Case number: 15
Article number: model arbitration law / 8
Thessaurs issue:
Country of decision: Canada
Year of decision: 1989
Type of decision: Judicial decision

Case 15: MAL 8
Canada: Federal Court of Canada, Trial Division (Joyal, J.) 17 January 1989
Navionics Inc. v. Flota Maritima Mexicana S.A. et al.
Published in English: 26 Federal Trial Reporter, 148

Article 8 is to be given a fairly strict interpretation and its imperative provision is an exceptional departure from the inherent
jurisdiction of the Court to grant stays of proceedings. However, in this case, the court refused to decide if article 8 had been
complied with and granted the stay based on its inherent jurisdiction.

A dispute arose between the parties concerning their obligations with respect to a standard-form charter party they had signed.
Flota Maritima moved to stay the proceedings brought by Navionics, relying on article 8 of the Model Law as enacted by the
Commercial Arbitration Act, Revised Statutes of Canada, 1985, c.C-34.6. The motion was adjourned and before it could be
heard, Navionics filed its own motion seeking default judgment against the defendant. The defendant was subsequently granted
two extensions in order to allow it to obtain an affidavit. After Flota Maritima was refused any further extension, it filed a
statement of defence in order to avoid being held in default.

The court granted the stay of proceedings sought by Flota Maritima. The court relied on section 50(1)(b) of the Federal Court
Act, Revised Statutes of Canada, 1985, c F-7, in granting the stay pursuant to its inherent jurisdiction. Article 8 is to be given
quite a strict interpretation.