CLOUT
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Where an arbitration occurs outside of Canada, pursuant to article 1(2), articles 5 and 16 will not apply.

GPA (a German corporation) entered into a contract with Mareda (a U.S.A. company) to design, manufacture, deliver and put into operation a transfer system. This contract contained references to general conditions (ECE 188), which contained a clause referring disputes to arbitration. The arbitration terms provided for reference of any dispute to the International Chamber of Commerce for resolution through the application of the arbitration conditions of the Economic Commission for Europe (ECE). Mareda assigned the contract to Deco, a Canadian company. Deco refused to pay following disputes with GPA and sued in court for damages. GPA moved to have the action stayed.

The court dismissed the motion finding that the reference to arbitration in the ECE rules did not cover the areas in dispute between the parties. Furthermore, the court ruled that where the arbitration is in Canada, then the matter may proceed as set out in Article 16, but where it is not (as in the present case) then article 16 does not apply by virtue of article 1(2). Also based on article 1(2), article 5 of the Model Law restricting judicial intervention does not apply because the place of arbitration is not in Canada.

Additional Information published in later CLOUT issue (on "9 February 2000"):

Abstract published in English: [1995] Model Arbitration Law Quarterly Reports, Vol. 1, issue 1, 121

Text of the court decision published in English: [1995] Model Arbitration Law Quarterly Reports, Vol. 1, issue 1, 126

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