Case number: 73
Article number: model arbitration law / 8(1)
Thessaurs issue:
Country of decision: Canada
Year of decision: 1994
Type of decision: Judicial decision

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Unpublished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.