Case number: 71
Article number: model arbitration law / 9
Thessaurs issue:
Country of decision: Canada
Year of decision: 1994
Type of decision: Judicial decision

Case 71: MAL 9
Canada: British Columbia Supreme Court (Bouck J.) 25 February 1994
Trade Fortune Inc. v. Amagalmated Mill Supplies Ltd. Original in English
Unpublished

The plaintiff, a Greek shipowner, claimed payment of demurrage costs on the ground that the defendant, a Canadian charterer,
was responsible for a delay in unloading a cargo in Korea. The plaintiff sought and obtained an interim court order designed to
secure funds for payment of the claim upon issue of a final decision. The defendant paid into court the full amount of the claim,
but sought that the matter be referred to arbitration in London pursuant to an arbitration clause contained in the charterparty,
litigation be stayed and the interim order be set aside. The plaintiff agreed to the reference to arbitration and stay of
proceedings but objected to the setting aside of the interim court order.

There were two main issues; first, whether interim measures of protection that could be taken by courts (article 9 MAL)
included the interim order granted in the present case or whether such an order could be granted only by the arbitral tribunal
dealing with the substance of the dispute (article 17 MAL); and second, whether staying the procedures had the effect of
setting aside the interim order. On the first issue, the court, referring to the travaux pr‚paratoires of MAL, held that interim
court orders designed to protect the applicant from the risk of being unable to enforce a final arbitral award were not
incompatible with arbitration (article 9 MAL). The application of the defendant to set aside the interim court order was thus
dismissed. On the second issue, the court found that staying the proceedings would not set aside the interim order since the
original claim of the plaintiff would not merge into the arbitration award and the plaintiff was thus not prevented from pursuing
its claim until it was paid in full. The court ordered a stay of proceedings and dismissed the application of the defendant to set
aside the interim court order.