On November 10, 2022, the Supreme Court of Canada (the "SCC") released its long-awaited decision in Peace River Hydro Partners v Petrowest Corp., 2022 SCC 41(“Peace River”), which addresses the interaction between insolvency law's single proceeding model and arbitration law’s emphasis on contractually bargained-for rights – an interaction often described as “a conflict of near polar extremes”.

In an 8-1decision issued on May 20, the Supreme Court held that rejection of an executory trademark license agreement in a bankruptcy of the licensor is merely a breach, and not a termination or rescission, of the agreement. The licensee retains whatever rights it would have had upon a breach of the agreement prior to bankruptcy and can continue to use the trademarks pursuant to its contractual rights under applicable law. Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___, No. 17-1657 (May 20, 2019).

Background