Case number: 34
Article number: model arbitration law / 8
Thessaurs issue:
Country of decision: Canada
Year of decision: 1992
Type of decision: Judicial decision

Case 34: MAL 8
Canada: Federal Court of Canada, Trial Division (Joyal J.) 30 September 1992 and 9 October 1992 (identical decisions)
Miramichi Pulp and Paper Inc. v. Canadian Pacific Bulk Ship Services Ltd.
Original in English and French
Unpublished

While the Federal Court possesses some permissive jurisdiction over the granting of stays of proceedings, strong reasons are
required to overcome the assumption that contracts must be respected and, therefore, article 8 MAL must operate.

The parties entered into a charter-party agreement whereby any dispute would be referred to arbitration in London. A dispute
arose and court proceedings were commenced. A stay of these proceedings was granted by the Senior Prothonotary. This
decision was appealed.

The court noted the mandatory nature of article 8 MAL (enacted by the Commercial Arbitration Act, Revised Statutes of
Canada 1985, c.C-34.6) which requires the court to grant a stay of proceedings and refer matters to arbitration where certain
conditions are met. The court also noted the permissive jurisdiction in s. 50 of the Federal Court Act, Revised Statutes of
Canada 1985, c.F-7 which allows the Federal Court to grant stays of proceedings in the interest of justice. The court found
that the interest of justice generally dictated that contractual agreements be upheld. In order to overcome this assumption,
strong reasons are required. The court found that no such strong reasons existed in this case and upheld the decision of the
Senior Prothonotary granting the stay.