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Case 73: MAL 8(1)
Canada: Ontario Court of Appeal (Morden, Blair and Austin JJ.A.)
25 April 1994
Automatic Systems Inc. v. Bracknell Corp. (Canal Contractors) and Chrysler Canada Ltd.
Original in English
Unpublished
Automatic, a Missouri company, entered into a contract with Chrysler to supply and install a conveyor system at the Chrysler plant in Ontario. Automatic subcontracted part of the work to Bracknell, an Ontario company. The subcontract contained an arbitration clause providing for arbitration in Missouri under Missouri law. Bracknell, which had a lien claim under the Ontario Construction Lien Act against Automatic, sought and obtained a lien certificate and had it registered against the title to Chrysler's land in Ontario. Automatic sued Bracknell for damages and sought a stay of the proceedings and submission of the matter to arbitration. Bracknell declined to arbitrate and Automatic applied to the court for an order referring the matter to arbitration and staying the proceedings.
The court of first instance found that an agreement for international arbitration for an Ontario lien claim was unenforceable since the Ontario Construction Lien Act made provision only for domestic arbitration and dismissed the application of Automatic.
The appellate court found that, having regard to international comity and the strong
commitment of the Ontario legislator in support of international arbitration demonstrated
through the adoption of MAL, only very clear language in a statute could preclude
international arbitration. The appellate court overturned the decision of the court of the
first instance on the ground that the Ontario Construction Lien Act by providing only for
domestic arbitration did not clearly and expressly preclude international arbitration. The
court, without commenting in detail, drew a distinction between the present case and BWV
Investments Ltd etc. (case 28; appeal pending) in several respects, including that in the
present case the lien had been lifted since Automatic had deposited with the court a
letter of credit in the amount of the lien claim and that there were no other lien
claimants.
This case is cited in Case 74.
Additional Information published in later CLOUT issue (on "9 February 2000"):
Abstract published in English: [1996] Model Arbitration Law Quarterly Reports, Vol. 2, issue 2, 75
Text of the court decision published in English: [1996] Model Arbitration Law Quarterly Reports, Vol. 2, issue 2, 79
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