An Ontario Superior Court judge has ordered a halt to legal proceedings between two northern Ontario municipalities over a landfill agreement, ruling their decades old contract requires them to settle their differences through arbitration, not in a courtroom1. The decision, released on September 3, 2025, by Justice Bellows, sends a dispute between the Town of Mattawa and the Township of Papineau-Cameron to an arbitrator, reinforcing the legal standing of arbitration clauses even when one party claims the underlying agreement has become void. The ruling stems from a disagreement over the continued validity of a 1993 contract governing a landfill site operated by Mattawa but located within the boundaries of Papineau-Cameron.
The historical relationship between the two municipal corporations dates back to the early 1970s, when Mattawa began operating the landfill. This arrangement was formally cemented in a participation agreement signed in April 1993. A key feature of this contract was an arbitration clause, which stipulated that if the parties could not agree on the “interpretation or implementation of any of the terms of this Agreement and all matters associated with the landfill,” the dispute would be determined by arbitration upon written notice. For years, this agreement governed the relationship without apparent issue. The situation changed, however, after Mattawa sought to expand the landfill’s footprint.
In 2014, Mattawa applied to the Ontario Ministry of the Environment for approval to expand the site. On October 21, 2019, the ministry granted this request by issuing an Amended Environmental Compliance Approval, or AECA. Following this approval, a period of quiet ensued for nearly a year and a half. Then, on April 9, 2021, Mattawa sent a letter to Papineau-Cameron that fundamentally challenged the status quo. In this communication, Mattawa asserted for the first time that the 2019 AECA had effectively rendered the 1993 Agreement null and void. Attached to the letter was a newly drafted participation agreement which, according to court documents, significantly altered the terms of their long standing relationship. Mattawa demanded that Papineau-Cameron execute this new contract.
Papineau-Cameron did not accept Mattawa’s position. Instead of signing the new agreement, the township relied on the dispute resolution mechanism in the original contract. On November 25, 2021, Papineau-Cameron issued a formal Notice to Arbitrate, signalling its intent to have an arbitrator resolve the disagreement over the 1993 Agreement’s validity. In response, Mattawa escalated the matter by commencing a legal application in the Ontario Superior Court of Justice. The central goal of Mattawa’s court application was to obtain a judicial declaration that the 1993 Agreement was no longer in force and, as a result, the arbitration clause contained within it was not binding on the parties.
This led to the motion heard by Justice Bellows. The immediate issue before the court was not the ultimate question of whether the 1993 Agreement was valid. Instead, it was a preliminary jurisdictional battle. Papineau-Cameron brought a motion to stay, or pause, Mattawa’s court application. The township argued that the court should decline to hear the case and instead defer to the arbitration process that the parties had originally agreed to in their contract. This jurisdictional question had to be decided before any arguments about the landfill or the environmental approval could be heard by a judge.
In court, Mattawa argued against the stay, basing its position on a two part legal framework established by the Supreme Court of Canada in its 2022 decision, Peace River Hydro Partners v. Petrowest Corp. First, Mattawa contended that Papineau-Cameron had not met the technical prerequisites for a stay because it had already taken a “step” in the court proceedings, thereby implicitly accepting the court’s jurisdiction. Second, Mattawa argued that even if the technical requirements were met, the case fell into one of the statutory exceptions listed in section 7(2) of Ontario’s Arbitration Act. It claimed that Papineau-Cameron had waited too long to file its motion, constituting an “undue delay.” Mattawa also asserted that the central issue, whether the environmental approval nullified the contract, was a straightforward legal question “proper for summary judgment,” meaning a judge could decide it efficiently without the need for a full trial or arbitration.
Papineau-Cameron presented a contrasting view. The township argued that its participation in the court process had been minimal and purely procedural, done only to preserve its rights while the jurisdictional issue was settled. It insisted it had not taken any substantive steps in the litigation. On the question of delay, Papineau-Cameron submitted that the time that had passed was largely a result of the parties’ attempts to negotiate a resolution outside of the legal system and was therefore not “undue.” The township strongly disagreed with the characterization of the dispute as simple. It argued that the matter was a complex issue of contractual interpretation requiring a detailed examination of evidence, making it an ideal candidate for arbitration as contemplated by their agreement.
In his decision, Justice Bellows systematically applied the Peace River framework. In the first stage of the analysis, he assessed the four technical prerequisites for a mandatory stay. He found that Papineau-Cameron easily met the first three: an arbitration agreement existed, a court proceeding had been started by a party to that agreement, and the subject of the proceeding, the validity of the contract, fell squarely within the scope of matters to be arbitrated. On the fourth point, the judge found that Papineau-Cameron had not taken a substantive “step” in the proceeding, accepting that its actions were only to preserve its legal position. Concluding that the township met the “arguable case” threshold for this stage, Justice Bellows determined that the mandatory stay provision in the Arbitration Act had been triggered.
The burden then shifted to Mattawa for the second stage of the analysis: to prove on a balance of probabilities that a statutory exception clearly applied. Justice Bellows found Mattawa’s arguments unpersuasive. He accepted Papineau-Cameron’s explanation that the delay in bringing the motion was largely attributable to settlement discussions. Regarding the claim that the matter was suitable for summary judgment, the judge disagreed, finding that the substantive issues would likely require substantial evidence. He observed that a court proceeding might only result in a partial judgment, leaving other contentious issues unresolved, whereas an arbitrator “would be able to deal with all issues that arise more expeditiously than the Superior Court of Justice.” He also noted that extensive court time would lead to “unnecessarily long delay.”
Justice Bellows made a pointed observation about Mattawa’s conduct, noting that it unilaterally sought the amended environmental approval and then, almost 18 months later, took the position that this action nullified the entire 1993 Agreement. He also found it notable that the new agreement Mattawa had drafted and tried to impose on Papineau-Cameron contained arbitration and land acquisition clauses that were very similar to the ones in the 1993 contract it was now claiming were ineffective. The judge stated that the arbitration clause in the 1993 Agreement was clear and explicitly covered the “interpretation or implementation” of its terms. Therefore, the question of whether the agreement was nullified by the new environmental approval was a matter for an arbitrator to decide.
Ultimately, Justice Bellows granted Papineau-Cameron’s motion. The court application initiated by Mattawa has been stayed, pending the outcome of an arbitration process. The ruling also affirms the “competence-competence” principle, which allows an arbitrator to first rule on their own jurisdiction to hear the dispute. As the successful party on the motion, Papineau-Cameron was awarded its legal costs.
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