Nortel Routers by default use standard ARP, Cisco use rfc1577 ARP. You can change this on the IP interface or through BCC. Failing this take a PCAP trace and have a look at the inbound encapsulation type, you should be using LLc/SNAP (RFC 1483).
Bestway to acheive bandwidth management is by using class maps & policy statements.e.g.class-map match-all default match any class-map match-all ftp match access group 101class-map match-all telnet match access group 102 policy-map XYZ class ft...
Use the nortel rotuer as the gateway, Open a telnet session to the Nortel poling the log:- log -fftwid -eOSPF. check the adjacent is still present 3-4 hours later. You should see the adjancy loose conection, ping the Cisco from the command line ...