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Case 65: MAL 8(1)
Canada: British Columbia Supreme Court (Mackoff J.)
28 November 1988
ODC Exhibit Systems Ltd. v. Lee, Expand International et al.
Published in English: 41 Business Law Reports, 286
The plaintiff, a British Columbia company, claimed damages from the defendants, including a former general manager of the plaintiff and Expand International, a Swedish company which was the exclusive agent of the plaintiff in Canada, on the ground that they had conspired, deceived and defrauded the plaintiff with a view to terminating the exclusive agency agreement between the plaintiff and Expand International and giving it to the former general manager of the plaintiff. The defendant argued that the court did not have jurisdiction since a breach of contract committed in Sweden was involved and, alternatively, requested a stay of proceedings under s. 8 of the International Commercial Arbitration Act (ICAA, art. 8 MAL) on the basis of an agreement, reached with the plaintiff after the dispute arose, containing an arbitration clause, which provided that "... any dispute arising out of this agreement shall be settled by arbitration ...".
The court found that the plaintiff's action was founded on tort committed in Canada and
thus established its jurisdiction. It was found that conspiracy, deceit and fraud were not
matters arising out of "this agreement". It was also found that these torts
could not have been agreed or even contemplated by the parties as matters that could be
settled by arbitration since they were committed before the conclusion of the arbitration
agreement. It was thus held that the basic condition precedent for the granting of a stay
of proceedings under s. 8, namely that the court action must relate to a matter agreed to
be arbitrated, was not met. The court dismissed the defendant's application for a stay of
the proceedings.
Additional Information published in later CLOUT issue (on "9 February 2000"):
Abstract published in English: [1995] Model Arbitration Law Quarterly Reports, Vol. 1, issue 1, 83
Text of the court decision published in English: [1995] Model Arbitration Law Quarterly Reports, Vol. 1, issue 1, 87
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