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Case 358: MAL: 36(1)
Canada: British Columbia Supreme Court (Sinclair Prowse J.)
May 11, 1998
Canadian National Railway Co. v. Southern Railway of British Columbia Ltd.
Original in English
Published in English: [1998] B.C.J. No. 1097
The parties entered into an agreement with Johnson & Johnson Inc. by which CNR agreed to transport Johnson & Johnson's goods from Quebec to Alberta, and Southern agreed to transport the goods from Alberta to British Columbia. A fire occurred and some of Johnson & Johnson's goods were destroyed while in transit. CNR paid Johnson & Johnson compensation for the full loss of the goods. As per the agreement between CNR and Southern, the issue of responsibility was to be resolved by arbitration by the Association of American Railways. The arbitrators held that Southern was fully responsible for the loss but Southern refused to pay the balance of the amount paid by CNR to Johnson & Johnson, alleging, inter alia, that the arbitration committee's decision had been made on the basis of jurisdictional error or a breach of natural justice.
The Supreme Court rejected Southern's objections to enforcement although it accepted that these objections were available under the International Commercial Arbitration Act (no specific provisions were cited). It held that the rules of the A.A.R. were complied with in terms of establishing the jurisdiction of the arbitration committee and that no breach of natural justice occurred since the committee was presented with evidence and answered the only question posed to it.
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