but rather out of necessity.103

i) Clickwrap

Clickwrap agreements are adhesion contracts where the user of a computer program cannot progress until they click on a box containing the words “I agree”.104 By clicking the box, users indicate their consent to the terms and conditions of the contract.105 The Uber Adhesion Contract is an example of clickwrap, as Mr. Heller was required to click “I accept” to the terms and agreements to use the Uber app. Many gig work contracts are clickwrap agreements.106

Clickwrap exhibits the difficulty in balancing competing principles of commercial efficiency and freedom to contract on the internet with public policy concerns and contractual principles.107 This tension is perhaps best illustrated in Douez v Facebook Inc.108 where a forum selection clause in a consumer clickwrap contract was challenged.

In Douez, majority of the SCC held that the disputed clause was unenforceable because public policy concerns weighed heavily against its enforcement.109 The majority questioned the voluntariness of the Appellant’s acceptance, as she had few alternatives to Facebook and noted that social networking is necessary for social functioning in society.110 In addition, the Court took notice of the inequality of bargaining power presented by an “online contract of adhesion formed between an individual and a multi-billion dollar corporation”.111 In a slightly differing opinion, Abella J found that the forum selection clause was unenforceable under the unconscionability doctrine.112

McLachlin CJC, Moldaver J and CĂ´tĂ© J would have dismissed the appeal and found the forum selection clause enforceable. Unlike the majority, the dissent reasoned that for reasons of certainty and predictability, the impugned clause was enforceable so companies could avoid being “dragged into litigation in foreign countries.”113 The focus of the dissent was on principles of private international law and certainty in contract.114

IV. Clarity is Needed Regarding ICA in the Gig Economy

The SCC has slowly progressed from hostility towards arbitration to acceptance, and after Heller there are now legitimate concerns that Canada will lose its reputation as a world leader in arbitration.115 How can certainty be restored so that companies feel comfortable contracting with Canadian entities and feel reassured that Canadian courts will respect the competence of arbitrators and ICA as a private system of justice? To answer these questions, two areas require clarification: 1) whether gig economy work contracts are commercial; and 2) whether clickwrap mandating ICA is enforceable in gig economy work contracts.

There is no question that many gig economy contracts are international in scope. However, as seen in Heller, the classification of gig economy contracts as commercial is a fundamental element of their inclusion in ICA as opposed to domestic arbitration. The classification of disputes as commercial is purposely left broad in the Model Law because it is difficult to define “commercial”. The UN Model Law Commentary notes that there is no definition which can “draw a precise line between commercial and non-commercial relationships”.116

The result of the vague guidance provided by UNCITRAL regarding the scope of international is that it has led to different judicial interpretations. For example, the majority in Heller used the nature of the dispute to determine that it was not commercial. Using the same guidance, Cote J used the relationship between the parties to determine that the dispute was commercial, as it was a software licensing agreement. Similarly, the ONSC classified the same dispute as a software licensing agreement based on the relationship between the parties.117

The second area that must be addressed is the use of clickwrap to bind parties to ICA in gig economy work contracts. Gig economy work contracts are very different from traditional employment contracts. Indeed, it is difficult to imagine entering into a traditional employment contract by clicking “I accept” on a smartphone screen. Yet, clickwrap is currently the manner in which gig workers give up their right to litigate any disputes that arise from their work agreements.

The inherent concerns with adhesion contracts; lack of voluntariness and consensus ad idem, are pronounced in gig economy work contracts. Voluntariness is undermined by the imbalance in bargaining power that characterizes gig work. Even if gig workers understand the terms to which they are agreeing, many have few other options for work, or already have other employment and need extra income to meet their basic needs. Consensus ad idem is also questionable in gig work contracts because the arbitration agreements are easy to overlook and are often written in complicated terms that are difficult to understand.118

Douez also raises the question of whether clickwrap contracts that remove the right to have disputes heard in Canadian courts are contrary to public policy. While the nature of the contract in Douez was in the consumer context and involved a forum selection clause, the underlying concerns of extreme disparity in bargaining power extend into the reasoning in Heller. Yet, CĂ´tĂ© J’s caution of the need to leave reform of arbitration in adhesion contracts to the legislature rings true. Legislative reform is necessary to reintroduce clarity to the enforcement of gig work contracts.

V. Reform of the Model Law Can Restore Certainty to the Scope of ICA

Model Law reform is necessary to provide certainty to companies in the gig economy, while facilitating access to justice for gig workers. The gig economy is expanding internationally, and it is likely that national courts will continue to be called upon to determine the enforceability of clickwrap arbitration clauses in other gig work contracts.119 As the aim of the Model Law is to create uniformity, the guidance it provides should be amended to provide more complete assistance to interpreting courts.

Currently, the guidance provided by the Model Law regarding the scope of “commercial” consists of an explanatory footnote. This footnote has been shown to be insufficient because it allows too much interpretation, resulting in conflicting classification. Heller illustrates how different courts can come to completely different classifications of the same dispute by using the current Model Law guidance, despite the additional information provided in the UN Model Law Commentary. Instead, commercial should be defined in the text of the Model Law, in a manner similar to how “international” is currently defined. While the footnote is a good template for the definition, it is of crucial importance to clarify what the determination of “commercial” hinges on – the nature of the dispute or the relationship between the parties.

The definition of “commercial” should also explicitly exclude gig work contracts because they are ill-suited for ICA. Although the SCC did not definitively classify Uber drivers as employees or independent contractors, the Heller decision focuses on the inequality of bargaining power between Uber and its drivers. Gig work contracts will continue to be characterized by this power imbalance, so it makes sense to exclude them from the realm of ICA. This change would not preclude arbitration of gig work contracts in the domestic setting, or through specialized labor arbitration where gig workers could realistically access dispute resolution without paying prohibitively expensive filing costs in a different State.120

The Model Law is an ideal instrument to create international change because it has been widely adopted and should reflect the modern landscape of international business. The international nature of the gig economy is undeniable. Apps like Uber are used in numerous countries, therefore single State reform would be insufficient to address the need for change.121 While the Model Law is not binding, its amendment would signal the need for countries to amend their respective ICA statutes, while respecting the unique business environment of each state.

The need to modernize the Model Law so that it reflects the realities of the gig economy is apparent. In 1996, at the time of the most recent amendment, the idea of online contracts was in its infancy. Enforcement of clickwrap contracts was just beginning to be litigated, and the concept of work remained quite traditional.122 Twenty four years later, the realities of international business have completely changed. As a result, the guidance on international dispute resolution must respond with an approach that acknowledges these changes.

Conclusion

It is a reality of modern business that technology will continue to progress and change the manner in which business transactions are entered. ICA clauses offer companies certainty and predictability when entering commercial contracts, and clickwrap is a fast, efficient, and easy way to enter millions of contracts around the globe.

In reality, however, not all international business transactions are the same. In the gig economy, the content of transactions between gig workers and international business platforms is the livelihood of millions. When applying the Model Law to these contracts, it becomes apparent that the guidance it provides is outdated. Considering the immense growth of technology since it was created and amended, this is unsurprising. The definition of “commercial” in the Model Law needs to reflect the current realities of international business.

ICA remains an important avenue for resolution of international commercial disputes. But the underlying principles of ICA – party autonomy, freedom to contract and avoiding judicial interference are simply not compatible with gig work contracts. The gross imbalance in bargaining power and inherent difficulty in finding voluntariness when a contract governs one’s livelihood demonstrates this incompatibility. By amending the Model Law to preclude these disputes from the scope of ICA, clarity and certainty can return to this area of the law.

BIBLIOGRAPHY

Legislation

Arbitration Act, 1991, SO 1991, c 17.

Electronic Transactions Act, S.B.C. 2001, c. 10.

Employment Standards Act, 2000, SO 2000, c 41.

International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5.

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Heller v Uber Technologies Inc., 2019 ONCA 1.

Heller v Uber Technologies Inc., 2018 ONSC 718.

Uber Technologies Inc v Heller, 2020 SCC 16.

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GreCon Dimter inc. v J. R. Normand inc, 2005 SCC 46.

Desputeaux v Éditions Chouette (1987) inc, 2003 SCC 17.

National Gypsum Co. v. Northern Sales Ltd, [1964] S.C.R. 144; 43 D.L.R. (2d) 235.

Seidel v TELUS Communications Inc, 2011 SCC 15.

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Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1210 (9th Cir. 2016).

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Endnotes

1 Deloitte, “2017 Global Mobile Consumer Survey: US edition-The dawn of the next era in mobile” (2017) online (pdf) at 12. (“Consumers have been more open to signing agreements with mobile app and service providers – 91 percent willingly accept legal terms and conditions without reading them before installing apps, registering Wi-Fi hotspots, accepting updates, and signing on to online services such as video streaming. For ages 18 to 34, the rate of acceptance of terms and conditions, without reading them, reaches 97 percent.” Although this information is from the US, the same likely applies to Canadians)
2 Sung-Hee Jeon, Huju Liu and Yuri Ostrovsky, “Measuring the Gig Economy in Canada Using Administrative Data” (16 Dec 2019), online (pdf): Analytical Studies Branch Research Paper Series. (According to Statistics Canada, approximately 8.2% of Canadians participate in the gig economy)
3 The gig economy refers to the rapidly developing sector of the economy where “workers who enter into short-term contracts with firms or individuals to complete specific and often one-off tasks.” (Employment and Social Development Canada, “Backgrounder: Gig workers and digital platform workers” (18 March 2021), online: Government of Canada Labour Standards Program.) Common examples of jobs in the gig economy include ride sharing services (e.g. Uber, Lyft) and food delivery services (e.g. Skip the Dishes, Uber Eats).
4 Uber Technologies Inc v Heller, 2020 SCC 16. [Heller]
5 UNCITRALOR, 1985, UN Doc/ E.08.V.4 (Amended 2006). [Model Law]
6 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, 330 UNTS 3 (entered into force 7 June 1959, accession by Canada 12 May 1986). [NY Convention]
7 But see SI Strong, “Beyond International Commercial Arbitration? The Promise of International Commercial Mediation” (2014) 45 Washington U JL & Policy 11; Michael Buhler, “Costs of Arbitration: Some Further Considerations” (2005) Global Reflections Intl L, Commerce & Dispute Resolution 179. (Although there is a general consensus that ICA costs less than litigation, authors have shown concern regarding the rising costs associated with ICA)
8 Margaret Moses, The Principles and Practice of International Commercial Arbitration (Cambridge University Press, 2017), accessed online via Cambridge Core at 1. (International treaties like the NY Convention, supra note 5 require signatories to enforce certain arbitral awards)
9 Moses, supra note 8 at 1.
10 John J Barcelo II, “Who Decides the Arbitrator’s Jurisdiction – Separability and Competence – Competence in Transnational Perspective” (2003) 36:4 V and J Transnat’l L 1115 at 1118.
11 Ibid.
12 Jean R. Sternlight, “Creeping Mandatory Arbitration: Is It Just?” (2005) Stanford L Rev, 57:5, 1631 at 1635, see also 1662-1664.
13 Ibid at 1635.
14 Moses, supra note 8 at 1; Ali Assareh, “Forum Shopping and the Cost of Access to Justice – Cost and Certainty in International Commercial Litigation and Arbitration” (2012-2013) 31 JL & Com 1 at 5, see also footnote 8. (Some estimate that ninety percent of international commercial contracts contain arbitration clauses.)
15 Leonard D Graffi, “Securing Harmonized Effects of Arbitration Agreements under the New York Convention” (2006) 28:3 Hous J Intl L 663 at 667.
16 New York Arbitration Convention, “List of Contracting States” (last updated 2020), online: Contracting States.
17 NY Convention, supra note 6, art 1(3).
18 Ibid, footnote 20. (“The Government of Canada declares that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the laws of Canada, except in the case of the Province of Quebec where the law does not provide for such limitation.”).
19 Ibid, art 2(1), (3). (These formal requirements include that 1) the agreement must be made in respect of a defined legal relationship, and must be in writing, and 2) the writing requirement is fulfilled by clauses in contracts signed by parties or those included in an exchange of letters or telegrams)
20 Ibid, art 2(3). (The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.”).
21 Ibid, art 2(1) (“Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.”).
22 Michael Hoellering, “The UNCITRAL Model Law on International Commercial Arbitration” (1986) 20:1 Intl Lawyer 327.
24 Ibid. (With the exception of British Columbia (2018), Nunavut (1999), Ontario (1987) and Saskatchewan (1988)).
25 Hoellering, supra note 22 at 328-331.
26 Hoellering, supra note 22 at 329-30; see also “United Nations. Commission on International Trade Law. Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration: Report of the Secretary-General”, U.N. Doc. A/CN.9/264, March 25, 1985 at 10. [UN Model Law Commentary]
27 Model Law, supra note 5, article 1(1), footnote 2.
28 Moses, supra note 8 at 2.
29 Ibid. (The terms “arbitration agreement” and “arbitration clause” are used interchangeably in this paper. Both refer to this definition.
30 Model Law, supra note 4 art 16; See e.g. International Commercial Arbitration Act, RSA 2000, c I-5, ch. IV, art 16(1). [Alberta ICAA]
31 John J Barcelo II, “Who Decides the Arbitrator’s Jurisdiction – Separability and Competence – Competence in Transnational Perspective”(2003) 36:4 V and J Transnat’l L 1115 at 1116.
32 Moses, supra note 8 at 21.
33 Ibid at 7.
34 Moses, supra note 8 at 22.
35 NY Convention, supra note 6.
36 Moses, supra note 8 at 22-23.
37 Ibid at 4; Christina Knahr, Investment and Commercial Arbitration: Similarities and Divergences. International Commerce and Arbitration. (Utrecht, The Netherlands: Eleven International Publishing, 2010) at 75-79, accessed online via EBSCOHost; Donald Francis Donovan, “International Commercial Arbitration and Public Policy” (1995) 27:3 NYUJ Int L & Pol 645 at 647.
38 Donovan, ibid at 649; Moses supra note 8 at 1.
39 For instance, domestic arbitration legislation in Alberta dates back to 1922 (The Arbitration Act, RSA 1922, c 98), whereas provincial legislation regarding ICA was enacted in most Canadian provinces in the late 1980’s, adopting the Model Law.
40 The provinces and territories have both domestic and international arbitration statutes. In Alberta, the applicable domestic arbitration statute is the Arbitration Act, RSA 2000, c A-43.
41 Heller, supra note 4 at para 200 (dissenting opinion of CĂ´tĂ© J); Seidel v TELUS Communications Inc, 2011 SCC 15 at para 89 [Seidel].
42 [1964] S.C.R. 144, 43 D.L.R. (2d) 235. [National Gypsum]
43 Ibid at para 10.
44 Seidel, supra note 41.
45 Ibid at paras 5-6.
46 2003 SCC 17. [Desputeaux]
47 Desputeaux, supra note 46 at para 38.
48 2005 SCC 46 at para 38, see also para 22 [GreCon]. (The SCC upheld a choice of forum and choice of law clause giving Germany jurisdiction, rather than Quebec. The Respondent’s action in the Quebec Superior Court was dismissed.)
49 2007 SCC 34 at para 84. [Dell]
50 Ibid.
51 Heller, supra note 4 at paras 5-7.
52 Ibid at para 50.
53 Ibid.
54 Employment Standards Act, 2000, SO 2000, c 41. [ESA]
55 International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5. [Ontario ICAA]
56 Heller v Uber Technologies Inc., 2018 ONSC 718. [Heller ONSC Decision]
57 Heller v Uber Technologies Inc., 2019 ONCA 1.
58 Arbitration Act, 1991, SO 1991, c 17. [Ontario Arbitration Act]
59 Heller, supra note 4 at 28.
60 UN Model Law Commentary, supra note 26 at 10-11.
61 Ibid at 10 (“Not covered, for example, labour or employment disputes and ordinary consumer claims, despite their relation to business”).
62 Heller, supra note 4 at paras 25-26.
63 Ibid at para 26.
64 Ibid at para 31.
65 Dell, supra note 49 at para 75.
66 Heller, supra note 4 at paras 37-39.
67 Ibid at para 94.
68 Heller, supra note 4 at para 42, see also para 47.
69 Ibid at para 62, see also para 79.
70 Heller, supra note 4 at paras 88-91.
71 Ibid at para 177.
72 Ibid at paras 212-213.
73 Heller, supra note 4 at para 216.
74 Ibid at para 222.
75 Ibid at para 237.
76 Heller, supra note 4 at para 266.
77 Ibid; see also para 268.
78 Ibid at para 289.
79 Heller, supra note 4 at para 333.
80 Ibid at para 324.
81 Ibid at para 338.
82 Justin Azar, “Portable Benefits in the Gig Economy: Understanding the Nuances of the Gig Economy” (2020) 27:3 Geo J on Poverty L & Pol’y 409 at 409-410. (Other terms that have been used to describe this model of work include platform economy, on-demand economy, peer-to-peer economy, and sharing economy.)
83 Jeon, supra note 2 at 6; Alex De Ruyter and Martyn Brown, The Gig Economy. (Newcastle upon Tyne: Agenda Publishing, 2019) at 2-6.
84 Azar, supra note 82 at 411-412.
85 Ibid at 412.
86 Ibid.
87 Azar, supra note 82 at 413.
88 Uber Investor, “Uber Announces Results for Fourth Quarter and Full Year 2019” (6 Feb 2020) online; Uber, “Company Info” (2020) online. (For example, Uber reported a 28% increase in rides given to customers between 2018 and 2019 and has 3.9 million drivers)
89 Azar, supra note 82 at 411.
90 Ibid. (The argument that gig workers are independent contractors remains a live issue, as the SCC did not decide on this issue in Heller)
91 Ibid at 411.
92 Azar, supra note 82 at 414.
93 Ibid at 415.
94 See De Ruyter, supra note 83 at 6-7.
95 John McCamus, “The Law of Contracts”, 2nd ed, accessed via Canadian Electronic Library/desLibris (Toronto: Irwin Law, 2012) at 185.
96 McCamus, supra note 95 at 185.
97 Ibid.
98 McCamus, supra note 95 at 185.
99 Ibid at 49.
100 Ibid.
101 McCamus, supra note 95 at 186.
102 Ibid at 186.
103 McCamus, supra note 95 at 186.
104 Nancy S Kim, “Wrap Contracts: Foundations and Ramifications”, Accessed via Oxford Scholarship Online, (New York: Oxford University Press: 2014) at 39.
105 Ibid; see also ProCD Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (the majority held that by clicking through the terms and conditions in a computer software agreement, the user entered an enforceable contract); In many jurisdictions, the enforceability of clickwrap agreements is codified in legislation (See e.g. s. 15(1) of the Electronic Transactions Act, S.B.C. 2001, c. 10.)
106 Charlotte Garden, “Disrupting Work Law: Arbitration in the Gig Economy” (2017) University Chicago Legal Forum 205 at 218.
107 See Century 21 Canada Limited Partnership v Rogers Communications Inc., 2011 BCSC 1196 at 109.
108 2017 SCC 33. [Douez]
109 Ibid at para 63.
110 Ibid at paras 55-56.
111 Ibid at para 54.
112 Douez, supra note 108 at paras 112-116. (Abella J: “This, to me, is a classic case of unconscionability.”)
113 Ibid at para 123.
114 Ibid at paras 123-125.
115 See Heller supra note 4 at paras 200-209; Tamar Meshel, International Arbitration in Canada after Uber Technologies Inc v Heller (2020) 00 Arbitration International 1 at 23.
116 UN Model Law Commentary, supra note 26 at 10.
117 Heller ONSC Decision, supra note 56 at paras 45-46.
118 Garden, supra note 106 at 207; Kerby Kniss, "Uber’s Arbitration Trickery: Mohamed’s Holding the New Era of Limiting the Scope of Administrative Protection and the Vindication of Rights Doctrine" (2018) 51:2 John Marshall L Rev 439 at 441.
119 See e.g. The Canadian Press, “Lyft starts global expansion with Toronto launch Tuesday” (10 Dec 2017) online: Bloomberg News. (A similar drive-sharing app to Uber, Lyft, has expanded across North America and plans to expand globally); see e.g. Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1210 (9th Cir. 2016). (The Appeal Court of the 9th Circuit found that the arbitration clause in the clickwrap adhesion contract between Uber and its drivers was enforceable, and compelled ICA).
120 See e.g. Uber B.V. (“UBV”) & Ors v Aslam & Ors [2018] EWCA Civ 2748 (19 December 2018), leave to appeal to UKSC granted 2019/0029. (In the UK, Uber drivers were able to bring an action against Uber in the Employment Tribunal regarding the classification of Uber drivers as employees. The decision has been appealed to the Supreme Court and was heard on July 21st, 2020)
121 Uber Company Info, supra note 90. (Uber operates in 63 countries and over 700 cities as of December 2018)
122 See ProCD, Inc. v. Zeidenberg, supra note 105. (Leading decision on the enforceability of clickwrap)