Nothing about award was contrary to principles of contract law

Ontario civil | Arbitration


Nothing about award was contrary to principles of contract law

Applicant ordered seeds from respondent and made partial payment of $62,460.80. Respondent delivered seeds, but applicant complained about quality and respondent took them back and re-cleaned them and sought $51,330.25 balance owing. When payment was not made, respondent marketed and sold seeds to company in China without applicant’s knowledge. Applicant applied for arbitration as provided for by contract and parties agreed to be bound by decision. Arbitrator found application for arbitration was made within 30 days of breaking of negotiations, so was on time under the Normaseed Rules, which parties agreed applied to their contract. Arbitrator found both parties breached contract as applicant only paid for part of crop and respondent sold seeds without authorization. Arbitrator ordered respondent to refund money paid by applicant with interest and parties to share costs of arbitration. Application for order recognizing arbitration award, which respondent had refused to comply with on the basis arbitrator exceeded his jurisdiction in ordering return of partial payment after finding both parties breached contract. Application granted. Contract provided any breach would be settled by arbitration in accordance with Rules, so it was clearly not the case that the arbitrator exceeded his jurisdiction by arriving at decision upon finding breaches occurred. Contract did not impose limits on arbitrator beyond Rules, and Rule VIII(2)(b) stipulated equitable solution would be determined where there was dispute over quality, which was exactly what had occurred. Parties did not waive contract and nothing about award was contrary to principles of contract law. Award recognized pursuant to Article 36(a)(iii) of International Commercial Arbitration Act (Ont.).
Proseeds Marketing Inc. v. Power Seed Inc. (Apr. 11, 2014, Ont. S.C.J., Andre J., File No. Guelph 918/13) 239 A.C.W.S. (3d) 844.

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