Case number: 18
Article number: model arbitration law / 5; 8; 16
Thessaurs issue:
Country of decision: Canada
Year of decision: 1991
Type of decision: Judicial decision

Case 18: MAL 5; 8; 16
Canada: Ontario Court of Justice - General Division (Henry J.) 1 March 1991
Rio Algom Limited v. Sammi Steel Co.
Original in English

The interaction of articles 8 and 16 restricts the court's role in arbitrations to determining whether the arbitration clause is null
and void. Any determination of the arbitrator's jurisdiction is made by the arbitrator pursuant to article 16.

The parties agreed that Sammi would purchase Rio's steel manufacturing business in Ontario, Quebec and New York State.
The agreement provided that the parties each prepare a Closing Date Balance Sheet as soon as possible after closing.
Arbitration was provided for if the parties could not resolve any dispute arising out of the Closing Date Balance Sheets. Such a
dispute did arise. Sammi followed the required procedure and submitted the matter to an arbitrator. Rio commenced an action
in court challenging the jurisdiction of the arbitrator and seeking an order staying the arbitration proceedings. The Chambers
judge granted the order finding that the arbitrator's jurisdiction is a threshold issue of contract construction to be decided by the
court. Leave to appeal the Chambers judge's order was sought.

The court granted leave to appeal. It found that the Chambers judge's decision had been erroneously based on principles of
the domestic arbitration act rather than those found in the Model Law as enacted by the International Commercial Arbitration
Act, Statutes of Ontario, 1988, c.30. In particular the court cited article 16 which provides the arbitral tribunal with the power
to rule on its own jurisdiction. The court further noted article 8 which restricts court involvement to a determination of whether
the arbitration agreement is null and void.