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Case 71: MAL 9
Canada: British Columbia Supreme Court (Bouck J.)
25 February 1994
Trade Fortune Inc. v. Amagalmated Mill Supplies Ltd.
Original in English
Unpublished
The plaintiff, a Greek shipowner, claimed payment of demurrage costs on the ground that the defendant, a Canadian charterer, was responsible for a delay in unloading a cargo in Korea. The plaintiff sought and obtained an interim court order designed to secure funds for payment of the claim upon issue of a final decision. The defendant paid into court the full amount of the claim, but sought that the matter be referred to arbitration in London pursuant to an arbitration clause contained in the charterparty, litigation be stayed and the interim order be set aside. The plaintiff agreed to the reference to arbitration and stay of proceedings but objected to the setting aside of the interim court order.
There were two main issues; first, whether interim measures of protection that could be
taken by courts (article 9 MAL) included the interim order granted in the present case or
whether such an order could be granted only by the arbitral tribunal dealing with the
substance of the dispute (article 17 MAL); and second, whether staying the procedures had
the effect of setting aside the interim order. On the first issue, the court, referring to
the travaux préparatoires of MAL, held that interim court orders designed to
protect the applicant from the risk of being unable to enforce a final arbitral award were
not incompatible with arbitration (article 9 MAL). The application of the defendant to set
aside the interim court order was thus dismissed. On the second issue, the court found
that staying the proceedings would not set aside the interim order since the original
claim of the plaintiff would not merge into the arbitration award and the plaintiff was
thus not prevented from pursuing its claim until it was paid in full. The court ordered a
stay of proceedings and dismissed the application of the defendant to set aside the
interim court order.
Additional Information published in later CLOUT issue (on "16 August 1996"):
Full text published in English: The Arbitration and Dispute Resolution Law Journal, 1996, 6, 132
Additional Information published in later CLOUT issue (on "9 February 2000"):
Abstract published in English: [1996] Model Arbitration Law Quarterly Reports, Vol. 2, issue 2, 43
Text of the court decision published in English: [1996] Model Arbitration Law Quarterly Reports, Vol. 2, issue 2, 47
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