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The corporate plaintiff Seine was located in British Columbia and was founded to develop resource properties in North America. Pensa was incorporated in Colorado to do business in mining and gas industries in the limited area around Colorado. The parties entered into negotiations over the sale of Pensa's interest in a gas project in Guatemala The agreement provided for an arbitration clause that required arbitration in Guatemala. Proceedings were commenced after disagreements arose between the parties. The defendants commenced an action in Colorado in January 1998. The plaintiff commenced its action in British Columbia in April 1998. The plaintiff successfully moved that the Colorado action be stayed by invoking the arbitration clause on July 20, 1998. Pensa did not invoke the arbitration clause before the B.C. court but instead filed a defense and counterclaim. Seine, having started arbitration proceedings in relation to the claim originally brought in Colorado, asked stay of Pensa's counterclaim pending arbitration, on the grounds that the Colorado decision prevented Pensa from bringing its claim before the B.C. court when the Colorado court had ordered it to arbitration.

The B.C. Supreme Court held that the entire action be stayed and that the entire matter be referred to arbitration. The court found that Seine was acting unfairly in both forcing Pensa to arbitrate its claim while Seine pursued its court action in B.C. Moreover, the court found that the arbitration clause had been invoked in prior proceedings before the delivery of the defense and counterclaim and therefore that section 8 did not apply to prevent a referral to arbitration.

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