Ontario Superior Court of Justice Trials

An Overview of the Arbitration Act, 1991

If you’re not familiar with the Arbitration Act, 1991 S.O. 1991, c. 17 (the “Act“) or haven’t read it in awhile and need a refresher, this article may be a helpful read. Section numbers in the article refer to Act and from there you can dive deeper into the language of the Act, which should be consulted on important issues.

The Arbitration Agreement

An arbitration agreement can be inserted into a contract in case a dispute arises, or an arbitration agreement can be made after a dispute arises. The Act and this article applies to domestic arbitrations (s. 2) whereas Ontario’s International Commercial Arbitration Act applies to international arbitration. Some issues cannot be arbitrated, for example, criminal law. But most private disagreements in civil or family matters can be arbitrated. In family matters, the Family Law Act also applies (s. 2.1). The only regulation under the Act as of the date of this article applies to family arbitration. The additional requirements for family law arbitration are not covered by this article, which focuses on civil and commercial arbitration. Adjustments to the Arbitration Act, 1991 for family arbitration is in our article Family Arbitration.

An arbitration agreement can be set up in just about any manner the parties wish. The Act will apply unless the parties contract out of it. There are only limited issues the parties cannot contract out of (s. 3): Scott v. Avery clauses (requiring arbitration before Court), equality and fairness, extension of time limits, setting aside an award due to, for example, unfairness, the right to seek a declaration of the arbitration’s invalidity and Court enforcement.

An arbitration agreement may be an independent agreement or form part of another agreement (s. 5).

Court Intervention

Courts generally uphold and respect the rights of parties to determine how to deal with disagreements – a concept is known as “party autonomy”. Courts will generally not intervene in an arbitration, but can have some involvement in the following ways:

  • Assist with arbitration and ensure it is done fairly and in accordance with the arbitration agreement (s. 6);
  • Enforce arbitration awards (s. 6 and s. 50);
  • Stay Court proceedings where there is an arbitration agreement, subject to certain exceptions (s. 7);
  • Make orders regarding property and injunctions (s. 8);
  • Appointing an Arbitrator in the absence of an agreement (s. 10);
  • Appeals on questions of law (unless precluded by agreement) (s. 45); and
  • Setting aside an award.

Who Will be the Arbitrator(s)?

Although there are no formal education or work requirements to become an Arbitrator, most have extensive education and experience in the subject matter of the Arbitration. Most Arbitrators are lawyers and retired Judges, but there is good reason to look outside the legal field to other areas of expertise. For example, an engineer may be well-suited to arbitrate a complex construction matter. Or perhaps the Arbitral Tribunal should have a lawyer to handle due process aspects plus an engineer for specialised knowledge. There can be one or more Arbitrators, but the most common scenario is to have one. If the arbitration agreement is silent on how many Arbitrators, then there is one (s. 9).

An arbitration agreement can identify the Arbitrator or set out a process for determining who will be the Arbitrator. If the agreement does not do name an Arbitrator or outline a selection process, it is up to the parties to agree on an Arbitrator or a party can ask the Court to appoint one (s. 10).

The Arbitrator must be independent of the parties and act impartially (s. 11). An Arbitrator can be challenged for bias or lack ofqualifications (s. 13). The Arbitrator decides the issue at first instance, which decision may be appealed to Court (s. 13) if the agreement grants the right of appeal or is silent on appeals of questions of law (more on appeals below).

Arbitral Tribunal’s Jurisdiction

An Arbitrator’s jurisdiction relates to what issue(s) the Arbitrator can and cannot decide.

The Arbitrator can rule on its own jurisdiction to conduct the arbitration and any objections to the existence or validity of the arbitration agreement (s. 17(1)). In a ruling on jurisdiction, where there is an arbitration agreement within another agreement, the arbitration agreement shall be treated as an independent agreement. This may mean that challenges to the validity of the agreement as a whole such as a shareholders’ agreement with an arbitration clause, do not invalidate the decision to agree upon arbitration as a dispute resolution mechanism.

What Procedure will be Followed?

The process must be equal and fair (s. 19).

Unless the arbitration agreement sets out the procedure to be followed and the parties do not otherwise have an agreement on process, the Arbitrator decides (s. 20). The Arbitrator can follow a process similar to Court, but most will opt for something more streamlined that is suitable for issues in dispute, which generally do not call for the robust rules of Court.

Sections 14, 15 and 16 of the Statutory Powers and Procedures Act apply to arbitrations (s. 21 of the Act). These sections permit witnesses to avoid self-incrimination, permit the admission of any testimony or document into evidence regardless of it being under oath and Arbitrators can take judicial notice of any facts and any scientific or technical facts within its knowledge (an engineer as Arbitrator can apply their engineering expertise).

The venue for the Arbitration can be anywhere, including in person, by video conference or at a work site (in a construction case). Or any combination (s. 22).

Arbitration starts or commences when either party takes the steps necessary as set out in the arbitration agreement and/or serves one of the notices set out in section 23 of the Act. For more information on the commencement of arbitration, please consult our article on How to Start an Arbitration.

The next step after serving notice of arbitration and appointing an Arbitrator is that the Arbitrator will usually requests “statements” from both parties, which set out the facts, points at issue and relief sought (s. 25). These can be amended or supplemented from time to time, unless unduly delayed.

No hearing is mandatory unless the Arbitrator orders it or a party requires one (s. 26). Otherwise the arbitration may take place in writing.

An Arbitrator may appoint an expert if needed (s. 28), which expert may be examined by the parties, who can introduce their own experts in response.

An Arbitrator can summons a witness (s. 29).

Arbitration Awards

An arbitral “award” is the decision of the Arbitrator. In a Court, the equivalent is a “judgment”.

An Arbitrator must act in accordance with the law: both common law and equity and can make orders for specific performance, injunctions and equitable remedies (s. 31).

The parties can decide which laws apply (it can be the laws of any Country, Province or State) or the Arbitrator can decide (s. 32).

The Arbitrator shall not participate in mediation or conciliation (s. 35). This is something the parties can otherwise contract out of, according to their own preferences regarding mediation-arbitration, which is a contentious subject as it asks one person to perform two very different roles.

An award shall be in writing and provide reasons, unless the parties agree not to have reasons (s. 38). Parties may decide not to have reasons as that makes the arbitration more cost-effective. Writing reasons is a lot of work. Reasons may be of interest to the parties, especially if there may be an appeal, but for many disagreements there only needs to be a 1-page or 1-paragraph award saying who pays who and how much.

An Arbitrator may be asked to explain their award (s. 40).

An Arbitrator may make interim awards (s. 41).

The arbitration is terminated or ends when there is a final award disposing of all matters, the Arbitrator terminates the arbitration for delay or when an Arbitrator’s mandate ends and there is an arbitration agreement that the particular Arbitrator is to be the only Arbitrator (s. 43).

An Arbitrator may correct their award (s. 44) in some limited circumstances.


An arbitration agreement can set out that there is no right of appeal on questions of fact or law.

If the arbitration agreement does not specify there to be no right of appeal, then there can be an appeal on a questions of law, so long as the question of law is important and may significantly alter the rights of the parties (s. 45).

Appeals can in theory be agreed to be made to a different Arbitrator, a panel of Arbitrators or the Courts.

A party can apply to the Court within 30 days to set aside an Arbitration award on a number of grounds such as legal incapacity, invalid arbitration agreement, beyond scope, improper Arbitral Tribunal composition, subject matter not capable of arbitration, unequal treatment, procedure not complying with the Act, and fraud (s. 46 and s. 47).


There are a few note-worthy sections of the Act towards the end.

Limitation periods apply to arbitrations (s. 52).

Manner of service is addressed (s. 53). The Act does not yet contemplate email, but the parties can agree to serve by email.

An Arbitrator can award costs: both costs for legal fees, disbursements and HST as well as costs associated with the Arbitrator’s fees (s. 54).

Offers to settle can affect costs (s. 54(5)).

An Arbitrator’s fees and expenses must reflect fair value (s. 55) and can be assessed in the manner provided for in the Solicitors Act (s. 56).

Interest can be in accordance with a contract or the Courts of Justice Act (s. 57).

More on Arbitration

For more information on arbitration, please check out the following articles:

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