The limitation period is a vexing issue to any party involved in a commercial dispute. This truism applies even more to construction disputes because there are a variety of events that may trigger the beginning of the limitation period. The limitation issue becomes even more vexing when the proceeding can be either: by way of arbitration, by way of an action or by way of a counterclaim. Add to that confusion a motion by one party to stay its own action in favour of arbitration. How could any party know when the limitation period started? That was the situation in Penn-Co Construction v. Constance Lake First Nation. The bottom line of this decision is that the limitation period is not stayed while the court sorts out whether the dispute should be resolved by court litigation or arbitration.

This decision is, perhaps, more about not letting the opposition dazzle you with fancy procedures than it is about determining when a limitation period commences and ends.

It is necessary to keep an eye on the limitation period from the beginning. And certainly, after a party to a contract terminates that contract, or purports to do so and commence court or arbitration proceedings within the limitation period after that date, no matter what the other party does.

construction law, arbitration, stay of arbitration or action, remedies, limitation period, refusal to arbitrate