After fielding a team in the Can-Am League during the 2008 season, Rapidz Baseball advised the League that it would not operate the following year and requested a voluntary withdrawal based on financial hardship. The League rejected the application after holding an arbitration hearing before the League’s Board, terminated the team’s membership and drew down a $200,000 letter of credit. Rapidz Baseball had signed a variety of contractual agreements with the League. These agreements included a forum selection clause which stipulated that the North Carolina Courts had jurisdiction over any litigation and that North Carolina law was to be applied. In addition, the agreements provided that any disputes were to be handled by arbitration as the exclusive remedy, as opposed to litigation. Despite the forum selection, choice of law and arbitration clauses and after the arbitration hearing was held, Rapidz Baseball and its related companies sued the League, its principals and the City of Ottawa in Ontario in contract and tort.

The case was heard before the Ontario Superior Court and was appealed by the claimant to the Ontario Court of Appeals and, ultimately, to the Supreme Court of Canada. As a result of the unanimous decision by the Supreme Court, the law in Canada is now clear in that a defendant faced with a claim in a jurisdiction other than that specified by a forum selection clause will not be precluded from relying upon that forum selection clause by defending the matter on the merits unless the plaintiff can prove strong cause to disregard the forum selection clause. Attorning to the jurisdiction by filing a defence on the merits does not qualify as strong cause to dispel the application of a forum selection clause.