Karlsen Shipping Company v. Sefel J. & Associates Ltd., (1977) 4 A.R. 242 (TD)

• Judge: Moshansky, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 03, 1977
• Citations: (1977), 4 A.R. 242 (TD)

Karlsen Shipping Co. v. Sefel & Assoc. (1977), 4 A.R. 242 (TD)

MLB headnote and full text

Karlsen Shipping Company v. Sefel J. & Associates Ltd.

Indexed As: Karlsen Shipping Company v. Sefel J. & Associates Ltd.

Alberta Supreme Court

Trial Division

Judicial District of Calgary

Moshansky, J.

February 3, 1977.

Summary:

This case arose out of the plaintiff's claim against the defendant for damages under a charter agreement. The agreement contained a provision for the submission of disputes under the agreement to binding arbitration. The plaintiff brought an action against the defendant under the agreement. The defendant filed a defence and counterclaim against the plaintiff. The plaintiff applied for a stay of the counterclaim on the ground that the counterclaim should be submitted to arbitration under the agreement. The dispute involved damage claims of nearly $3,000,000.00, questions of negligence, conflicts of laws and interpretation of contracts and touched complex areas of law which would require repeated references to the court by arbitrators.

The Alberta Supreme Court, Trial Division, dismissed the application and held that both the claim and the counterclaim should be heard by the court.

The Trial Division held that the plaintiff could not apply for a stay because by issuing its statement of claim it had delivered a pleading within the meaning of s. 4(1) of the Arbitration Act and, further, that by cross-examining an officer of the defendant on an affidavit the plaintiff had taken another step in the proceeding within the meaning of s. 4(1) - see paragraphs 11 to 12.

The Trial Division held that the plaintiff waived its right to arbitration by commencing an action against the defendant and that the defendant accepted the waiver by filing a defence and counterclaim - see paragraphs 15 to 16.

The Trial Division held in any event that the claim and the counterclaim should be heard by the court, because it was undesirable for such a complex matter to be heard by two different tribunals and because the issues could be better dealt with by a court of law, particularly where a discovery process was necessary - see paragraphs 16 to 21.

Arbitration - Topic 2503

Stay of proceedings - Arbitration clause defined - The Alberta Supreme Court, Trial Division, held that a simple agreement to submit disputes to binding arbitration was an ordinary arbitration clause as opposed to a Scott v. Avery clause - See paragraph 9.

Arbitration - Topic 2511

Stay of proceedings - Bar to stay - Taking a "step in the proceeding" - Arbitration Act, R.S.A. 1970, c. 21, s. 4 - The plaintiff brought an action against the defendant under a contract which contained an arbitration clause - The defendant filed a defence and counterclaim - The plaintiff applied for a stay of the counterclaim on the ground that the counterclaim should be submitted to arbitration - The Alberta Supreme Court, Trial Division, dismissed the application and held that the plaintiff could not apply for a stay, because by issuing its statement of claim it had delivered a pleading within the meaning of s. 4(1) of the Arbitration Act - Further, the Trial Division held that by cross-examining an officer of the defendant on an affidavit the plaintiff had taken another step in the proceeding within the meaning of s. 4(1) - See paragraphs 11 to 12.

Arbitration - Topic 2513

Stay of proceedings - Bar to stay - Waiver of right to arbitration - The plaintiff brought an action against the defendant under a contract which contained an arbitration clause - The defendant filed a defence and counterclaim - The plaintiff applied for stay of the counterclaim on the ground that the counterclaim should be submitted to arbitration - The Alberta Supreme Court, Trial Division, held that the plaintiff waived its right to arbitration by commencing an action against the defendant and that the defendant accepted the waiver by filing a defence and counterclaim - See paragraphs 15 to 16.

Arbitration - Topic 2514

Stay of proceedings - Bar to stay - Multiplicity of proceedings - The plaintiff brought an action against the defendants under a contract which contained an arbitration clause - The defendant filed a defence and counterclaim - The plaintiff applied for a stay of the counterclaim on the ground that the counterclaim should be submitted to arbitration - The dispute involved damage claims of nearly $3,000,000.00, questions of negligence, conflicts of laws and interpretation of contracts and touched complex areas of law which would require repeated references to the court by arbitrators - The Alberta Supreme Court, Trial Division, held that the claim and the counterclaim should be heard by the court, because it was undesirable for such a complex matter to be heard by two different tribunals and because the issues could better be dealt with by a court of law, particularly where a discovery process was necessary - See paragraphs 17 to 21.

Arbitration - Topic 2515

Stay of proceedings - Bar to stay - Arbitration proceedings inadequate - The plaintiff brought an action against the defendant under a contract which contained an arbitration clause - The defendant filed a defence and counterclaim - The plaintiff applied for stay of the counterclaim on the ground that the counterclaim should be submitted to arbitration - The Alberta Supreme Court, Trial Division, held that the claim and the counterclaim should be heard by the court, because a discovery process was necessary, which could not be provided by an arbitration tribunal - See paragraph 20.

Cases Noticed:

Scott v. Avery (1856), 5 H.L. Cas. 811, dist. [para. 9].

Shirley Ford Sales Ltd. v. Franki of Canada Limited, 55 W.W.R.(N.S.) 34, refd to. [para. 9].

Deuterium of Canada Ltd. et al. v. Burns and Roe Inc. (1974), 1 N.R. 607; 44 D.L.R.(3d) 693 (S.C.C.), refd to. [para. 9].

Vallorbe Shipping Co. S.A. v. The Ship M.V., [1975] F.C. 595, folld. [para. 16].

Mobil Oil Canada Ltd. v. Pan West Engineering Construction Ltd., [1973] 1 W.W.R. 412, refd to. [para. 19].

Halifax Overseas Freighters Ltd. v. Rasno Export et al., [1958] 2 Lloyds List Law Reports 146, refd to. [para. 19].

Statutes Noticed:

Arbitration Act, R.S.A. 1970, c. 21, sect. 4 [para. 11].

Counsel:

T.F. McMahon, for the applicant;

F. Saville and G.S. Scott, for the respondent.

This case was heard at Calgary, Alberta, before MOSHANSKY, J., of the Alberta Supreme Court, Trial Division, Judicial District of Calgary.

On February 3, 1977, MOSHANSKY, J., delivered the following judgment: