Canada / 04 July 1995 / Canada, Court of Appeal for British Columbia / The City of Prince George v. A.L. Sims & Sons Ltd. & McElhanney Engineering Services Ltd.
| Country | Canada |
| Court | Canada, Court of Appeal for British Columbia |
| Date | 04 July 1995 |
| Parties | The City of Prince George v. A.L. Sims & Sons Ltd. & McElhanney Engineering Services Ltd. |
| Applicable NYC Provisions | II | II(3) |
| Source |
online: CanLII |
| Languages | English |
| Summary | A.L. Sims (“Sims”) entered into a construction contract with The City of Prince George containing an arbitration clause. The City of Prince George nominated McElhanney Engineering Services Ltd. (“McElhanney”) as a consultant to manage the contract, pursuant to contract that did not contain an arbitration clause. The construction was delayed, and The City of Prince George sued both Sims and McElhanney for breach of contract and damages. Sims submitted a motion to stay the action in favour of arbitration. The first instance court found that the proceeding should not be stayed, ruling that (i) the arbitration clause was inoperative because there were multiple parties and interrelated motions which were not all subject to an arbitration clause, and (ii) the court could exercise residual statutory jurisdiction to refuse the stay where there was a risk of multiple proceedings and inconsistent results. Sims appealed. The Court of Appeal for British Columbia reversed the first instance decision and referred the matter to arbitration. It cited extensive case law and doctrine from Canada and England for the proposition that the mere judicial inconvenience of adjudicating multiple claims with multiple parties would not render the arbitration clause “inoperative” within the meaning of Article II(3) NYC, and did not bar parties from invoking an arbitration clause that binds them. The Court of Appeal also rejected the lower court’s exercise of its residual jurisdiction. It considered that a court would have residual discretion to refuse a stay only when a party clearly established that it was not privy to an arbitration agreement. It reasoned that in the present case, it was arguable that McElhanney was indeed a party to the arbitration agreement, and therefore the stay should be granted and the issue should be resolved in the arbitration. |
Attachment (1)
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