Court Declines Stay - Case highlights need for clearly worded arbitration clause

In Nizamov v 1861398 Alberta Ltd.2016 ABQB 401, Master Robertson declined to stay litigation in the face of a poorly-worded arbitration clause. He cited “the delay in relying on the arbitration clause, the scope of the dispute, and the parties involved” as reasons to dismiss the stay application.

The arbitration clause said:

The Owner and the Contractor agree that in the event of a dispute as to the interpretation of this Contract or the extent of the Work, the issues shall be submitted to provincial/territorial Consumer Affairs office.  Failing a resolution both parties agree to submit to binding arbitration by an independent arbitrator or [sic] under the province’s arbitration statute. [Italics are mine–good luck getting a “Consumer Affairs” office to resolve the dispute!]

The parties could have used the model dispute resolution clause in the ADR Institute of Canada’s Arbitration Rules:

All disputes arising out of or in connection with this agreement, or in respect of any legal relationship associated with or derived from this agreement, will be finally resolved by arbitration under the Arbitration Rules of the ADR Institute of Canada, Inc. [or the Simplified Arbitration Rules of the ADR Institute of Canada, Inc.] The Seat of Arbitration will be [specify]. The language of the arbitration will be [specify].

This clause meets international standards. Use of the ADRIC Arbitration Rules is not required.

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