T-6-81
John Helmsing Schiffahrtsgesellschaft M.b.H.
(Applicant)
v.
Marechart Limited (Respondent)
Trial Division, Walsh J.—Montreal, March 2;
Ottawa, March 6, 1981.
Maritime law — Practice — Enforcement of foreign mari
time arbitration award — Applicant seeking to enforce arbi
tration award made in England by originating notice of motion
— Applicant relying on "gap" Rule 5 — Whether such an
award can only be enforced by an action in this Court rather
than by means of an originating notice of motion — Applica
tion granted — Since this Court has jurisdiction both over the
respondent and the subject-matter of enforcing the award, a
motion is sufficient to homologate it — Federal Court Rule 5
— Code of Civil Procedure, art. 950.
Eurobulk Ltd. v. Wood Preservation Industries [1980] 2
F.C. 245, distinguished.
MOTION.
COUNSEL:
Gerald Barry for applicant.
Philippe M. Gariépy for respondent.
SOLICITORS:
McMaster Meighen, Montreal, for applicant.
David F. H. Marler, Montreal, for respond
ent.
The following are the reasons for order ren
dered in English by
WALSH J.: The only issue in this motion is the
procedure adopted by applicant in seeking to
enforce an arbitration award, made in England.
Counsel for respondent does not dispute the juris
diction of the arbitrators to make the award, nor
the amount of the award which was made, but
contends that the enforcement of it should be by
means of an action brought in this Court as was
done in the case of Eurobulk Ltd. v. Wood Preser
vation Industries [1980] 2 F.C. 245, which held
that this Court has jurisdiction to render judgment
to enforce such an award. Respondent does not
dispute this.
Applicant in the present proceedings however
seeks to enforce the award by the present originat
ing notice of motion invoking the "gap" Rule 5
since it is not spelled out in the Rules of this Court
how an award should be enforced. The charterpar-
ty was made in Quebec for shipments from Nova
Scotia and Prince Edward Island. Since article 950
of the Quebec Code of Civil Procedure, section 14
of the Arbitration Act of Nova Scotia (R.S.N.S.
1967, c. 12) and section 13 of the similar Prince
Edward Island Act [Arbitration Act, R.S.P.E.I.
1974, c. A-14] all would permit the Courts of the
Province to enforce an arbitration award it is not
necessary to determine in which province the
subject-matter of the proceedings most particular
ly relates.
The question arises as to whether article 950 of
the Quebec Code of Civil Procedure only applies
to arbitration awards made in Quebec. In an
article entitled [TRANSLATION] "Some Questions
of Procedure in Quebec Private International
Law" ((1971) 31 R. du B. 134) written as part of
a text being prepared on Quebec private interna
tional law, J. G. Castel considers the question,
stating that Quebec public order is not opposed to
the recognition of arbitration clauses valid under
Quebec law or the foreign law governing them.
Under article 950 the tribunal homologating the
award cannot inquire into its merits, unlike the
procedure under Code of Civil Procedure, article
178 for homologation of a foreign judgment. In an
article entitled [TRANSLATION] "An Urgent
Reform: Execution of Foreign Judgments in Que-
bec" ((1978) 38 R. du B. 127), Ethel Groffier,
professor at McGill University reaches the same
conclusion. The British case of Dalmia Cement
Ltd. v. National Bank of Pakistan [1974] 3 All
E.R. (Q.B.D.) 189 also found in favour of enforce
ment in England by summary procedure of a
foreign arbitration award.
In the present case the arbitration award
became final on publication by the arbitrator pur
suant to English common law as confirmed by
section 16 of the British Arbitration Act, 1960.
Applicant at the hearing amended the motion so
that in place of seeking interest on $5,838.24 from
January 6, 1977 "at 12.50% p.a.", this should now
read "at 8.00% p.a. to February 15, 1980, and
thereafter at 12.50% p.a." so as to correspond with
the terms of the award.
Since, if the present application were dismissed
applicant would then merely have to commence an
action seeking the same judgment, all that
respondent can gain by contesting is further delay
although most probably at the risk of increased
costs, together with costs of successfully contesting
this application. This is not to say that respond
ent's contestation is unjustified or without merit,
however, and the issue is an important one with
respect to future procedure for enforcement of
such arbitration awards which is a situation which
may occur with some frequency.
As Dubé J. points out in the Eurobulk case
(supra) admiralty jurisdiction over arbitrations
and on the enforcing of awards was conferred by
section 23 of The Admiralty Jurisdiction Court
Act, 1861, 24 & 25 Vict., c. 10. This statute was
adopted by the Colonial Courts of Admiralty Act,
1890, 53 & 54 Vict., c. 27 and is referentially
incorporated by section 2 of the Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10 (see Trop-
wood A.G. v. Sivaco Wire & Nail Co. [ 1979] 2
S.C.R. 157).
There is no Canadian Arbitration Act. Dubé J.
states at pages 248-249:
The plaintiff decided not to go the full route provided by the
British Act but to sue in a Canadian Court, as defendant has
assets in this country and presumably none in England.
If an award were a foreign judgment issued out of a court of
law, the Federal Court of Canada would have no jurisdiction to
enforce it. Unlike England, Canada is not a unitary state and
the provinces of this country hold, as mentioned before, exclu
sive jurisdiction over the enforcement of foreign judgments.
But such is not the case here. Basically, plaintiffs claim is a
claim arising out of a charterparty agreed to by the two parties
to this action. Both parties also agreed to be bound by an
award. The award has been granted and is now outstanding as
between the two. "An action upon an award is in substance an
action to enforce an agreement, the agreement being implied in
the submission to arbitration, that the parties will pay that sum
or do that thing which is awarded by the arbitrator".
As stated the issue between the parties on the
present application is not that this Court does not
have jurisdiction, but whether the British arbitra
tion award can only be enforced by an action in
this Court rather than by means of an originating
notice of motion. The Eurobulk judgment is
merely authority for the proposition that it can be
enforced by an action but did not have to consider
whether the same result would not be obtained by
an originating notice of motion.
There is very little in the Rules of this Court to
indicate when proceedings may be brought by an
originating notice of motion, which is why appli
cant seeks to apply Rule 5 which reads as follows:
Rule 5. In any proceeding in the Court where any matter arises
not otherwise provided for by any provision in any Act of the
Parliament of Canada or by any general rule or order of the
Court (except this Rule), the practice and procedure shall be
determined by the Court (either on a preliminary motion for
directions, or after the event if no such motion has been made)
for the particular matter by analogy
(a) to the other provisions of these Rules, or
(b) to the practice and procedure in force for similar pro
ceedings in the courts of that province to which the subject
matter of the proceedings most particularly relates,
whichever is, in the opinion of the Court, most appropriate in
the circumstances.
While it has frequently been held that this is a
Rule which should not be applied too freely so as
to introduce into the procedure of this Court pro
cedural rules of the various provinces merely
because the Rules of this Court do not provide
similar procedures, it is nevertheless fundamental
that rules of practice are intended to rationalize
and facilitate the hearing of matters requiring a
judgment. There appears to be no advantage in
insisting that an arbitration award within the juris
diction of this Court should necessitate the bring
ing of an action to enforce same, when it can
readily be enforced, as in the Province of Quebec
by a simple motion.
Article 950 of the Quebec Code of Civil Proce
dure reads as follows:
950. The award of arbitrators can only be executed under the
authority of a court having jurisdiction, and upon motion for
homologation to have the party condemned to execute it.
The court before which such suit is brought may examine
into any grounds of nullity which affect the award or into any
other questions of form which may prevent its being homolo-
gated; it cannot, however, enquire into the merits of the
contestation.
Applicant contends, and I agree, that since this
Court has jurisdiction both over the respondent
and the subject-matter of enforcing the award, a
simple motion should be sufficient to homologate
it. (It is of interest to note that in Britain by the
Arbitration Act, 1889, 52 & 53 Vict., c. 49 it is
provided in section 12 that "An award on a sub
mission may, by leave of the Court or a judge, be
enforced in the same manner as a judgment or
order to the same effect".)
While this application is breaking new ground it
appears to me to be desirable to simplify procedure
in so far as it is possible to do so without prejudice.
An order will therefore issue as prayed for sub
ject to the amendment made, with costs.
ORDER
Leave is hereby given to execute the arbitration
award dated February 15, 1980, between applicant
and respondent for the sum of $10,694.04 together
with interest on $5,838.24 from January 6, 1977,
at 8.00% p.a. to February 15, 1980, and thereafter
at 12.50% p.a. and on $2,020.93 from 15th Febru-
ary, 1980, and on $2,834.87 from 16th June, 1980,
both at the rate of 12.50% p.a., interest on all the
said sums to accrue until payment as well after
judgment as before, the whole with costs of the
present proceedings, to be taxed against respond
ent.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.