Case number: 65
Article number: model arbitration law / 8(1)
Thessaurs issue:
Country of decision: Canada
Year of decision: 1988
Type of decision: Judicial decision

Case 65: MAL 8(1)
Canada: British Columbia Supreme Court (Mackoff J.) 28 November 1988
ODC Exhibit Systems Ltd. v. Lee, Expand International et al
. Published in English: 41 Business Law Reports, 286

The plaintiff, a British Columbia company, claimed damages from the defendants, including a former general manager of the
plaintiff and Expand International, a Swedish company which was the exclusive agent of the plaintiff in Canada, on the ground
that they had conspired, deceived and defrauded the plaintiff with a view to terminating the exclusive agency agreement
between the plaintiff and Expand International and giving it to the former general manager of the plaintiff. The defendant argued
that the court did not have jurisdiction since a breach of contract committed in Sweden was involved and, alternatively,
requested a stay of proceedings under s. 8 of the International Commercial Arbitration Act (ICAA, art. 8 MAL) on the basis
of an agreement, reached with the plaintiff after the dispute arose, containing an arbitration clause, which provided that "... any
dispute arising out of this agreement shall be settled by arbitration ...".

The court found that the plaintiff's action was founded on tort committed in Canada and thus established its jurisdiction. It was
found that conspiracy, deceit and fraud were not matters arising out of "this agreement". It was also found that these torts could
not have been agreed or even contemplated by the parties as matters that could be settled by arbitration since they were
committed before the conclusion of the arbitration agreement. It was thus held that the basic condition precedent for the
granting of a stay of proceedings under s. 8, namely that the court action must relate to a matter agreed to be arbitrated, was
not met. The court dismissed the defendant's application for a stay of the proceedings.