Case number: 31
Article number: model arbitration law / 8
Thessaurs issue:
Country of decision: Canada
Year of decision: 1992
Type of decision: Judicial decision

Case 31: MAL 8
Canada: British Columbia Court of Appeal (Hinkson, Southin and Cumming JJ.A.) 10 March 1992
Gulf Canada Resources Ltd. v. Arochem International Ltd.
Published in English: 66 British Columbia Law Reports (2d), 113
Commented on by Tetley in [1993] Lloyd's Maritime and Commercial Law Quarterly, 238

While the court must grant a stay of court proceedings pursuant to article 8 MAL where its terms are satisfied, the court retains
some residual jurisdiction to exercise on an application for a stay.

A contract existed between the parties for the delivery of 375,000 barrels of crude oil. The contract contained an arbitration
clause. The defendant refused delivery and the plaintiff sued for damages. The trial court granted the defendant's request for a
stay of court proceedings pending arbitration pursuant to s. 8 of the International Commercial Arbitration Act, Statutes of
British Columbia 1986, c. 14, which enacts MAL. The plaintiff appealed.

The court determined that, while s. 8 requires that the court grant a stay unless the arbitration agreement is null and void,
inoperative or incapable of being performed, the court still has some residual jurisdiction to exercise. The court may exercise
this jurisdiction and refuse to grant a stay should it conclude that one of the parties named in the proceeding is not a party to
the arbitration agreement, the alleged dispute does not come within the terms of the arbitration agreement or if the application is
out of time. The court upheld the trial court's decision to grant the stay of proceedings.