Canada / 25 April 1994 / Canada, Court of Appeal for Ontario / Automatic Systems Inc. v. Bracknell Corporation
Country | Canada |
Court | Canada, Court of Appeal for Ontario |
Date | 25 April 1994 |
Parties | Automatic Systems Inc. v. Bracknell Corporation |
Applicable NYC Provisions | II | II(3) |
Source |
[1994] OJ No 828 | online: CanLII |
Languages | English |
Summary | Automatic Systems Inc. (“Automatic”) entered into a contract to supply and install a conveyor system at a Chrysler plant in Ontario. It subcontracted part of the work to Bracknell Corporation (“Bracknell”). The subcontract provided that any claims arising under it would be submitted to arbitration in Missouri under Missouri law. A dispute arose and Bracknell registered a lien claim against Automatic under the Ontario Construction Lien Act (“CLA”), and commenced an action against Automatic in provincial court to enforce the lien. Rather than participating in the court action, Automatic initiated arbitration proceedings against Bracknell. Bracknell declined to arbitrate and Automatic brought an application before the Ontario Superior Court for an order staying the action and referring the parties to arbitration. The application was dismissed on the grounds that an agreement to submit an Ontario lien claim to arbitration was unenforceable since the CLA only made provision for domestic arbitration. Automatic appealed. The Court of Appeal for Ontario allowed the appeal and granted an order to stay Bracknell’s court action against Automatic. It noted that by adopting the International Commercial Arbitration Act (the “ICAA”) in 1988, the Ontario legislature had shown that it supported international arbitration. The ICAA included the UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”) as a schedule, which was based on the NYC and in particular Article II(3) NYC. The Court of Appeal also noted that the NYC was approved and declared to have the force of law in Canada by the enactment of the United Nations Foreign Arbitral Awards Convention Act in 1986. The Court of Appeal considered that the purpose of the NYC and legislation based on it, was to ensure the respect for the parties’ method of resolving disputes, in a forum of their choice and according to the rules that they had chosen, and that Ontario courts had recognized that the predictability in the enforcement of dispute resolution provisions is an indispensable precondition to any international business transaction, and facilitates international trade. Referring to Article 8(1) of the UNCITRAL Model Law, it noted that the court was limited to refusing a stay in favour of arbitration in three specific situations, namely, where it found the agreement to arbitrate to be null and void, inoperative or incapable of being performed. The Court of Appeal found that Bracknell had failed to show any grounds as to why the arbitration agreement should not be enforced. |
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Attachment (1)
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