October 17, 2015

An Overview of Ontario’s Arbitration Act, 1991

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Party Autonomy

The guiding principle behind Ontario’s Arbitration Act, 1991 (hereinafter the “Arbitration Act”) is party autonomy. Parties resolving disputes privately are able to design just about any process they want, subject to minimal Court oversight.

Arbitrations in Ontario

The Arbitration Act applies to domestic arbitrations in Ontario unless another act applies. For example, the Arbitration Act applies to family arbitrations where the Family Law Act also applies. But the Arbitration Act does not apply to labour arbitrations as the Labour Relations Act specifically states that the Arbitration Act does not apply.

Domestic vs. International

Ontario’s International Commercial Arbitration Act applies to international arbitrations conducted in Ontario. Note that 2 parties located in Ontario cannot simply say their dispute is international in order to fall under the International Commercial Arbitration Act, the Arbitration Act will apply most of the time if both parties are in Ontario.

SPPA does not apply

With a few exceptions concerning evidence, the Arbitration Act is completely distinct from the Statutory Powers and Procedures Act. An arbitral tribunal established under the Arbitration Act is therefore not subject to the Statutory Powers and Procedures Act.

Flexibility

Parties to an arbitration can agree to exclude most provisions of the Arbitration Act, except for Scott v. Avery clauses (an agreement requiring arbitration before Court), equality and fairness, Court-directed time extensions, Court intervention in limited circumstances (see sections 46 and 48 for details) and enforcement of arbitral awards in Court.

Arbitration agreements can be oral and can be amended by further agreement. Once a party attorns to the jurisdiction of an arbitrator, even if mistakenly, it is difficult to back out. If a party has committed to arbitration, any Court proceedings initiated by that party can be stayed.

Arbitrator

Parties can agree to arbitrate before any number of arbitrators. They can agree on a specific arbitrator or have one appointed by the Court. There are times when parties will want to appoint panels of multiple arbitrators with differing backgrounds, such as law and medicine. Arbitrators must be independent and impartial and disclose any circumstances that could give rise to a reasonable apprehension of bias. Arbitrators may be challenged for reasons of bias or a lack of necessary qualifications.

Starting an Arbitration

Arbitrations are commenced by one party serving a notice. Arbitral tribunals may rule on their own jurisdiction. They can determine procedure and the admissibility of evidence. An arbitral tribunal may appoint an expert if required. The arbitrator may issue a notice to witness, which has the effect of a summons. An arbitrator can administer an oath for a witness.

Awards

Arbitral tribunals must decide cases in accordance with the law, including equity and can order injunctions and other equitable remedies. Arbitral awards are binding and should be in writing with reasons, unless on consent. Awards may be amended within 30 days to correct minor errors or prevent injustices.

Appeals Optional

An arbitration agreement can eliminate appeals, including appeals on issues of law. Appeals can be made to the court if the agreement is silent on appeals. Arbitration agreements can provide for an appeal on questions of fact or mixed questions of fact and law. There are limited grounds to set aside an award, such as legal incapacity, invalid arbitration agreement, an issue is beyond the arbitration agreement, the composition of the arbitral tribunal is not right, the subject matter is not capable of being arbitrated (such as criminal law), a lack of fairness, misconduct by the arbitrator, or an award is obtained by fraud.

Enforcement

Arbitration awards may be enforced by the courts and the courts must give a judgment recognizing an award, subject to a few limitations. Arbitration awards may include costs, including legal fees and the cost of the arbitration. Furthermore, interest can be awarded.

Limitation Periods

Limitation periods are at play in arbitrations. If for any reason a decision of an arbitral tribunal is set aside, the time period during the arbitration may not form part of the time in computing the limitation period.

Creative Arbitrations

As indicated at the outset, much of the above is subject to party autonomy and parties can contract out of most of the Arbitration Act to determine their own process. This flexibility gives creative parties the opportunity to design an arbitration that will be fast, efficient and cost-effective.

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