Lien Claim Referred to New Jersey Arbitrator - Party Autonomy Affirmed

Master Robertson of the Alberta Court of Queen’s Bench decided in West Coast Installations, Inc. v. Frazier Industrial Co.  that a collection action involving enforcement of a claim under the Builders’ Lien Act should be referred to arbitration in New Jersey, just as the contract between the parties provided.

The defendant’s Statement of Defence (coupled with a Counterclaim) stated that the action was barred by the arbitration provision in the contract. The International Commercial Arbitration Act applied, so Master Robertson discussed the impact the UNCITRAL Model Law and Convention. He concluded that the Statement of Defence satisfied the defendant’s obligation to “not later than when submitting his first statement on the substance of the dispute” request that the matter be referred to arbitration.

Master Robertson noted that the contract requiring arbitration in New Jersey and applying New Jersey law did not mean the Alberta court has no jurisdiction—the Builders’ Lien Act is clear that parties cannot contract out of its remedies.

The court stayed the action, but declared the security posted by the landowner pursuant to the Builders’ Lien Act was to remain in place and would be dealt with as appropriate after the conclusion of the arbitration or upon settlement.

The decision includes a helpful review of the cases dealing with the UNCITRAL Model Law and the Convention and also the compatibility of arbitration with builders’ liens.

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