The structure rewards parties who understand it and punishes those who do not. A party who objects late is deemed to have waived the objection. A party who files a counterclaim and then disputes the tribunal’s jurisdiction has been held to have agreed to it. A party who wins before the arbitrator may lose before the court, because the court does not defer to the arbitrator’s ruling but hears the matter afresh. And a party who loses before the court has nowhere else to go, since the Court of Appeal has quashed one attempt after another to appeal a s. 17(8) decision. This article takes the subject in order, from the source of the arbitrator’s authority to the position after the award, and closes with the steps that decide most jurisdictional contests before they reach a judge.

The source of the arbitrator’s jurisdiction

The starting point is consent. As Centa J. put it in Ontario (Minister of Northern Development, Mines, Natural Resources and Forestry) v. HugoMB Contracting Inc., 2023 ONSC 3513 (“HugoMB”), at ¶ 81, “[a] privately appointed arbitrator has no inherent jurisdiction. Her jurisdiction comes only from the parties’ agreement,” and while the parties “have ‘virtually unfettered autonomy’ in identifying the disputes that may be the subject of the arbitration proceeding,” the corollary is that “no party can be compelled to submit to arbitration a dispute other than the one they agreed to arbitrate.” Diamond J. said the same in Covanta Durham York Renewable Energy Partnership v. Barton-Malow Canada Inc., 2016 ONSC 2044 (“Covanta”), at ¶ 37, stating, “[a]n arbitral tribunal possesses jurisdiction to decide disputes between parties due to the common intention of those parties who agree to be bound by the arbitral process,” a passage the Court of Appeal adopted when it quashed the appeal in Covanta Durham York Renewable Energy Limited Partnership v. Barton-Malow Canada Inc., 2016 ONCA 558 (“Covanta (C.A.)”), at ¶ 16. Iacobucci J. restated the point in 1171757 Ontario Ltd. v. 1171758 Ontario Ltd., 2026 ONSC 4414 (“Kaptyn”), at ¶ 59, stating, “[a]rbitrators do not have inherent jurisdiction but rather must derive jurisdiction from either statute or contract,” so that “[t]he disagreements about jurisdiction are therefore to be resolved by interpreting the partnership agreement.”

Two (2) provisions of the Act shape that inquiry. Section 5 allows the arbitration agreement to be an independent agreement or part of another agreement, deems a further agreement made in connection with the arbitration to form part of it, and dispenses with writing. Section 17(2) enacts the separability principle, stating, “[i]f the arbitration agreement forms part of another agreement, it shall, for the purposes of a ruling on jurisdiction, be treated as an independent agreement that may survive even if the main agreement is found to be invalid.” Separability means that an allegation that the main contract was procured by misrepresentation does not of itself defeat the arbitration clause, a point the Court of Appeal made in Haas v. Gunasekaram, 2016 ONCA 744 (“Haas”), at ¶ 39, stating, “in cases involving arbitration agreements, fraud does not necessarily vitiate everything. It is a matter of interpretation.” It does not, however, save a clause in a document the objecting party never signed, as the forgery case discussed below shows.

Competence-competence and section 17(1)

Section 17(1) is Ontario’s codification of the competence-competence principle, under which, in the words of the Supreme Court of Canada in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”), at ¶ 70, “arbitrators should be allowed to exercise their power to rule first on their own jurisdiction.” The principle was developed in cases decided under the Model Law and the legislation modelled on it, and in Ontario Medical Assn. v. Willis Canada Inc., 2013 ONCA 745 (“Willis”), the Court of Appeal held that it applies equally to domestic arbitrations under the Act. Sharpe J.A. found at ¶ 30 that “[t]he power conferred on a court to grant a stay and the power of the arbitrator to determine his or her own jurisdiction are substantially the same under both regimes,” and concluded at ¶ 37 that “absent legislative language or binding authority pointing in another direction, I would hold that it applies to the Arbitration Act, 1991.” The Supreme Court confirmed the point for Ontario in Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”), at ¶¶ 31-32, and restated the rationale in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41 (“Peace River”), at ¶ 41, which Kurz J. quoted in Saugeen Shores (Town) v. 2706913 Ontario Inc., 2026 ONSC 4927 (“Saugeen Shores”), at ¶ 35, as follows, “[t]his reflects the presumption that arbitrators have fact-finding expertise comparable to that of courts, and that the parties intended an arbitrator to determine the validity and scope of their agreement.”

The practical effect is a rule of priority. Where a party sues despite an arbitration clause and the other moves to stay under s. 7, the court asks only whether it is arguable that the dispute falls within the agreement, and if it is, the court stays the action and leaves the jurisdictional question to the arbitrator. The framework comes from Haas at ¶ 17 and from Dalimpex Ltd. v. Janicki (2003), 64 O.R. (3d) 737 (C.A.) (“Dalimpex”), at ¶ 21, which adopted the statement that “it is not for the court on an application for a stay of proceedings to reach any final determination as to the scope of the arbitration agreement or whether a particular party to the legal proceedings is a party to the arbitration agreement, because those are matters within the jurisdiction of the arbitral tribunal.” In Willis, the plaintiff said it had never been a party to the agreement containing the clause, and the motion judge nonetheless stayed the action, finding “an arguable case that the OMA and its claim were governed by the arbitration clause,” making “no determination that the OMA was a party to the arbitration agreement” and “leaving that issue to be decided by the arbitrator” (¶ 12). The same approach governs a party who goes to court first to have the arbitration restrained. In NetSys Technology Group AB v. Open Text Corp., 1999 CanLII 14937 (S.C.J.), Stinson J. refused an injunction limiting the scope of an arbitration, holding at ¶ 40 that “the question of the scope of the authority conferred upon the arbitrator by the parties’ arbitration clause is to be decided by the arbitrator,” and in Saugeen Shores, decided in August 2026, Kurz J. dismissed a municipality’s application for a declaration that its dispute with its lessee was not arbitrable, holding at ¶ 43 that “the issue of the arbitrability of the issues in dispute between the parties must first be determined by an arbitrator selected pursuant to art. 13.1 of the Lease.”

The priority is one of sequence rather than of deference. As the Court of Appeal explained in Russian Federation v. Luxtona Limited, 2023 ONCA 393 (“Luxtona”), at ¶ 34, competence-competence “does not require any special deference be paid to an arbitral tribunal’s determination of its own jurisdiction,” and is “best understood as ‘a rule of chronological priority’ rather than as ‘empowering the arbitrators to be the sole judge of their jurisdiction.’” The arbitrator goes first; the court, when its turn comes, decides for itself.

The exceptions, and when the court decides first

The general rule has exceptions, and they come from Dell. Sharpe J.A. summarized them in Willis at ¶ 22, stating, “[t]hat general rule should be departed from ‘only if the challenge to the arbitrator’s jurisdiction is based solely on a question of law,’” that “[i]f the challenge requires the production and review of factual evidence, the court should normally refer the case to arbitration,” and that where questions of mixed law and fact are raised, the court should refer the issue to the arbitrator “unless the questions of fact require only superficial consideration of the documentary evidence in the record.” The Supreme Court in Uber at ¶ 36 described the “essential question” on the superficial-review branch as “whether the necessary legal conclusions can be drawn from facts that are either evident on the face of the record or undisputed by the parties,” and added a further exception at ¶¶ 37-46 for the case in which referring the challenge to the arbitrator would mean that it is never decided, holding at ¶ 46 that “a court should not refer a bona fide challenge to an arbitrator’s jurisdiction to the arbitrator if there is a real prospect that doing so would result in the challenge never being resolved.” Perell J. restated the whole scheme in Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 894 (“Electek”), at ¶¶ 132-134, observing at ¶ 134 that “[t]he issue of whether an arbitrator has jurisdiction is a matter of contract formation and interpretation and the interpretation of a contract is a question of mixed fact and law, and thus pursuant to the competence-competence principle, the court should defer to the arbitrator unless the interpretative question can be answered based on a superficial examination of the documentary proof in the record.”

Saugeen Shores illustrates how narrow the exceptions are in practice. The municipality asked the court to decide for itself whether its dispute with its lessee fell within the lease’s arbitration provisions. Kurz J. held at ¶ 42 that the competence-competence principle applied and that the exceptions did not, finding that “the issue before the court is one of contractual interpretation rather than one of pure law,” that the clause’s words “are at least amenable to the interpretation offered by the Lessee,” and that they “are not simply amenable to superficial review, as defined by Abella J. in Uber,” and noted that the lessee had not “requested arbitration for the purpose of delay.” The result was that the arbitrator, once appointed, would decide arbitrability first, with the court’s turn to come under s. 17(8).

A person who is not a party to the arbitration and has taken no part in it has a separate route. Section 48(1) provides that, “on the application of a party who has not participated in the arbitration, the court may grant a declaration that the arbitration is invalid” on four (4) grounds, including that “the arbitration agreement is invalid or has ceased to exist” and that “the arbitration agreement does not apply to the dispute,” and s. 48(2) allows the court to enjoin the commencement or continuation of the arbitration. The applicant in Electek began under s. 48 before the panel had ruled, and Myers J. declined to hear the application on an urgent basis, observing that “[t]he competence-competence principle suggests the panel should rule on its jurisdiction” first (¶ 10). The section is confined by its terms to a party to the arbitration agreement who has stayed out of the arbitration. In Specialty Life Inc. v. Daumier Financial Services Inc., 2026 ONSC 5696 (“Specialty Life”), strangers to the arbitration sought the declaration, and Cavanagh J. held at ¶ 80 that “[t]he Lue Applicants are not parties to the arbitration who have not participated in the arbitration,” so that “[t]hey do not have status under s. 48(1)(d) to seek a declaration that the Arbitration Award is invalid.”

The kinds of jurisdictional objection

The cases decided under s. 17 fall into five (5) groups, and Tamar Meshel’s Arbitration Law: Statutes, Cases and Commentary (LexisNexis) at § 10.09[5][b] lists them in the same way; namely, challenges to “the scope of an arbitration agreement,” to “whether an arbitration agreement exists,” to “whether a party is a signatory to an arbitration agreement,” to “whether a particular subject matter is arbitrable,” and to “whether an arbitration agreement sets out prerequisites to arbitration.”

The first group is the existence or validity of the agreement. In Electek, the question was whether purchase order terms containing an arbitration clause had ever become part of the contract, and Perell J. found that they had not, holding at ¶ 184 that “there is no Dispute Resolution Clause and no arbitration agreement,” so that “the Arbitrators did not have jurisdiction and their decision should be set aside.” In Clost v. Rennie, 2023 ONSC 6998 (“Clost”), the respondents claimed under a 2005 cottage lease containing an arbitration clause, the applicant said he had never signed it, and the parties appointed an arbitrator to decide “the issue of the existence and validity of the alleged arbitration agreement and the jurisdiction of the arbitrator” (¶ 22). The arbitrator found the clause valid; Bell J., on the s. 17(8) application, found on the whole of the evidence that the signatures were not the applicant’s and that the lease was “invalid, including the arbitration clause,” so that “there is no jurisdiction to conduct the proposed arbitration” (¶ 107).

The second group is whether a person is a party. In Covanta, an arbitrator added two (2) sub-subcontractors to an arbitration between an owner’s contractor and its subcontractor under a rule that permitted joinder of a person “provided such person is a party to the arbitration agreement” (¶ 20). Diamond J. held at ¶ 38 that “[a] decision whether or not a person ought to be added as a party to an arbitration is thus a jurisdictional decision,” found that the arbitrator’s reasons did “not provide any analysis of whether Lexsan and/or Nicholls were parties to the arbitration agreement” (¶ 46), found no incorporation of the arbitration clause into the subcontracts, and set the joinder aside, “thereby restoring the parties to the arbitration to be Covanta and CPP only” (¶¶ 50, 58). The Court of Appeal agreed at ¶ 16 of Covanta (C.A.) that “whether a person is a party to an arbitration agreement is a question of jurisdiction.” In Kaptyn, the question ran the other way; a shareholder of a corporate partner who was neither a “partner” nor a “principal” under a partnership agreement claimed the benefit of its arbitration clause, and Iacobucci J. held after a de novo reading of the agreement that he was a “party” within the clause and that his claims were arbitrable (¶¶ 66-71, 112).

The third group is scope. In HugoMB, a contractor whose right to work on a dam project had been terminated sought to arbitrate a $4.1 million claim for its disqualification from other Ministry tenders, and the arbitrator found a sufficient nexus. Centa J. disagreed, holding at ¶ 71 that the arbitration agreement was “limited to disputes directly linked to the performance of work under the contract,” and at ¶ 79 that “[i]t is one thing for an arbitrator to answer predicate questions that are intrinsically related to the ultimate issues that the parties have agreed to arbitrate. It is quite another to suggest that the arbitrator can leap the fence of her jurisdiction to graze for related issues in the surrounding meadow.” In 1107051 Ontario Ltd. v. GG Kingspa Enterprises Limited Partnership, 2022 ONSC 1847 (“GG Kingspa”), a co-tenancy’s management committee was deadlocked on whether a King Street West development should include a hotel, and the arbitrator accepted jurisdiction under a clause covering any dispute arising “under this Agreement.” McEwen J. held at ¶ 56 that “the dispute does not arise under the Agreement between the Parties,” since nothing in it gave either party “a right to a certain configuration” (¶ 57), and that “[t]he Parties got exactly what they bargained for when they drafted the Agreement” in requiring unanimity (¶ 65). In Iris Technologies Inc. v. Rogers Communications Canada Inc., 2022 ONCA 634 (“Iris”), the scope question was whether a counterclaim fell within the exclusive jurisdiction of the CRTC, and the Court of Appeal confirmed at ¶ 9 that “[t]his was clearly an issue over the Arbitrator’s jurisdiction to hear and decide the counterclaim.”

The fourth group is conditions precedent. In PCL Constructors Canada Inc. v. Johnson Controls Canada LP, 2022 ONSC 1642 (“PCL”), the objecting party argued that the arbitrators under two (2) facility co-ordination agreements for P3 projects lacked jurisdiction because the claimant had not complied with the pre-arbitration steps in those agreements, including the delivery of reports opining on whether an alleged defect was a construction defect (¶¶ 10, 15). Conway J. agreed with the arbitrators that “the steps set out in the FCA were intended by the parties to move them expeditiously towards a resolution of a dispute,” that “[t]here is nothing in the language of the FCA that characterizes these steps as mandatory prerequisites to an arbitration or that sets out the consequences of any failure to comply with them,” and that “[i]f the parties intended such a specific result, they could have said so” (¶ 30). The decision is a caution to drafters who want pre-arbitration steps to be true conditions precedent; the agreement must say what happens when a step is missed.

The fifth group is the arbitrability of the subject matter, which s. 46(1)5 also makes a ground for setting aside an award. GG Kingspa touches it; McEwen J. accepted at ¶ 55 that “parties can arbitrate non-justiciable disputes if they clearly and specifically intended to do so,” but found that they had not.

What falls outside s. 17 altogether is the procedural ruling. In Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642 (“Inforica”), the Court of Appeal held at ¶ 16 that “[t]he words ‘jurisdiction to conduct the arbitration’ in s. 17(1) connote jurisdiction over the entire substance or subject matter of the case, not jurisdiction to make interlocutory or procedural orders that do not determine the merits of the dispute and that are made along the way to final resolution of the issues,” so that an order for security for costs could not be challenged under s. 17(8) or s. 46. In Optiva Inc. v. Tbaytel, 2022 ONCA 646 (“Optiva”), the arbitrator’s decision to allow a summary judgment procedure “was not a decision under s. 17(1) of the Act” and “[s]ection 17(8) did not apply” (¶ 28). As the Court of Appeal observed in Covanta (C.A.) at ¶ 18, however, “[w]hether a person is a party to an arbitration agreement does not cease to be a jurisdictional question simply because it is addressed by the arbitrator as a preliminary matter.”

The time for the objection and the consequences of delay

Section 17 fixes the time. Under s. 17(3), “[a] party who has an objection to the arbitral tribunal’s jurisdiction to conduct the arbitration shall make the objection no later than the beginning of the hearing or, if there is no hearing, no later than the first occasion on which the party submits a statement to the tribunal.” Under s. 17(5), an objection “that the arbitral tribunal is exceeding its authority” must be made “as soon as the matter alleged to be beyond the tribunal’s authority is raised during the arbitration.” Section 17(4) preserves the objection of a party who has appointed or participated in appointing an arbitrator, and s. 17(6) allows a late objection only “if the arbitral tribunal considers the delay justified.” Behind those provisions stands s. 4(1), under which a party who participates “despite being aware of non-compliance” with the Act or the agreement and does not object in time “shall be deemed to have waived the right to object.”

The courts enforce the time limits strictly. In Piazza Family Trust v. Veillette, 2011 ONSC 2820 (Div. Ct.) (“Piazza”), Smith J. held at ¶ 70 that “[t]he intention of this section is to prevent parties from participating in arbitration proceedings and withholding a possible objection to the jurisdiction of the arbitrator until they become aware of the result,” and at ¶ 71 that s. 17(3) “was intended to prevent parties from seeking the benefit of arbitration and proceeding without objection and then attempting to contest the jurisdiction of the arbitrator once the result is known.” Vermette J. summarized the line in Tire Pit Inc. v. Augend 6285 Yonge Village Properties Ltd., 2022 ONSC 6763, at ¶ 26, stating, “[c]onsistent with subsection 17(3) of the Act, this Court has repeatedly held that a party’s failure to raise a jurisdictional objection at the outset of an arbitration precludes that party from doing so later on.”

The leading recent illustration is Joseph Lebovic Charitable Foundation v. Jewish Foundation of Greater Toronto, 2024 ONSC 4400 (“Lebovic”). The applicants, who were the respondents in an arbitration under a donor agreement, had delivered a counterclaim for relief which they argued the arbitrator had jurisdiction to grant, and had issued their own notice of demand for arbitration raising the same issues and invoking the arbitration clause (¶¶ 10, 23). About eighteen (18) months after the other side’s notice of demand, and a week before the hearing, they retained new counsel and objected to the arbitrator’s jurisdiction (¶¶ 14, 22, 25, 29). They argued that s. 17(3) gave them until the beginning of the hearing. Akbarali J. rejected the argument at ¶ 30, holding that s. 4(1) “speaks to when waiver of the right to object will be deemed,” that “[i]t does not restrict a court’s, or an arbitrator’s, ability to conclude that the right to object was actually waived at some time prior than it would have been deemed to be waived,” and that the party could be held to have “agreed to remit certain issues to the arbitrator which would necessitate waiving any jurisdictional challenge.” The court found support in s. 46(3), which bars setting aside an award for want of jurisdiction where the party “has agreed to the inclusion of the dispute or matter” or “waived the right to object to its inclusion” (¶ 31), observed that on the applicants’ argument a party “was free to refer an issue to the arbitrator itself, under jurisdiction it agrees is effective and appropriate, and then contest jurisdiction as long as it did so before the start of the hearing,” which “makes no logical or commercial sense” (¶ 33), and concluded at ¶ 36 that the challenge “was strategic, not genuine.”

Participation without objection has the same effect after the award. In Specialty Life, Cavanagh J. held at ¶ 36 that “[b]y defending SLI’s claim and advancing a counterclaim, and by participating in the Arbitration, Daumier consented to the jurisdiction of the Tribunal over the claims by SLI in the Notice of Arbitration and waived its right to object to the jurisdiction of the Tribunal.” In Tire Pit at ¶ 28, the applicant was “precluded from raising a jurisdictional issue at this stage as it failed to raise any jurisdictional objection before the arbitrator.” And in Cricket Canada v. Alberta Cricket Council, 2020 ONSC 3776 (“Cricket Canada”), the objecting party had filed an answer to the request for arbitration “which did not contest the Centre’s jurisdiction,” had selected arbitration over med-arb and had proposed arbitrators before it retained counsel, who raised the objection (¶¶ 7-8); the arbitrator decided the objection on its merits rather than on the delay, and Koehnen J. upheld her ruling (¶¶ 8, 28).

The tribunal’s choice between a ruling and an award

Section 17(7) gives the tribunal an election, stating, “[t]he arbitral tribunal may rule on an objection as a preliminary question or may deal with it in an award.” The choice decides which route to the court is open afterwards. A preliminary ruling goes to the court under s. 17(8) within thirty (30) days, is decided afresh, and cannot be appealed. A jurisdictional decision contained in an award goes to the court, if at all, by an appeal under s. 45 where one is available or by an application to set aside under s. 46, and the court’s decision on those routes can itself be appealed under s. 49 with leave.

The courts have taken a substantive view of what counts as a preliminary ruling. In Clost, the respondents argued that the stand-alone agreement under which the arbitrator decided only the jurisdiction question had created “a ‘complete, stand-alone arbitration in which the Ruling is the award’” (¶ 30), so that s. 17(8) did not apply and only ss. 45 and 46 did. Bell J. rejected the argument at ¶ 31, holding that “[s]ection 17 of the Act distinguishes between a ruling and an award,” that the arbitrator “ruled on the preliminary question of jurisdiction, not on the merits of the underlying dispute,” and that the respondents’ position “would effectively read s. 17(8) out of the Act.” At ¶ 29, the court adopted the definition from GG Kingspa that “[a]n ‘award’ is an arbitrator’s ultimate decision on the merits of a dispute,” a definition McEwen J. had drawn at ¶ 31 of that case from Inforica. In the Court of Appeal’s decision quashing the motion for leave to appeal in Lebovic, 2024 ONCA 933 (“Lebovic (C.A.)”), the arbitrator had reserved his ruling on jurisdiction and released it after the evidence on the merits had been heard but before closing submissions, in a decision separate from the later award (¶ 4). The court held at ¶ 9 that “the issue of jurisdiction was argued as a preliminary question before the arbitrator; he did not wait to deal with this issue in the award, but instead issued a separate, preliminary ruling,” and that “[w]hile he may have delivered his ruling after the parties had already commenced the hearing of the arbitration on the merits, this does not alter the fact that the issue was raised and decided as a preliminary question.”

The same distinction governs international arbitrations under art. 16(3) of the Model Law, which is Schedule 2 to the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5 (the “ICAA”). In United Mexican States v. Burr, 2021 ONCA 64 (“Burr”), a NAFTA tribunal whose rulings were subject to review in the Ontario Superior Court bifurcated the proceeding and issued a “Partial Award” finding jurisdiction over most of the claims (¶¶ 3-4). Lauwers J.A. held that the label did not matter; the text of art. 16(3) “makes a clear distinction between a jurisdictional plea that is pursued ‘as a preliminary question’ and a jurisdictional plea that is pursued ‘in an award on the merits’” (¶ 9), the tribunal “saw itself as addressing jurisdiction as a preliminary question” and had moved on to the merits phase (¶¶ 13-14), and “[t]here is also no basis for concluding, as Mexico argues, that the label of ‘Partial Award,’ which the arbitral tribunal attached to its ruling, is a sufficient hook with which to snag art. 34(1)” (¶ 25). The court contrasted United Mexican States v. Cargill, Inc., 2011 ONCA 622, where the tribunal had dealt with the jurisdictional objection in its final award on the merits, so that the art. 16(3) prohibition on appeal did not apply (¶¶ 20-21).

The section 17(8) application as a hearing de novo

The nature of the s. 17(8) application was settled in Electek. The respondent there argued that the application was “in the nature of a judicial review application governed by the principles of appellate and judicial review” (¶ 20). Perell J. held at ¶ 21 that “[t]he case law establishes that s.17(8) of the Arbitration Act, 1991 applications and the matching provision under the International Commercial Arbitration Act, 2017 are hearings de novo,” quoted at ¶ 22 the Divisional Court’s reasoning in The Russian Federation v. Luxtona Limited, 2021 ONSC 4604 (Div. Ct.), at ¶ 22, that the court is “to decide the matter,” that it is not “to review the tribunal’s decision,” and that the statutory language “is clear language conferring original jurisdiction on the court to adjudicate the question of the tribunal’s jurisdiction,” and concluded at ¶ 23 that “[w]hat is now before the court is a normal application under the Rules of Civil Procedure. It is not an appeal.” The Court of Appeal confirmed the international version in Luxtona at ¶ 40, holding that “a court assessing an arbitral tribunal’s jurisdiction is not limited to the record that was before the tribunal,” and that “an application to set aside an arbitral award for lack of jurisdiction is a proceeding de novo, not a review of or appeal from the tribunal’s decision,” and the domestic cases have followed; see Clost at ¶¶ 4 and 24-27, HugoMB at ¶ 11, Lebovic at ¶ 18 and Kaptyn at ¶¶ 51-53.

Two (2) consequences follow. The first concerns the evidence. Because the court decides the matter, fresh evidence is admissible without a strict application of the test for fresh evidence on appeal, but Luxtona added a caution at ¶¶ 41-42, that “where a party has participated fully in the arbitration, its failure to raise a piece of evidence before the tribunal may be relevant as to the weight the court should assign that evidence,” and that parties should not expect “two evidential bites of the cherry.” In practice the record before the arbitrator is the core of the record before the court. In Clost, the parties agreed “to rely on the entire record that was before the Arbitrator without further cross-examination” (¶ 23), and Bell J. declined to admit a supplementary affidavit the arbitrator had also refused, in part because “the parties agreed to put before this court the evidentiary record that was before the Arbitrator” (¶ 42). In Electek, the record consisted of the evidence filed on the earlier motion, the evidence and transcripts from the four (4) day hearing before the panel, the panel’s decision and “several affidavits filed for the purposes of the s.17(8) application” (¶ 29), one of which was struck as inadmissible hearsay (¶ 35).

The second consequence concerns the standard. Many decisions describe the standard as correctness; see Cricket Canada at ¶ 2, Covanta at ¶ 44, GG Kingspa at ¶ 20 and Lebovic at ¶ 19. In PCL, Conway J. rejected the argument that an arbitrator’s interpretation of the agreement attracted deference as a question of mixed fact and law, reasoning at ¶ 21 that “an arbitrator will typically have to interpret the contract between the parties to determine whether the arbitrator has jurisdiction,” so that accepting the submission “would reduce the standard of review for jurisdiction from correctness to deference in most cases,” and at ¶ 22 that the respondent’s approach “requires me to accept Johnson’s (and the arbitrators’) interpretation of the FCA before I determine which standard of review applies.” Other decisions treat the language of review as beside the point. Centa J. said in HugoMB at ¶ 11 that “[t]he principle of competence-competence does not require that any deference be paid to an arbitrator’s determination of her own jurisdiction,” that “[t]he usual principles and standards of appellate review or judicial review do not apply,” and that “I am simply to ‘decide the matter’ of whether or not the arbitrator has jurisdiction over claim #7,” and Iacobucci J. adopted that passage in Kaptyn at ¶¶ 51-53. The difference is one of vocabulary; on either formulation the court reaches its own conclusion on the agreement and the evidence, and Perell J. made the point at ¶¶ 124-125 of Electek that on a s. 17(8) application “the court cannot avoid deciding the matter of the arbitrator’s jurisdiction by the competence-competence principle,” since “the Arbitrators have ruled on jurisdiction, and now it is the court’s turn to do so de novo.” Nor does a clause making the arbitrator’s decision final and binding, with no appeal, stand in the way; Iacobucci J. held in Kaptyn at ¶¶ 50 and 52 that “[a]n application to decide a question of jurisdiction is not an appeal” and that “[a] clause precluding an appeal does not prevent an application to a court to consider de novo the preliminary question of the arbitrator’s jurisdiction.”

The analysis the court applies is the one it would apply on a stay motion, without the deferral. In HugoMB, Centa J. applied the Haas framework, asking “[w]hat is the subject matter of the dispute,” “[w]hat is the scope of the arbitration agreement” and “[d]oes the dispute fall within the scope of the arbitration agreement” (¶ 14), and answered the last question against arbitrability for five (5) reasons (¶¶ 70-76). In Kaptyn, Iacobucci J. interpreted the partnership agreement to decide whether a shareholder was a “party,” observing at ¶ 63 that “[t]o reach decisions on these questions, I must interpret the partnership agreement” (¶¶ 59-71). In Clost, the question was one of fact, and Bell J. applied the ordinary burden, holding at ¶ 35 that “[i]n cases of potential forgery, the burden is on the party seeking to authenticate a document to prove that it was signed by the other party, on a balance of probabilities,” and at ¶ 38 that “[t]his is a hearing de novo, and not a motion for interim relief. I am required to make findings of fact and credibility that go to the core issue in the application.”

The thirty days and the arbitration in the meantime

The application must be made “within thirty days after receiving notice of the ruling.” Section 17(8) contains no power to extend that period, and the thirty (30) days in s. 47(1) for an appeal or an application to set aside an award is equally fixed, except where corruption or fraud is alleged (s. 47(2)). In Toronto Standard Condominium Corp. No. 1466 v. Weinstein, 2021 ONSC 1306 (“Weinstein”), Davies J. set out both routes, holding at ¶ 12 that “if the arbitrator rules on a jurisdictional objection as a preliminary question, a party may bring an application to the Court to decide the matter within 30 days of receiving notice of the ruling,” and that a ruling made in the final award is challenged by appeal under s. 45 or by an application to set aside under s. 46(1), and applied the limit strictly, holding at ¶ 14 that even on the most generous view of the starting date the applicant “only had 30 days from that date to initiate his application.” Newton J. explained the policy in Optiva Inc. v. Tbaytel, 2021 ONSC 2929, at ¶¶ 42-43, stating that s. 17(8) “requires the party seeking court review of jurisdiction and objections to do so promptly, within 30 days of the ruling,” and that “[t]he rationale for such a timeline is clear. Objections to jurisdiction and procedure are to be determined at the outset, and not after the arbitration proceeding and the award.” The firm’s arbitration deadline calculator computes the thirty (30) days under s. 17(8) from the day notice of the ruling was received, beside the thirty (30) days of s. 47(1).

The application does not stop the arbitration. Section 17(10) provides that “[w]hile an application is pending, the arbitral tribunal may continue the arbitration and make an award,” and the Court of Appeal held in Universal Settlements International Inc. v. Duscio, 2012 ONCA 215, at ¶ 49, that the convention under which parties maintain the status quo once a notice of application is served “does not apply to stop an ongoing arbitration proceeding,” since “[t]hat the convention does not apply is made clear by s. 17(10).” The international provision is to the same effect; s. 11(3) of the ICAA provides that where the tribunal rules on the plea as a preliminary question and an application is brought, “the proceedings of the arbitral tribunal are not stayed with respect to any other matters to which the arbitration relates and are within its jurisdiction,” and in Burr the merits phase proceeded while Mexico pursued its application and attempted appeal (¶ 14). A party who wants the arbitration halted pending the court’s decision must ask the tribunal or seek an injunction, and in Electek the court declined to hear the matter urgently and left the panel to rule first (¶ 10).

The remedies on the application

Where the court finds that the arbitrator was wrong to accept jurisdiction, it sets the ruling aside and may declare the position. In Clost, the order was a declaration that the lease was invalid and an order setting aside the preliminary ruling, “with costs of the jurisdiction motion to Norm” (¶ 113). In HugoMB, the court set aside the arbitrator’s decision, declared “that Claim #7 is not arbitrable,” set aside the arbitrator’s costs award on the jurisdiction motion and ordered the sums paid under it returned, and remitted the costs of the jurisdiction motion to the arbitrator (¶ 85). In GG Kingspa, the order set aside the decision together with “a declaration that the Arbitrator does not have jurisdiction over the claim brought by Great Gulf” (¶ 72). Where the court finds that the arbitrator was right, the application is dismissed and the arbitration proceeds, as in PCL, Cricket Canada, Lebovic and Kaptyn.

The court’s powers under s. 17 are confined to deciding the matter. In GG Kingspa, both parties had at one point proposed that the jurisdictional question be sent back to the arbitrator to be decided with the merits on a full record, and McEwen J. thought that course “would have been preferable” (¶ 27), but held that the Act did not permit it; ss. 17, 45 and 46 “do not provide this Court with the jurisdiction to refer a decision on jurisdiction back to the arbitrator to determine the issue in conjunction with the merits” (¶ 28), and s. 46(8), which allows the court to remit an award, “does not apply to an issue of jurisdiction which is governed by s. 17” because a preliminary ruling is not an award (¶¶ 31-32). The costs of the jurisdiction motion before the arbitrator are within the court’s reach; Bell J. held in Clost at ¶ 112 that “this court has jurisdiction to rule on the costs of the motion before the Arbitrator given that this is a hearing de novo and the court has the jurisdiction ‘to decide the matter’; that would necessarily include the issue of costs,” and in the costs decision, 2024 ONSC 1012, awarded them on a substantial indemnity scale for conduct “deserving of judicial sanction” (¶¶ 12-13). Where the tribunal has made no costs award and the court has found that no arbitration agreement existed, the court may fix the costs of the arbitration hearing itself, as Perell J. did in Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 2437, awarding $300,000 for the hearing before the panel and $125,000 for the application (¶ 5).

Because a preliminary ruling is not an award, the other routes are closed while it stands alone. Bell J. observed in Clost at ¶¶ 108-109 that s. 45(1) “is predicated on there being an award” and that “the grounds on which the court may set aside an arbitral award under s. 46(1) are predicated on there being an award,” and that the ruling on jurisdiction “was not an award within the meaning of the Act.” A party who misses the thirty (30) days therefore cannot fall back on s. 46 until an award is made, and when it is, s. 46(3) and s. 46(5) will be raised against any objection that was waived.

The bar on appeals in section 17(9) and its limits

Section 17(9) is categorical, and the Court of Appeal has applied it as written. In Iris, the application judge had reversed the arbitrator and dismissed the counterclaim, and the losing party sought leave to appeal under s. 49. The court quashed the motion, holding at ¶ 7 that “[t]he Arbitration Act, 1991 is clear that there is no further right of appeal from the decision of a Superior Court judge hearing a review of an Arbitrator’s decision on a preliminary question,” that the appeal provisions in ss. 45 to 50.1 “relate to an appeal of an award,” and that “[t]he Arbitrator did not make an award. Rather, he ruled on a preliminary objection.” At ¶ 8 it added that “[a]s s. 17(9) makes clear, there is no appeal from the reviewing court’s decision. The provision could not be clearer,” and at ¶ 10 that “[t]he statute makes it clear that there is not when the issue is determined as a preliminary question. With respect, the merits of the matter are irrelevant to that determination.” The court applied the same reasoning in Clost v. Rennie, 2024 ONCA 514, quashing both an appeal and a motion for leave to appeal and awarding the successful applicant $18,000 in costs (¶¶ 2-5), and in Lebovic (C.A.), where it observed at ¶ 12 that “[a] motion to quash should not have been required” and awarded $15,000. In Covanta (C.A.), the court quashed the appeal with costs of $20,000 (¶¶ 19-20), and in Burr, under the matching prohibition in art. 16(3) of the Model Law and s. 11(2) of the ICAA, the appeal was quashed with costs of $9,000 (¶ 30).

The bar has two (2) limits, and both turn on whether the application judge had jurisdiction under s. 17 in the first place. The first is the case in which the arbitrator’s ruling was not jurisdictional at all. In Inforica, the application judge had set aside an order for security for costs under ss. 17(8) and 46(1), and the Court of Appeal held that, because the order was neither a ruling on “jurisdiction to conduct the arbitration” nor an award, the application judge “had no jurisdiction to entertain the application,” so that “this court has jurisdiction pursuant to s. 6(1)(b) of the Courts of Justice Act” to hear the appeal (¶ 31), and at ¶ 32 that “[i]f the application judge did not have jurisdiction to entertain the application under s. 17 in the first place, s. 17(9) does not bar an appeal from her decision.” The attempt to use that opening in Covanta (C.A.) failed, because the joinder ruling in that case was jurisdictional (¶¶ 14-18). The second limit is the case in which the court finds that no arbitration agreement existed. Perell J. explained in Electek at ¶ 24 that “[i]f a court concludes that a dispute is not subject to arbitration, then an appeal is not barred by the appeal provisions of the Arbitration Act, 1991,” since “[w]here there is no arbitration agreement, the Arbitration Act, 1991 has no application,” and concluded at ¶ 25 that “[h]aving regard to my decision that there is no arbitration agreement in the immediate case, my decision de novo can be appealed.” The reasoning comes from Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.), as applied to the stay provisions in Willis at ¶¶ 40-42 and to s. 17(9) in Inforica at ¶¶ 31-32. The Court of Appeal’s decision in Clost sits uneasily beside it. The application judge there had found the lease, and with it the arbitration clause, invalid, and the court nonetheless quashed the appeal under s. 17(9) in brief reasons that did not mention Electek (¶¶ 3-4). A party who loses a s. 17(8) application on the footing that no arbitration agreement exists should therefore not count on an appeal.

The policy behind the bar was stated in Willis in the parallel context of s. 7(6). Sharpe J.A. acknowledged at ¶ 48 “an understandable inclination to resist the idea that any decision is not subject to review by way of appeal,” but held that “there are situations where the need for finality and an expeditious resolution trump reviewability,” and observed at ¶ 49 that referring the question to the arbitrator first “does not eliminate the possibility of judicial review,” since “s. 17(8) provides for review of a preliminary ruling on jurisdiction and s. 46 provides that an award may be set aside if it strays beyond what is covered by the arbitration agreement.”

Jurisdiction after the award under section 46

Where the tribunal deals with jurisdiction in the award, or where a party raises the question for the first time after the award, the route is s. 46. Three (3) of its grounds concern jurisdiction; namely, that “[t]he arbitration agreement is invalid or has ceased to exist” (s. 46(1)2), that “[t]he award deals with a dispute that the arbitration agreement does not cover or contains a decision on a matter that is beyond the scope of the agreement” (s. 46(1)3), and that “[t]he subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law” (s. 46(1)5). Section 46(2) requires the court, where paragraph 3 applies and it is reasonable to separate the decisions, to “set aside the impugned decisions and allow the others to stand.” Sections 46(3) and (5) bar relief where the party agreed to the inclusion of the matter, waived the objection, agreed that the tribunal could decide what disputes had been referred to it, or is deemed under s. 4 to have waived the objection, and s. 46(6) allows the court to entertain a ground that could have been raised under s. 17 only “if it considers the applicant’s failure to make an objection in accordance with section 17 justified.”

The Court of Appeal’s decision in Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254 (“Alectra”), governs the s. 46(1)3 inquiry. Huscroft J.A. held at ¶ 25 that “the court’s authority to set aside an arbitration award under that subsection depends on the mandate the arbitration agreement confers on the arbitrator to resolve a particular dispute,” at ¶ 26 that “if an arbitration agreement provides that an arbitrator shall resolve a particular question and the arbitrator does so, the court has no authority to set aside the award on the basis that the arbitrator’s decision is unreasonable or incorrect,” and at ¶ 27 that “[s]ection 46(1)3 is not an alternate appeal route and must not be treated as such.” At ¶ 43 the court confirmed, citing Smyth v. Perth and Smiths Falls District Hospital, 2008 ONCA 794, at ¶ 17, that “s. 46(1)3 sets out a jurisdictional question that must be answered correctly,” and at ¶ 44 that “once the jurisdictional question is answered, in the absence of a right of appeal pursuant to s. 45 the court has no authority to go on to review the arbitrator’s award for reasonableness.” As Vermette J. put it in Tire Pit at ¶ 25, “[j]urisdiction is determined not by asking whether the arbitrator made a correct decision, but by asking whether the arbitrator had the authority to make the inquiry that they made.”

The s. 46 route is subject to the same waiver rules as s. 17. In Specialty Life, the losing party in the arbitration sought to set aside the awards under both s. 17(8) and s. 46 for want of jurisdiction, and Cavanagh J. held that its defence, counterclaim and participation amounted to consent and waiver (¶ 36), and declined to set aside the awards on the ground that they dealt with a dispute the agreement did not cover (¶ 37). In Lebovic at ¶ 31, s. 46(3) was the court’s confirmation that waiver can precede the deemed waiver in s. 4. Our article on setting aside an arbitral award in Ontario deals with the s. 46 grounds in full.

International arbitrations under article 16 and section 11 of the ICAA

For arbitrations governed by the ICAA, the scheme is the Model Law’s. Article 16(1) confers competence-competence and separability in terms that match s. 17(1) and (2). Article 16(2) fixes the time for the plea, stating, “[a] plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence,” and “[a] plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings,” with the tribunal able to “admit a later plea if it considers the delay justified.” Article 16(3) provides that the tribunal may rule on the plea “either as a preliminary question or in an award on the merits,” that where it rules as a preliminary question that it has jurisdiction, any party may within thirty (30) days request the court “to decide the matter, which decision shall be subject to no appeal,” and that the tribunal may continue the proceedings and make an award while the request is pending. Section 11 of the ICAA then provides in subsection (1) that where “an arbitral tribunal rules on a plea that it does not have jurisdiction, any party may apply to the Superior Court of Justice to decide the matter,” in subsection (2) that “[t]he court’s decision under subsection (1) is not subject to appeal,” and in subsection (3) that the tribunal’s proceedings on other matters are not stayed.

The two (2) regimes have been read together. Perell J. noted in Electek at ¶ 22 that s. 11(1) of the ICAA “is the same as s. 17(8),” and relied on the Divisional Court’s reasoning in Luxtona. The Court of Appeal in Iris at ¶ 11 noted that its conclusion under s. 17(9) was “consistent with the decision of this court in United Mexican States v. Burr,” and in Covanta (C.A.) at ¶ 13 that “[t]he same prohibition is set out in s. 17(9).” The one point of difference to watch is the time for the plea; under the Model Law it runs out with the statement of defence, while under the Act it runs to the beginning of the hearing, subject to the waiver cases discussed above. The Luxtona holding that the court hears the matter de novo and may receive fresh evidence applies to both regimes, and so does the court’s observation at ¶ 51 that, as the Court of Appeal said in Cargill at ¶ 48, “when deciding its own jurisdiction, the tribunal has to be correct.”

Practical considerations

Six (6) points decide most jurisdictional contests.

The first is to object at once, in writing, and in terms. Section 17(3) sets an outside limit, but Lebovic, Piazza and Specialty Life show that a party who defends, counterclaims or invokes the clause itself has been held to have accepted the tribunal’s jurisdiction long before the hearing begins. A respondent who disputes jurisdiction should say so in its first communication with the tribunal and in every pleading, should take no step that invokes the agreement for its own benefit, and should ask the tribunal to decide the objection before the merits are pleaded. Where the objection is that the tribunal is exceeding its authority on a particular matter, s. 17(5) requires it to be made as soon as the matter is raised.

The second is to think about s. 17(7) before asking the tribunal to rule. A preliminary ruling leads to a de novo hearing in the Superior Court within thirty (30) days and to a decision that cannot be appealed; a ruling in the award leads to the s. 45 and s. 46 routes, with appeal rights under s. 49. A party confident of its position on the record may prefer the finality of the first route, while a party whose case depends on evidence not yet developed may prefer the second, and the tribunal can be addressed on the choice. The label the tribunal attaches will not control; Burr, Clost and Lebovic (C.A.) all turned on what the tribunal in fact decided.

The third is the record. The court will decide the matter on the evidence, and the evidence before the arbitrator will usually be the evidence before the court. The jurisdictional hearing before the tribunal should therefore be conducted as if it were the court hearing, with affidavits, documents, cross-examination and expert evidence where the question turns on fact, as it did in Clost, where the record included the reports of four (4) expert witnesses and extensive cross-examinations (¶ 23). Fresh evidence is admissible on the application, but Luxtona warns that evidence produced late “may well attract a degree of scepticism,” and a court may refuse what the arbitrator refused, as in Clost (¶¶ 41-42).

The fourth is the calendar. Thirty (30) days from notice of the ruling, with no power to extend, and no fallback on s. 46 until an award exists. The arbitration continues under s. 17(10) unless the tribunal agrees to pause or the court intervenes, so the applicant should ask the tribunal for a timetable that leaves room for the court’s decision and should be prepared to continue in the arbitration without prejudice while the application is pending.

The fifth is the forum for a party who says it is not a party. A person named in a notice of arbitration who says it never agreed to arbitrate has a choice between participating under protest and applying under s. 48 for a declaration, and the choice should be made deliberately; s. 48 is available only to a party “who has not participated in the arbitration,” and the competence-competence principle may lead the court to defer a s. 48 application until the tribunal has ruled, as it did in Electek (¶ 10).

The sixth is cost. The applicant in Covanta recovered $50,000 for the application (¶ 66); the unsuccessful applicants in Lebovic paid $26,610.61 by agreement (¶ 39); the costs in HugoMB were fixed at $7,000 on consent (¶ 84); the successful applicant in Electek recovered $425,000 for the arbitration hearing and the application together; the applicant in Clost recovered substantial indemnity costs of the jurisdiction motion and the application; and each of the parties who tried to appeal paid again, $9,000 in Burr, $15,000 in Lebovic (C.A.), $18,000 in Clost and $20,000 in Covanta (C.A.). A jurisdictional contest is a trial of the arbitration agreement, and the party that loses it usually pays a large part of the other side’s costs as well as its own.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract, lease, franchise and fraud disputes, and in the court proceedings that surround them. We advise on whether a dispute is arbitrable and who is bound by the clause, raise and resist jurisdictional objections before the tribunal under s. 17, bring and defend applications under ss. 17(8) and 48 of the Act and s. 11 of the ICAA, resist attempted appeals under s. 17(9), and bring and defend applications to set aside awards under s. 46 on jurisdictional grounds. Our arbitration practice and our commercial litigation practice are described on the pages linked here, our shareholder disputes practice covers the buy/sell, oppression and management disputes in which questions of who is bound to arbitrate most often arise, and our appellate practice covers the motions to quash and the appeals that follow a jurisdictional ruling. Our articles on staying a court action in favour of arbitration in Ontario, on arbitrating a shareholder dispute in Ontario, on evidence in a commercial arbitration in Ontario, on interim measures in aid of arbitration in Ontario, on costs in a commercial arbitration in Ontario, on setting aside an arbitral award in Ontario, on appealing an arbitral award in Ontario and on enforcing an arbitral award in Ontario take the dispute from the stay motion to the award and its enforcement. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Whether an arbitrator has jurisdiction depends on the arbitration agreement, the conduct of the parties and the evidence, and the authorities cited should be read in full before they are relied on.

The post Challenging an Arbitrator’s Jurisdiction in Ontario appeared first on Grigoras Law.

The answer that has emerged is that the arbitrator’s discretion is wide, that it must be exercised judicially, that the court will rarely interfere with it, and that the parties can shape or displace it in their agreement. An arbitrator may award a successful party its reasonable legal fees without reference to any court scale, may give effect to an offer to settle under s. 54(5), may include the fees of litigation-support counsel and experts, and may not award costs the agreement has allocated differently or costs of a process that preceded the arbitration. The court reviews a costs award only for an error in principle or a plainly wrong result, and only through the narrow doors of an appeal under s. 45 or an application to set aside under s. 46. This article takes the subject in order, from the statutory code to the costs of the court proceedings that surround an arbitration, and closes with the steps that decide most costs disputes before the award is made.

The statutory code in section 54

Section 54 does five (5) things. Subsection (1) confers the power. Subsection (2) defines the costs of an arbitration as the parties’ legal expenses, the tribunal’s fees and expenses and “any other expenses related to the arbitration.” Subsection (3) deals with an award that is silent on costs, stating, “[i]f the arbitral tribunal does not deal with costs in an award, a party may, within thirty days of receiving the award, request that it make a further award dealing with costs,” and s. 43(4) provides that a terminated arbitration may be revived for that purpose. Subsection (4) supplies the default where no costs award is made, stating, “[i]n the absence of an award dealing with costs, each party is responsible for the party’s own legal expenses and for an equal share of the fees and expenses of the arbitral tribunal and of any other expenses related to the arbitration.” Subsections (5) and (6) deal with offers to settle, and they are discussed below.

Two (2) other provisions frame the section. Section 3 allows the parties to an arbitration agreement to “vary or exclude any provision of this Act” except the provisions it lists, and s. 54 is not among them, so a costs clause in the agreement prevails over the statutory discretion; that consequence is the subject of Simcoe Condominium Corporation No. 78 v. Simcoe Condominium Corporation Nos. 50, 52, 53, 56, 59, 63 and 64, [2006] O.J. No. 605 (S.C.J.) (“Simcoe”), discussed below. Section 44 allows the tribunal to correct an award, and in Italiano v. Toronto Standard Condominium Corp. No. 1507, 2008 CanLII 32322 (S.C.J.) (“Italiano”), McWatt J. held at ¶¶ 46-48 that an arbitrator who had decided the scale of costs was functus on that question but was not functus on the quantum and the manner of payment, and could receive further submissions on them.

The current state of the law was summarized in Tamar Meshel’s Arbitration Law: Statutes, Cases and Commentary (LexisNexis) at § 10.09[1][c], which states that arbitrators “have jurisdiction to award costs” and “may also order the parties to pay an advance on costs,” that s. 54 “does not refer to the Rules of Civil Procedure or to the concept of scale of costs,” and that the ordinary rule is that “the successful party should recover reasonable legal fees without reference to any court scale, absent the agreement of the parties or specific legislation.” The same section records that “[t]here is ‘vagueness and uncertainty in the authorities’ and no ‘clear rule’ as to whether arbitration costs may be awarded on a full indemnity basis without finding any undue conduct by a party,” a point on which the two (2) leading recent decisions, discussed next, pull in different directions.

What the costs of an arbitration include

The definition in s. 54(2) is wider than the court’s concept of costs. It names three (3) components. The first is the parties’ legal expenses, which the cases treat as including the fees of counsel at the hearing and the fees of other lawyers whose work was required by the arbitration. In Schickedanz v. Wagema Holdings Ltd., 2023 ONSC 7219 (“Schickedanz”), the claimant discontinued a shareholder arbitration against her four (4) brothers and the family holding company after substantial expense had been incurred, and the arbitrator, the Honourable Frank J.C. Newbould, awarded the brothers $409,426.48 plus HST and awarded the company its litigation counsel’s fees of $48,380 plus HST together with $172,150.34 paid to the corporate law firm that had acted on the underlying transaction under a litigation-support retainer (¶ 21). Vermette J. upheld the litigation-support fees at ¶ 71, since the arbitrator had found that “the assistance provided by Gowling to Wagema and its litigation counsel to bring litigation counsel up to speed and to produce documents was an appropriate expense,” and the arbitrator “was in the best position to make this factual determination.”

The second component is the fees and expenses of the tribunal. Those fees can be substantial; in Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 2437 (“Electek (Costs)”), Perell J. recorded at ¶ 12 that the arbitration “proceeded before a blue-ribbon arbitration panel” of three (3) arbitrators and that “[t]he Arbitrators cost $2,400 per hour.” Under s. 54(4), the default in the absence of a costs award is that the parties share those fees equally, and the party that advanced more than its share recovers the difference only through an award.

The third component is “any other expenses related to the arbitration,” which takes in experts, transcripts, hearing facilities and the like, subject always to the arbitrator’s view of what was reasonable. In Nasjjec Investments Ltd. v. Nuyork Investments Ltd., 2015 ONSC 4978 (“Nasjjec”), the arbitrator awarded the successful party $1,007,026 in costs, including disbursements of $206,840, “[a]fter deducting amounts of $20,000 to reduce an expert’s fee for corrective work and $18,703 in respect of time spent on matters outside the scope of the arbitration” (¶ 103), and Pattillo J. found no unfairness in the result.

The limit on the definition is the word “arbitration.” Costs of a process that preceded the arbitration are not costs of the arbitration unless the agreement or a statute makes them so. In Toronto Standard Condominium Corp. No. 1466 v. Weinstein, 2021 ONSC 1306 (“Weinstein”), leave to appeal refused 2021 ONCA 470, the arbitrator had treated the mandatory condominium mediation and the arbitration as “separate phases of a single mandated process” and had awarded the legal costs of both (¶ 48). Davies J. held at ¶ 50 that “[s]ection 54 does not make any reference to the costs of mediation that precedes the arbitration” and at ¶ 52 that “the arbitrator did not have authority to order Mr. Weinstein to pay legal fees associated with the failed mediation,” following Italiano, where the costs award had been reduced for the same reason. A different view was taken in 90 George Street Ltd. v. Ottawa-Carleton Standard Condominium Corp. No. 815, 2015 ONSC 336 (“90 George Street”), where Smith J. held at ¶ 114 that, because the Condominium Act, 1998, S.O. 1998, c. 19, “requires parties to mediate budget disagreements before undertaking arbitration,” the mediation “did not represent an exercise of discretion by the parties prior to commencing arbitration and for that reason costs encompassing the mediation are related to the arbitration process and are proper and appropriate.” The two (2) decisions are not reconciled, and a commercial party that wants the costs of a contractual mediation or negotiation step to be recoverable in the arbitration should say so in the agreement.

The scale of costs and the absence of the Rules

The question that divides the cases is whether an arbitrator must think in the court’s categories of partial and substantial indemnity. The statutory answer is that the Act does not require it. As Vermette J. observed in Schickedanz at ¶ 45, “[s]ection 54 does not refer to the Rules of Civil Procedure or to the concept of scale of costs,” and at ¶ 54(e) that “partial indemnity costs” and “substantial indemnity costs” are defined in rule 1.03 by reference to Tariff A, while “[t]here are no references to the Rules of Civil Procedure or Tariff A in the Arbitration Act.” The arbitrator in that case had relied on J. Brian Casey’s Arbitration Law of Canada: Practice and Procedure for the proposition, quoted at ¶ 46, that “[t]he practice in most domestic arbitrations is to award reasonable legal fees without reference to any court scale, absent the agreement of the parties or specific legislation,” and Vermette J. held at ¶ 47 that “[t]hese general principles are consistent with the language in section 54 of the Arbitration Act,” noting support in other provinces for the view that “full indemnity is the norm regarding commercial arbitration,” citing K-Rite Construction Ltd v. Enigma Ventures Inc, 2020 ABQB 566, at ¶ 38, and Allard v. The University of British Columbia, 2021 BCSC 60, at ¶ 78. The conclusion at ¶ 56 was that “the Arbitrator did not make an error in principle and was not plainly wrong when he decided to award Wagema its full legal expenses as costs of the arbitration.”

The same position was taken, in obiter, by Penny J. on the Commercial List in Taseko Mines Ltd. v. Franco-Nevada Corp., 2023 ONSC 2055 (“Taseko”), where the appeal from the award succeeded on the merits and the costs appeal did not have to be decided. Penny J. said at ¶ 115 that “[t]he rules of court do not apply to the discretion of a private arbitrator to award costs” and at ¶ 116 that “[t]he ordinary rule in arbitration proceedings is that the successful party should recover reasonable legal fees without reference to any court scale, absent the agreement of the parties or specific legislation,” and would have found the arbitrator’s award of “its reasonable legal fees and expenses” reasonable. Earlier decisions point the same way. In Azurix at ¶ 10, Rutherford J. was “not at all sure that the arbitrator is necessarily required to be guided by the provisions of Rule 57.01,” and in Necrovore Inc. v. Andover Land Corp., 2007 CanLII 34849 (S.C.J.) (“Necrovore”), Spiegel J. agreed at ¶ 21 “that the provisions of the Rules of Civil Procedure with respect to costs were not binding upon the arbitrator, and had the parties intended that they be binding they were free to stipulate to that effect in the arbitration agreement.”

The other line of authority treats the court’s scales as the natural measure. In Electek (Costs), the tribunal had made no costs award because the court had found on a de novo application under s. 17(8) that the tribunal lacked jurisdiction, and Perell J. fixed the costs of the arbitration hearing as well as the costs of the court application. He stated at ¶ 27 that “[t]he most general rule about costs, not to be departed from without good reason, is that costs at a partial indemnity scale follow the event,” and at ¶ 31 that the arbitrator’s “discretion must be exercised judicially and not irrationally or whimsically” and that “[i]t is within an arbitrator’s discretion to order substantial or full indemnity if it is justified after looking at the prior conduct of a party when making such an award.” Applying that approach at ¶ 32, he found that “[t]here is nothing in the conduct of the parties that calls out for a punitive award,” since the adversaries “did not depart from the rules of engagement,” and awarded $300,000 for the arbitration hearing and $125,000 for the application, both on a partial indemnity basis, against a claim for $616,312.06 on a full indemnity basis (¶¶ 1, 5).

Schickedanz confronted Electek (Costs) directly and confined it. Vermette J. held at ¶ 54 that Electek “does not stand for the general proposition that the costs of a commercial arbitration must be granted on a partial indemnity scale except where the losing party’s conduct was reprehensible, scandalous or outrageous,” for reasons that included that Perell J. “awarded the costs of the arbitration as a judge of this Court” and “was not ruling on a costs award made by the arbitral tribunal,” that he did not appear to have been shown the relevant passage of the Casey text, and that the three (3) cases he relied on, Italiano, Azurix and Rosenfeld v. Iamgold International African Mining Gold Corp., [1997] O.J. No. 3770 (Gen. Div.) (“Rosenfeld”), “do not support the broader principle that full indemnity costs cannot be awarded in other circumstances” and “also do not support the principle that arbitrators must approach costs in the same manner as courts do under the Rules of Civil Procedure.” Those three (3) cases are nonetheless the ones that an arbitrator asked to award costs above the ordinary measure on the ground of conduct will be shown. In Italiano at ¶ 43, McWatt J. held that “[i]t is within an arbitrator’s discretion to order full indemnity if it is justified after looking at the prior conduct of a party when making such an award,” and in Rosenfeld, Somers J. upheld an award by the Honourable Patrick Galligan that gave the successful parties their solicitor-and-client accounts in full for the matters within his jurisdiction, on the arbitrator’s finding that the claim “amounted to nothing more than, to adopt words chosen by Mr. Wires, ‘a business play’ against that company at a time when it was uniquely vulnerable to such an attack” (¶ 11), holding at ¶ 12 that “the arbitrator was entitled to look at the applicant’s prior conduct, as well as that evidenced during the course of the hearing.”

Where the parties have adopted the court’s measure, the court’s measure applies. In Pagliaroli v. Rite-Pak Produce Co., 2010 ONSC 3729 (“Pagliaroli”), the arbitration agreement provided that the arbitrator “will have discretion to award costs of the arbitration including all pre-hearing motions and proceedings in the same manner and on the same scale as he deems appropriate as would a judge of the Superior Court of Justice” (¶ 69). The arbitrator awarded partial indemnity costs to a date and “substantial indemnity costs thereafter, approaching full indemnity” (¶ 65), and Grace J. held at ¶ 72 that only two (2) of the five (5) factors the arbitrator had listed could support costs above the partial indemnity scale on the authorities; namely, “service of an offer in circumstances which trigger the application of Rule 49.10 of the Rules of Civil Procedure or the arbitrator’s conclusion that the Rite-Pak group made ‘unfounded personal allegations’” against the claimant. Since the offer had been served one business day before the hearing and the allegations were not unfounded, the costs were reduced to a partial indemnity award of $185,000 (¶¶ 72, 75, 78). Vermette J. distinguished Pagliaroli in Schickedanz at ¶ 55(b) on exactly that ground, that “the issue of costs was specifically addressed in the parties’ arbitration agreement.”

The practical position, then, is as follows. An arbitrator under the Act who has not been directed to the Rules may award the successful party its reasonable legal expenses in full without any finding of misconduct, and Schickedanz and Taseko will protect that award on review; an arbitrator who elects to reason in the court’s scales may do so and will be protected by Electek (Costs); and a party that wants one approach rather than the other must put it in the agreement, as the parties in Pagliaroli did. Whichever measure is used, the overriding requirement is the one stated in Azurix at ¶ 11, that the discretion “cannot be exercised arbitrarily, irrationally or whimsically,” and “must be exercised judicially.”

Costs follow the event and the exercise of the discretion

Although the Rules do not bind the arbitrator, the general principles that inform costs in litigation do. In Necrovore, the successful claimant on a joint venture dispute was awarded no costs by an experienced arbitrator who had drawn counsel’s attention at the outset to an old case suggesting that parties who leave important transactions to oral arrangements should each bear their own costs (¶ 24). Spiegel J. allowed the appeal, which was confined to questions of law, holding at ¶ 18 that “[a]n arbitrator exercises a judicial function and where he is vested with discretion pursuant to the terms of the arbitration agreement or the Act, that discretion must be exercised on proper legal principles,” at ¶ 23 that “[i]t is well established that the usual rule is that costs should follow the event in the absence of special circumstances,” and at ¶ 37 that “there were no proper legal principles or considerations that favoured a denial of costs to a party who was totally successful on the merits, made a favourable offer to settle, and was not guilty of any misconduct.” The matter was remitted to the arbitrator to fix costs on a partial indemnity basis (¶ 38).

Deciding who won is itself within the discretion. In Azurix, a lengthy construction arbitration with a claim and a counterclaim, the arbitrator measured success by asking “[a]t the end of the day, who owes whom money?” (¶ 4), and Rutherford J. held at ¶ 11 that the arbitrator “recognized that there may be other measures of who should pay, but selected the ‘who must pay who’ measure as the way to best assess the result in the particular case he had before him,” and that he had acted judicially. In Best Buy Canada Ltd. v. Roselawn and Main Urban Properties Inc., 2018 ONSC 92 (“Best Buy”), a ten (10) day market-rent arbitration under a retail lease, the landlord had claimed $1,653,740 per year and offered to settle at $1,550,000, the tenant had claimed a figure below the base rent and offered a nominal increase, and the arbitrator fixed the rent at $1,279,260 (¶¶ 5-9). The lease entitled “the prevailing party” to recover from “the unsuccessful party” its costs on a solicitor and client basis (¶ 6), and the arbitrator found that the landlord had prevailed because it had maintained throughout that the market rent exceeded the base rent while the tenant had maintained the opposite (¶ 19). Dietrich J. refused leave to appeal, holding at ¶ 17 that the arbitrator “appropriately assigned meaning to the relevant terms in the context of the Lease and the arbitration” and that “[t]he weight given to each of the factors was well within his discretion and the result is commercially sensible,” and at ¶ 24 that “[t]he Arbitrator was entitled to exercise his discretion in weighing the relevant factors he considered in making the Costs Award.”

Divided success does not compel a distributive award. In Nasjjec, the arbitrator “considered whether a distributive costs order should be made and determined that such an order was not appropriate in the circumstances of the arbitration” (¶ 117), and Pattillo J. held at ¶ 118 that the applicant had “failed to establish that there was some procedural unfairness or breach of natural justice by the Arbitrator in determining costs,” since it sought “to reargue its costs submissions which it is not permitted to do.” The arbitrator in that case had “outlined the principles involved in determining costs awards and the factors to be considered, including those set out in Rule 57.01(1); considering the fairness and reasonableness of costs in respect of both their constituent elements and their total; and proportionality” (¶ 104), which illustrates the orthodox course; the arbitrator is not bound by rule 57.01, but an arbitrator who considers its factors as a guide is safe from the charge of having ignored a relevant consideration.

Non-parties drawn into the arbitration are dealt with on the same principles. In Bergmanis v. Diamond, 2021 ONSC 2375 (“Bergmanis”), the arbitrator quashed summonses issued to three (3) law firms that were strangers to the arbitration and awarded each firm $10,000 in counsel fees plus disbursements and HST (¶ 41). The firms cross-appealed, arguing that strangers brought into litigation who succeed on a motion “should be awarded costs on a full indemnity basis” (¶ 44), and Chalmers J. dismissed the cross-appeal at ¶ 47 on the basis that “[t]he decision made by the Arbitrator to not award full indemnity costs and to award equal costs to each of the three responding sets of lawyers is within the range of reasonable outcomes.”

Offers to settle under section 54(5)

Section 54(5) brings the logic of rule 49 into the arbitration without its procedure. It provides that “[i]f a party makes an offer to another party to settle the dispute or part of the dispute, the offer is not accepted and the arbitral tribunal’s award is no more favourable to the second-named party than was the offer, the arbitral tribunal may take the fact into account in awarding costs in respect of the period from the making of the offer to the making of the award.” Section 54(6) then provides that “[t]he fact that an offer to settle has been made shall not be communicated to the arbitral tribunal until it has made a final determination of all aspects of the dispute other than costs.” The subsection is permissive, the offer need take no particular form, and the consequences are left to the tribunal rather than fixed by a rule. Smith J. in 90 George Street described it at ¶ 110 as providing “for costs consequences arising from an offer to settle, similar to those set out in Rule 49 of the Rules of Civil Procedure,” and at ¶ 124 as “comparable to Rule 49.10 of the Rules of Civil Procedure which expressly provides for a consideration of offers to settle when deciding the appropriate scale of costs to award.”

The cases show how the subsection is applied. In 90 George Street, the arbitrator had awarded costs on a substantial indemnity basis, and the first rationale he gave for the substantial indemnity scale, which concerned the losing party’s conduct, did not survive review (¶¶ 118-119). The second did. The successful party had made two (2) offers to settle, one before the arbitration began and one between the hearing dates, each for a sum less than the award (¶¶ 121-123), and Smith J. held at ¶ 125 that “[t]he Arbitrator was correct to consider the offers to settle when deciding to award costs on a substantial indemnity basis,” and at ¶ 126 that “[t]he award of costs on a substantial indemnity basis for the entire arbitration was correct. Both offers were for sums considerably less than awarded and the first offer pre-dated the commencement of the arbitration.”

In Nasjjec, the arbitrator awarded the successful party partial indemnity costs to the date of its first offer “and on a substantial indemnity basis thereafter” (¶ 103). The losing party objected that the offers “contained a term that had nothing to do with the issues in the arbitration and involved a party who was not part of the arbitration” (¶ 106), and Pattillo J. rejected the objection. He held at ¶ 110 that the arbitrator “had jurisdiction to deal with the issue of costs (the Act, s. 54)” and had been entitled to hold that the presence of terms “outside the scope of the arbitration did not foreclose him from taking the offers into account,” at ¶ 111 that “[w]hile the offers did not comply with Rule 49, Rule 49.13 provides that in exercising its discretion with respect to costs, a court may take into account any offer to settle made in writing,” and at ¶ 114 that the offers “were very reasonable and coupled with the Arbitrator’s findings regarding Nasjjec’s conduct during the arbitration, supported an award of substantial indemnity costs from the date of the first offer.” The losing party’s own offer of $50,000,000, which the arbitrator had found “was made for tactical reasons,” was properly disregarded (¶ 115).

The timing and the terms of the offer still matter. In Pagliaroli, the claimant’s offer “was not served until one business day before the commencement of the hearing” and “its existence could not justify an award of costs on a substantial indemnity basis”; the arbitrator himself had attached “little weight” to it (¶ 72). In Necrovore, the fact that the successful party had “made a favourable offer to settle” was one of the reasons the denial of costs could not stand (¶ 37). In Best Buy, both parties’ offers were among the factors the arbitrator weighed in deciding who had prevailed (¶ 20). In Metro Canada Logistics Inc. v. UWG Inc., [2007] O.J. No. 1501 (S.C.J.) (“Metro”), the fact that the losing party’s “formal written offer to settle was expressed as a settlement offer within the meaning of section 54(5) of the Act” was evidence that it had understood the arbitrator to have a success-based costs discretion, despite a clause providing for equal sharing (¶ 25).

Two (2) cautions follow from the cases. The first is that rule 49 itself has no application in an arbitration unless the parties adopt the Rules. In Clost v. Rennie, 2024 ONSC 1012 (“Clost”), which fixed the costs of a jurisdiction motion before an arbitrator after the court had set aside the arbitrator’s ruling, Bell J. noted at ¶ 8 that “the r. 49 offer to settle circumstance would not have been available because, as pointed out by Norm in his submissions, there was no agreement or order adopting the Rules of Civil Procedure to that proceeding.” The second is s. 54(6). An offer must be kept from the tribunal until it has decided everything but costs, which means that the offer should be served on the other party alone, that costs should be reserved for submissions after the award on the merits, and that neither party should refer to the offer in the hearing. A well-drawn offer will nonetheless borrow the formalities of rule 49.10; it will be in writing, made early, open for acceptance until the hearing begins, clear enough that the tribunal can compare it with the award, and expressed to be made under s. 54(5).

The arbitration agreement and the costs clause

Because s. 3 allows the parties to vary or exclude s. 54, the agreement is the first place to look. In Simcoe, the shared facilities agreement among eight (8) condominium corporations provided that “the costs of any arbitration shall be borne equally by the parties thereto,” and the arbitrator, relying on s. 54, divided the costs of about $135,000 equally between the losing applicant on one side and the successful respondents on the other (¶¶ 65-66). Belobaba J. held at ¶ 67 that s. 54 “is one of the provisions that may be varied or excluded by an arbitration agreement,” and at ¶ 68 that the parties had done so, since the clause “displaces the discretion under s. 54, and requires the arbitrator to award costs as directed,” and “is not a directive that the arbitrator can ‘consider’ and then discard; it is a requirement that must be applied according to its plain meaning.” The costs award was set aside and replaced with an equal division among the seven (7) participating parties, with the applicant “paying no more than one-seventh of the total amount” (¶ 72), and the counter-application to enforce the award was granted only for the paragraphs that survived (¶ 73).

The clause must, however, be clear about what it covers. In Metro, the agreement provided that “[t]he costs of the arbitration shall be paid by both parties equally” and excluded appeals on questions of law (¶ 3). The arbitrator, the Honourable Coulter A. Osborne, found that the clause “dealt only with the expenses of the arbitration, such as the Arbitrator’s fees but not with legal fees or disbursements incurred by the parties,” and made a success-based award of legal costs (¶ 2). Spiegel J. dismissed the application to set the award aside, holding at ¶ 22 that the parties had “removed errors of law as grounds for challenging the decision of the Arbitrator” and that the applicant therefore had to show that the arbitrator’s interpretation of the clause was “clearly wrong” (¶ 23), which it could not do; the arbitrator had found the words ambiguous, and “[a]mbiguity, like beauty, is often in the eye of the beholder” (¶ 24). The same words had been read the other way in Yonge-Eglinton Building Ltd. v. Toronto Transit Commission, [1997] O.J. No. 89 (Div. Ct.), a market-rent arbitration in which, as Spiegel J. noted at ¶ 30, “the object is to determine what is an appropriate rent rather than who wins or loses,” so that “an equal division of legal fees and expenses may well be appropriate.” Myers J. put the requirement shortly in Abittan v. Wilcox, 2020 ONSC 6836 (“Abittan”), at ¶ 19, observing that in Yonge-Eglinton “the costs clause dealt clearly and expressly with both the costs incurred in negotiating the contract and the costs of any future arbitration,” whereas the clause before him had been held by the arbitrator to deal only with the former, a decision that was “not open for challenge” on an enforcement application.

A clause adopting the Rules for the conduct of the arbitration does not import the court’s costs regime. In Schickedanz, the agreement provided that the Rules “(by analogy, as appropriate)” would govern the arbitration (¶ 8), and the arbitrator held that the clause “referred to how the Arbitration would be conducted by the parties and the Arbitrator, and did not mean that costs would be governed by Rule 57 of the Rules of Civil Procedure and the case law under that rule” (¶ 58); Vermette J. held at ¶ 59 that “it was open to the Arbitrator to interpret the Arbitration Agreement in the way that he did.” By contrast, a clause that speaks to costs in terms, like the clause in Pagliaroli quoted above or the “prevailing party” clause in Best Buy, will be applied according to its terms. A clause about the costs of court proceedings is confined to court proceedings; in Taseko, a provision that appeal costs “shall be awarded on a substantial indemnity basis” related, “by definition, only to court proceedings, not to the arbitration itself” (¶ 115). The agreement can also be varied by conduct; in Rosenfeld, the shareholders’ agreement provided that the arbitrator’s expenses would be borne equally, but the correspondence by which counsel agreed to proceed to arbitration left “any determination with respect to costs (including costs of the arbitration and counsel fees)” to the arbitrator, and the award of costs against the applicant stood (¶¶ 13, 15).

The lessons for drafting are plain. A party that wants the court’s partial indemnity regime should adopt the Rules for costs in terms, as the parties in Pagliaroli did. A party that wants the arbitral norm of reasonable legal fees in full can rely on s. 54 as Schickedanz reads it, but is better served by a clause that says so. A party that wants costs to be shared regardless of outcome must say what is to be shared, since “costs of the arbitration” has been read in Metro to mean the tribunal’s fees alone and in Simcoe and Yonge-Eglinton to take in the parties’ legal costs as well, and must accept that the clause will be enforced against it when it wins, as the applicant in Simcoe learned. A party that wants the costs of a pre-arbitration mediation or negotiation step to be recoverable must include them expressly in light of Weinstein.

The tribunal’s fees, advances and security for costs

The Act regulates the arbitrator’s own account separately from the allocation of costs between the parties. Section 55 provides that “[t]he fees and expenses paid to an arbitrator shall not exceed the fair value of the services performed and the necessary and reasonable expenses actually incurred.” Section 56(1) provides that “[a] party to an arbitration may have an arbitrator’s account for fees and expenses assessed by an assessment officer in the same manner as a solicitor’s bill under the Solicitors Act,” R.S.O. 1990, c. S.15, and s. 56(4) adds that the subsection “applies even if the account has been paid.” Section 56(2) allows a party to have the costs assessed by an assessment officer “in the same manner as costs under the rules of court” where the tribunal awards costs and directs an assessment, or “awards costs without fixing the amount or indicating how it is to be ascertained,” and s. 56(3) applies the principles of a solicitor’s assessment to the part of the costs represented by the tribunal’s fees. Under ss. 56(5) and (6), the court may review the assessment on the application of a party or of the arbitrator and “may confirm the assessment, vary it, set it aside or remit it to the assessment officer with directions”; under s. 56(7), the application for review must be made within the period specified in the assessment officer’s certificate or, if none, within thirty (30) days of the certificate, unless the court orders otherwise; and under s. 56(8), once that period has passed or the court has ruled, “the certificate may be filed with the court and enforced as if it were a judgment of the court.”

Assessments of an arbitrator’s account are rare, and the one reported decision shows how the standard works. In Cohen Highley Vogel & Dawson v. Bon Appetit Restaurant (1999), 44 O.R. (3d) 731 (S.C.J.), the arbitrator’s award fixing the rent under a lease had been set aside on appeal for errors that took him outside his jurisdiction, and the assessment officer assessed his account at nil on the footing that the arbitration had been of no benefit to the parties. Kennedy J. allowed the arbitrator’s appeal, holding that an assessment of an arbitrator’s account is subject to the same standard of review as the assessment of a solicitor’s bill, that “there must be an error in principle for the court to overturn the assessment, and that a grossly large or minute assessment may indicate such an error,” that although there may be cases where no remuneration is warranted “the courts should be exceedingly reluctant to find such a case,” since “[t]o do otherwise would cause confusion and instability in the entire arbitration process,” and that “there must be negligence found to support a reduction of fees.” The arbitrator had made “serious errors” but “was not negligent,” and the account was varied to the full amount claimed. In Abittan, Myers J. noted at ¶ 20 that the respondent “had an opportunity to assess the Arbitrator’s fees under s.56 (1) of the statute and did not take it,” and that whether she could still do so was “a matter for a different proceeding”; the point is that the assessment is a separate process from the challenge to the costs award and should be pursued on its own timetable.

The tribunal can require its fees to be advanced. In Santen v. Tarasenko, [2009] O.J. No. 699 (S.C.J.), the arbitrator had directed the parties to advance his fees equally, and the respondents refused until their objection to the commencement of the arbitration had been decided. Campbell J. held at ¶ 5 that “[t]he Court has the authority to intervene to ensure that the arbitration proceeds,” at ¶ 8 that “it would undermine the authority of the Arbitrator to determine process and put the Arbitrator at risk of non-payment of fees if in the absence of agreement between the parties, he was restrained from making the preliminary order that was made here until there was a contested motion on the issue,” and ordered each party to advance $17,500 “subject to any adjustment that might be made by the Arbitrator on motion to him after the said sums have been advanced by each party” (¶ 9). The consequence of not paying is illustrated by Ibrahim v. Koshi Bashi Inc., [2024] O.J. No. 4613 (S.C.J.), an enforcement application in which the arbitrator had circulated a consent interim order restraining dissipation “but the arbitrator did not sign the order because the respondents did not pay their arbitration fees” (¶ 10), with the result that the successful party had to seek equivalent relief from the court after the award.

The tribunal can also order security for costs, and such an order is not reviewable by the court while the arbitration is pending. In Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642 (“Inforica”), the arbitrator ordered the claimant to post $750,000 by letter of credit under the ADR Chambers rule allowing the arbitrator to “order any party to provide security for the legal or other costs of any other party” and under s. 20 of the Act, on the footing that costs are a procedural matter and so are orders made to ensure their payment (¶¶ 6-8). The Court of Appeal held that the order was not a ruling on the arbitrator’s “jurisdiction to conduct the arbitration” within s. 17(1), so that s. 17(8) did not apply (¶¶ 16, 28), and was not an “award” within s. 46(1), since “[m]atters relating to the conduct of the arbitration are not awards but, rather, are procedural orders and directions” (¶ 29). Sharpe J.A. described such orders at ¶ 24 as “made to protect the integrity of the dispute resolution process by preventing parties from structuring their affairs in a manner that immunizes them from the discipline of costs,” which “do not decide rights, but rather serve to ensure that parties are governed by the rules of the game.” The order was restored, and the party that had fought it paid $15,000 on the appeal and $25,000 below (¶ 42).

Interest on the award and on costs

Section 57 provides that “[s]ections 127 to 130 (prejudgment and postjudgment interest) of the Courts of Justice Act apply to an arbitration, with necessary modifications.” The effect, as Myers J. said in Abittan at ¶ 22, is that “[s]ection 57 of the statute authorizes awards to include prejudgment and postjudgment interest on the same basis as court orders,” and, as Smith J. said in 90 George Street at ¶ 100, that those sections of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”), “apply to arbitration, with necessary modifications.” The Court of Appeal identified the sources of that jurisdiction in Toronto (City) v. Toronto Terminals Railway Co. (1999), 45 O.R. (3d) 481 (C.A.), at ¶ 25, stating, “arbitrators have the same jurisdiction to award interest as does a court,” and “like courts, arbitrators have three possible jurisdictional bases to award interest: by contract, under a statute, or in equity.” Where a contract or a by-law provides its own rate, the award proceeds under that right rather than under s. 128 of the CJA, as in 90 George Street at ¶ 105, where the interest awarded under the condominium’s by-laws was “pursuant to a right other than as provided for by s. 128.” Costs carry postjudgment interest in the same way as the principal sum; s. 129(1) of the CJA provides that “[m]oney owing under an order, including costs to be assessed or costs fixed by the court, bears interest at the postjudgment interest rate, calculated from the date of the order,” and the enforcement order in Kapahi Real Estate Inc. v. Elite Real Estate Club of Toronto Inc., 2026 ONSC 132 (“Kapahi”), discussed below, carried interest on the arbitral costs under the CJA (¶ 24). The firm’s prejudgment and postjudgment interest calculator computes interest under ss. 128 and 129 of the CJA at the Ministry’s quarterly rates.

Challenging a costs award by appeal

A costs award is an award, and the routes for challenging it are the routes in ss. 45 and 46 of the Act. Whether leave to appeal is needed depends on the agreement. Where the agreement provides for appeals, no leave is required to appeal costs alone, because s. 133(b) of the CJA, which requires leave “where the appeal is only as to costs that are in the discretion of the court that made the order for costs,” applies only to a court. That was the holding of Ramsay J. on the motion to quash in Schickedanz v. Wagema Holdings Ltd., 2022 ONSC 5315 (“Schickedanz (Quash)”), who stated at ¶ 19 that “the parties negotiated and agreed upon a broad appeal process, without carving out a leave requirement for costs,” and that “imposing a leave requirement to appeal costs would amount to judicial interference with the parties’ right to contract,” and of Vermette J. on the appeal, who held at ¶ 38 that “[b]y its clear language, subsection 133(b) of the CJA only applies to costs awards made by a court,” that s. 45 “does not draw a distinction between an appeal regarding the substantive disposition of the award and an appeal as to costs only,” and that the Act refers to other provisions of the CJA when it means them to apply, “see sections 45(6) and 57 of the Arbitration Act.” The same conclusion had been reached in Pagliaroli at ¶ 65, stating, “[g]iven the breadth of the arbitration agreement and s. 45(3) of the Arbitration Act, leave to appeal the issue of costs is not required,” and it has since been followed in Maxwell v. Maxwell, 2024 ONSC 4207, at ¶ 5, where Kristjanson J. found “that where the arbitration agreement itself does not require leave to appeal a costs award, leave is not required, largely for the reasons given by Ramsay, J.”

Where the agreement is silent, s. 45(1) governs, and the appellant needs leave on a question of law. In Bergmanis at ¶ 42, Chalmers J. held that the appellant’s “right of appeal is governed by s. 45(1) of the Act,” that it “may only appeal on questions of law with leave,” and that leave had not been sought, adding that he was “not satisfied that the Arbitrator’s decision on the costs award is an issue of law.” Where the agreement excludes appeals, no appeal lies at all; in Fogler, Rubinoff LLP v. Houle, 2021 ONSC 5626 (“Fogler”), Vermette J. noted in a footnote that the ADR Chambers rules incorporated in the agreement did “not allow an appeal on a question of law,” so that s. 45(1) could not be relied on, and in Metro, the exclusion of appeals on questions of law meant that the applicant “cannot successfully challenge the award solely on the grounds that the Arbitrator’s costs interpretation was wrong in law” (¶ 22).

The threshold difficulty on any costs appeal is finding a question of law. In Best Buy, Dietrich J. applied Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, to the arbitrator’s interpretation of the “prevailing party” clause and found “no evidence of the Arbitrator having applied an incorrect principle, or having failed to consider a relevant factor,” and so “no extricable question of law” (¶ 25). In Azurix, Rutherford J. held at ¶ 12 that any error in the arbitrator’s choice of the measure of success “must be an error of mixed fact and law because it is a question of what factors are most appropriate and applicable to the particular facts of the case,” and refused leave (¶ 13). In Fogler, the arbitrator’s departure from the usual costs paradigm on an assessment of a lawyer’s accounts, and his consideration of relative success and unproven allegations, were held at ¶¶ 23-24 not to be errors of law, since “[h]e did not exercise his discretion on wrong principles,” and Vermette J. observed at ¶ 27 that “[g]ranting leave to appeal in this case would not contribute to ensure the consistency of the law, but, rather, would only provide a new forum for the parties to continue their private litigation.” Dambrot J. said the same in a sentence in McAsphalt Marine Transport Ltd. v. Liberty International Canada, [2005] O.J. No. 1424 (S.C.J.), at ¶ 32, stating, “I see nothing in the discretionary exercise of the arbitrator’s authority to impose costs that raises a question of law.” The exception, drawn in Necrovore at ¶ 22, is the failure to apply a governing principle at all; “failure to decide in accordance with law is an error of law,” and an arbitrator who ignores the rule that costs follow the event commits one.

Once the appeal is properly before the court, the standard is the one that applies to a trial judge’s costs order. Vermette J. stated it in Schickedanz at ¶ 41, drawing on Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, at ¶ 27, as follows, “[a] court should set aside a costs award on appeal only if the decision-maker made an error in principle or if the costs award is plainly wrong,” adding that “[c]osts awards are notoriously difficult to appeal because they represent the decision-maker’s exercise of judgment as to the overall justice of the situation that they saw unfolding before them,” and that “the decision-maker at first instance is in the best position to determine the entitlement, scale and quantum of any such award.” Smith J. applied the same standard in 90 George Street at ¶ 111, Grace J. in Pagliaroli at ¶ 68, and Dietrich J. in Best Buy at ¶ 24, where the arbitrator “sits in the same position as a judge does in a lower court when his or her decision is appealed to a higher court.” Quantum alone will not found an appeal; as Vermette J. said in Schickedanz at ¶ 61, “the amount of a costs award by itself does not mean that the award is unreasonable or reflect an error in principle.”

Challenging a costs award by set-aside

The set-aside route under s. 46 is narrower still, and it is confined to the grounds the section lists. A party who argues that the arbitrator had no power to award the costs it awarded relies on s. 46(1)3, which allows the court to set aside an award that “contains a decision on a matter that is beyond the scope of the agreement.” In Fogler, the respondents to a $130,485 costs award made that argument, and Vermette J. rejected it at ¶¶ 9-12. Applying Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254, she held that “[j]urisdiction is determined not by asking whether the arbitrator made a correct decision, but by asking whether the arbitrator had the authority to make the inquiry that they made,” that “there is no doubt that the Arbitrator had the authority to determine the issue of costs,” that the factors he weighed “do not constitute separate questions, disputes or decisions,” and that “given that the issue of costs is within the scope of the arbitration agreement, the court has no authority to set aside the Costs Award or to review its substance.” In Nasjjec, the losing party framed its complaints as excess of jurisdiction and unequal treatment under s. 46 rather than as an appeal, which meant that no leave was required (¶ 108), but the complaints failed on the merits because the arbitrator “clearly had jurisdiction to deal with the issue of costs” (¶ 110) and the party had been heard on every point it raised (¶ 113).

The set-aside route succeeds where the arbitrator has done what the agreement forbids. Simcoe is the example; the agreement required equal sharing and the arbitrator’s success-based division was set aside. Metro shows the limit of the example; where the arbitrator has interpreted the costs clause and the parties have excluded appeals on questions of law, the applicant must show that the interpretation was “clearly wrong” before the award can be characterized as exceeding the arbitrator’s jurisdiction under s. 54(1) or as falling within s. 46(1)3 (¶¶ 22-23), and an interpretation that treats the clause as ambiguous and resolves the ambiguity on the evidence will not be. Ramsay J. added in Schickedanz (Quash) at ¶ 34 that “[t]he jurisprudence in Ontario establishes that no leave is required to appeal a costs award where the order is made without jurisdiction,” so that a true jurisdictional complaint can be brought either way.

Two (2) procedural points complete the picture. The time limit in s. 47 is thirty (30) days from receipt of the award for both an appeal and a set-aside application, and the court has no power to extend it; the authorities on that point are collected in our article on setting aside an arbitral award in Ontario. And a party dissatisfied with the quantum of a costs award should consider s. 44 and s. 56(2) before the court. In Italiano, the arbitrator accepted that he was functus on the scale of costs but “was open to reconsider his award on the issues of quantum of costs and their enforcement by way of payment as common expenses,” and McWatt J. agreed “that he was not functus on those issues” (¶ 48).

Enforcing a costs award

A costs award is enforced like any other award, by an application under s. 50, and the court’s role on that application is limited to the conditions in s. 50(3). In Fogler, the enforcement application and the set-aside application were heard together, and once the set-aside application failed Vermette J. held at ¶ 30 that “there is no valid ground to deny Fogler’s application to enforce the Costs Award,” and ordered payment of $130,485 (¶ 31). In Abittan, Myers J. enforced a costs award of about $46,000 against a respondent who had neither appealed nor applied to set it aside, holding at ¶ 21 that “a costs award is indeed a remedy which a court has jurisdiction to grant and would grant in a proceeding similar to this one” and that s. 50(7) therefore gave no basis to intervene, and that the respondent’s possible claims against the applicant were “not a basis to decline enforcement of the arbitral awards under the mandatory terms of s. 50 (3) of the statute” (¶ 23). In Jewish Foundation of Greater Toronto v. Joseph Lebovic Charitable Foundation, 2025 ONSC 5068, the costs award was recognized and enforced together with the jurisdiction decision, the main award and the damages award once the applications to set aside and appeal them were dismissed (¶¶ 139-140).

The costs award is part of the award, and it is not stayed by a pending application. In Canada Soccer Assn. Inc. v. Assn. de Soccer de Brossard, 2023 ONSC 4317 (“Canada Soccer”), the award debtor, having failed to obtain a stay pending its set-aside application, did not pay the costs of the arbitration, and the award creditor served a notice of garnishment on the debtor’s bank (¶ 2). The debtor moved to stop the garnishment, arguing by analogy to rule 63.01 that its notice of application stayed any collection. Bell J. held at ¶ 4 that the debtor “concedes that the arbitrator’s costs decision is part of the arbitral award,” so that “[e]nforcement of the Award includes enforcement of the costs decision,” and at ¶ 6 that “[a]n arbitration award is not subject to the stay provisions of the Rules of Civil Procedure,” since “there is no automatic stay pending the determination of an application” (¶ 7). The motion was dismissed and the bank was directed to pay the garnished funds to the creditor’s counsel in trust (¶¶ 10-11).

Where the award is made against several respondents, the costs are joint and several unless the tribunal says otherwise. In Kapahi, two (2) arbitral awards had been enforced by Steele J., whose order held the respondents jointly and severally liable for $62,291.94 in costs with interest running from December 23, 2024 (¶ 24), and one individual respondent later moved to vary the order so that the individuals would not be liable for the costs. Myers J. dismissed the motion, holding at ¶ 40 that the tribunal had held “the Respondents” liable and that Steele J. had been correct in law to treat that liability as joint and several, and at ¶ 36 that “[t]he place for those arguments was on appeal rather than by efforts to re-argue the case under the guise of correcting a slip or due to new facts.” The costs of the enforcement application itself, $27,000, were added (¶ 26). A costs award that is to be assessed is enforced through s. 56(8), under which the assessment officer’s certificate, once the time for review has passed, “may be filed with the court and enforced as if it were a judgment of the court.”

The costs of the court proceedings surrounding an arbitration

The costs of the court proceedings that surround an arbitration are governed by s. 131 of the CJA and rule 57, and the court applies its own principles to them even where the arbitration itself was conducted on different ones. Three (3) situations recur. The first is the application that succeeds in displacing the tribunal altogether. In Electek (Costs), the tribunal had made no costs award because the court had held on a de novo application that the parties had no arbitration agreement, and Perell J. fixed the costs of the arbitration hearing as well as the costs of the application, on a partial indemnity basis, at $300,000 and $125,000 respectively (¶ 5), reasoning that “[i]t was as reasonable and appropriate for Greenfield to submit the parties’ dispute to arbitration as it was reasonable and appropriate for Electek to challenge the arbitrator’s jurisdiction” (¶ 32). In Clost, by contrast, where the court had set aside the arbitrator’s preliminary ruling on jurisdiction after a de novo hearing under s. 17(8) and the applicant sought the costs of the jurisdiction motion before the arbitrator as well as of the application, Bell J. awarded substantial indemnity costs because the respondents’ litigation conduct, which included altered documents and evidence that “evolved over time and was revisionist in nature,” was “worthy of sanction” (¶ 11), applying the two (2) circumstances in which Davies v. Clarington (Municipality), 2009 ONCA 722, permits costs above the partial indemnity scale (¶¶ 7, 9).

The second situation is the application to set aside, appeal or enforce an award. The costs of those applications follow the ordinary rules of the court. In the costs endorsement in Ibrahim, 2024 ONSC 5218, Stewart J. held that the arbitrator’s findings about the respondents’ conduct in the arbitration could not raise the scale of costs on the court motion, since “costs for the arbitration have already been ordered,” and fixed partial indemnity costs of $4,500 on divided success (¶¶ 11-14). In the costs decision in Fogler, 2021 ONSC 6064, Vermette J. refused substantial indemnity costs to the successful law firm at ¶ 8 on the basis that “[h]ard-fought litigation is insufficient to justify an elevated costs award,” and, because the firm had acted for itself without evidence of lost opportunity, awarded only nominal costs of $5,525.47 (¶¶ 11-12). The sums in the other cases discussed in this article are modest by comparison with the costs of the arbitrations themselves; the parties in Best Buy agreed on $25,000 (¶ 26), the unsuccessful applicant in Azurix paid $3,500 (¶ 14), the unsuccessful applicant in Rosenfeld paid $9,000 for two (2) applications (¶ 17), the party that lost in Inforica paid $15,000 and $25,000 (¶ 42), and the Court of Appeal in Weinstein refused leave with “[n]o costs” (¶ 4).

The third situation is the stay motion and the urgent motion in aid of the arbitration, which are dealt with in our articles on staying a court action in favour of arbitration in Ontario and on interim measures in aid of arbitration in Ontario. In each of those situations, the party seeking costs above the partial indemnity scale in court must bring itself within Davies; an arbitration conducted on the full indemnity norm does not carry that norm into the courtroom.

Practical considerations

Five (5) points decide most costs disputes, and all of them arise before the award.

The first is the agreement. The costs clause should say whether the arbitrator is to award costs at all, on what measure, whether offers to settle are to have rule 49 consequences, whether the costs of any prior mediation or negotiation step are recoverable, how the tribunal’s fees are to be advanced, and whether the arbitrator may order security for costs. Each of those questions has been litigated to the Superior Court and beyond because a clause was silent or ambiguous, and each can be answered in a sentence when the clause is drafted.

The second is the offer. An offer under s. 54(5) should be made early, in writing, on terms the tribunal can compare with the award, and should remain open until the hearing begins. It should be served on the other party and kept from the tribunal until the award on the merits, as s. 54(6) requires, and the party making it should ask at the outset that costs be reserved for written submissions after the award. An offer made the day before the hearing, as in Pagliaroli, or for a tactical sum, as in Nasjjec, will be given little weight.

The third is the record of costs. The arbitrator will be asked to assess reasonableness, and the party seeking costs should be able to show dockets that separate the arbitration from other matters, the jurisdictional phase from the merits, and lawyer time from client time. The deductions in Nasjjec for an expert’s corrective work and for time spent on matters outside the arbitration, the separate accounting in Electek (Costs) for the fees attributable to the jurisdictional issue, and the scrutiny of the litigation-support retainer in Schickedanz all show what the tribunal will look for.

The fourth is the costs submission itself. Whether or not the agreement adopts the Rules, a submission organized around the result, the offers, the factors in rule 57.01 by analogy, the reasonable expectations of the unsuccessful party and the proportionality of the claim to the amounts at stake gives the arbitrator the materials to exercise the discretion judicially and gives the award the best protection on review. A party seeking its full legal expenses should cite Schickedanz and Taseko; a party resisting should cite Electek (Costs) and, if the agreement adopts the court’s scale, Pagliaroli.

The fifth is the calendar after the award. A party who receives an award silent on costs has thirty (30) days under s. 54(3) to request a further award. A party who wants the arbitrator’s account assessed should start the s. 56(1) assessment promptly and separately from any challenge to the award. A party who wants to appeal or set aside the costs award has thirty (30) days under s. 47, which cannot be extended, and should check the agreement for the appeal clause before deciding whether leave is needed. And a party who holds a costs award should move under s. 50 as soon as the thirty (30) days have run, since, as Canada Soccer shows, nothing stays the award in the meantime. The firm’s arbitration deadline calculator computes the thirty (30) days under ss. 47 and 54(3) from the day the award was received.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract, lease, franchise and fraud disputes, and in the court proceedings that surround them. We draft and negotiate the costs provisions of arbitration agreements, make and respond to offers to settle under s. 54(5), prepare costs submissions and bills of costs for the tribunal, pursue and resist the assessment of arbitrators’ accounts under s. 56, bring and defend appeals and applications to set aside costs awards under ss. 45 and 46, and enforce costs awards under s. 50, including by garnishment and examination in aid of execution. Our arbitration practice and our commercial litigation practice are described on the pages linked here, and our shareholder disputes practice covers the buy/sell, oppression and management disputes in which the costs of an arbitration are most often fought over. Our articles on staying a court action in favour of arbitration in Ontario, on arbitrating a shareholder dispute in Ontario, on evidence in a commercial arbitration in Ontario, on interim measures in aid of arbitration in Ontario, on setting aside an arbitral award in Ontario, on appealing an arbitral award in Ontario and on enforcing an arbitral award in Ontario take the dispute from the stay motion to the award and its enforcement. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. The costs of an arbitration depend on the arbitration agreement, the offers made, the conduct of the parties and the arbitrator’s exercise of discretion, and the authorities cited should be read in full before they are relied on.

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The cases in which Ontario courts have granted or refused relief in aid of an arbitration are now numerous enough to show a pattern. The court will grant an interlocutory injunction preserving the status quo pending the arbitration where the applicant meets the test in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (“RJR-MacDonald”), gives the undertaking as to damages that rule 40.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), requires, and asks for relief that ends when the tribunal can deal with the matter itself. It will grant a Mareva injunction or appoint a receiver only on the ordinary and demanding tests for those remedies, and it will not grant either because the applicant holds an award it has not yet turned into a judgment. It will leave to the tribunal every question that the tribunal can decide, including the merits, the scope of the clause and the conduct of the arbitration, and it will refuse to enjoin the arbitration itself. This article takes the subject in that order, from the tribunal’s powers to the court’s, and closes with the international regime under the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5 (the “ICAA”), and the practical steps that decide these motions.

The tribunal’s powers and their limit

The tribunal’s authority to make interim orders rests on the Act, on the arbitration agreement and on any institutional rules the parties have adopted. Section 18(1) is the preservation power, and it extends to property and documents “that are the subject of the arbitration or as to which a question may arise in the arbitration,” together with an order that a party “provide security in that connection.” Section 31 adds the equitable remedies, and s. 41 provides that “[t]he arbitral tribunal may make one or more interim awards.” Section 25(6) requires the parties, subject to any legal objection, to comply with the tribunal’s directions, and ss. 18(2) and 25(7) each provide that “[t]he court may enforce the direction of an arbitral tribunal as if it were a similar direction made by the court in an action.” Institutional rules commonly go further in terms; in Farah v. Sauvageau Holdings Inc., 2011 ONSC 1819 (“Farah”), the ADR Chambers rule in play, quoted at ¶ 69, allowed the tribunal to “order whatever interim measures it deems necessary, including injunctive relief, measures for the protection or conservation of property and security for costs.”

The limit on those powers is the arbitration agreement itself. In Farah, a share purchase dispute in which fraud was alleged had been referred to arbitration, and the arbitrator, on an ex parte attendance, granted what Perell J. called an “arbitral-Mareva injunction” that purported to bind all persons with notice, directed banks to freeze accounts and deliver up records, and was then issued by court staff and served on the banks as if it were an order of the Superior Court. The vendors moved to set it aside and the purchaser cross-applied under s. 50 to enforce it. Perell J. held at ¶ 6 that “while Mr. Montgomery has the authority to make a binding injunctive award enjoining Mr. Farah (a preservation order), which award can be enforced pursuant to the enforcement provisions of the Arbitration Act, 1991, he did not have the jurisdiction to make an arbitral-Mareva injunction involving third parties, who are outside the arbitrator’s jurisdiction.” The reasoning at ¶¶ 57-63 is the foundation of the modern Ontario position. Arbitrators “depend upon the Arbitration Act, 1991 and the arbitration agreement for their jurisdiction,” and “the Legislature has not given arbitrators injunctive power over third parties and the private agreement of the parties to the agreement to arbitrate cannot invade the rights of non-parties” (¶ 57). Section 18(1) confers a preservation jurisdiction that “is expressly directed only at the parties to the arbitration and not toward third parties” (¶ 60), and s. 31 contains “nothing … that extends the arbitrator’s equitable jurisdiction to persons who are not parties to the arbitration procedure” (¶ 62). Perell J. concluded at ¶ 63 that “there is nothing in the Arbitration Act, 1991 that empowers arbitrators to grant Mareva injunctions or for that matter to appoint receivers, grant Anton Pillar orders, or grant Norwich orders,” because an order of that kind “is an order in which the arbitrator purports to enjoin or direct the conduct of strangers to the agreement to arbitrate who are not bound by the jurisdiction of the arbitral tribunal.”

The purchaser’s answer in Farah was that the primacy of arbitration left a “gaping hole” unless the arbitrator could do what the court could do. Perell J. rejected it at ¶ 66, stating, “[n]ecessity is not the mother of jurisdiction, and moreover, the Legislature recognizes in sections 6, 8 (1), and 18(2) that the courts are available to fill any ‘gaping holes’ in the efficacy of arbitration proceedings.” The institutional rules did not change the result; they “enabled Mr. Montgomery to make orders binding on the parties to the arbitration agreement, but these private contractual provisions do not and cannot confer on the arbitrator the court’s jurisdiction over third parties” (¶ 70). Michael Valo and Charles Powell summarize the law in the same terms in The Law of ADR in Canada: An Introductory Guide, 4th ed. (LexisNexis) at § 2.09[14][i], stating that “[t]o the extent that the interim measure or preservation order purports to bind any non-party, the order will be set aside by a court,” and that arbitrators are therefore “precluded from granting Mareva injunctions, from appointing receivers, granting Anton Piller orders, or granting Norwich orders.”

Two (2) further points about the tribunal’s orders follow from the Act. The first is that an interim procedural order is not an award. The Court of Appeal held in Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642 (“Inforica”), that an arbitrator’s order for security for costs was neither a ruling on the tribunal’s “jurisdiction to conduct the arbitration” under s. 17(1) nor an “award” under s. 46(1), so the Superior Court had no jurisdiction to set it aside on either route. Sharpe J.A. wrote at ¶ 18 that “[a] significant feature of the modern approach limiting access to the courts to review decisions of arbitrators is that there are no appeals from procedural or interlocutory orders,” and adopted at ¶ 29 the statement that only decisions determining the substantive issues should be termed awards, and that “[m]atters relating to the conduct of the arbitration are not awards but, rather, are procedural orders and directions.” A party dissatisfied with a tribunal’s interim order therefore has no recourse to the court under ss. 17(8) or 46, and must take the point up with the tribunal. The second point is that the tribunal’s interim orders need the court to enforce them against a party who will not comply, under ss. 18(2) and 25(7) for directions and under s. 50 for an interim award. In Ibrahim v. Koshi Bashi Inc., [2024] O.J. No. 4613 (S.C.J.) (“Ibrahim”), the arbitrator had circulated a consent order restraining dissipation and requiring financial disclosure, to which every respondent agreed, “but the arbitrator did not sign the order because the respondents did not pay their arbitration fees” (¶ 10), and the successful claimant was left to ask the court for the same relief after the award.

The court’s jurisdiction under section 8

Section 6 of the Act provides that no court shall intervene in matters governed by the Act except for four (4) purposes, the first of which is “[t]o assist the conducting of arbitrations” and the second “[t]o ensure that arbitrations are conducted in accordance with arbitration agreements.” Section 8(1) is the specific grant. Perell J. described the relationship at ¶¶ 58-59 of Farah; namely, that “[i]t is precisely because the Arbitration Act, 1991 recognizes that arbitrators do not have jurisdiction over third parties who are strangers to the arbitration agreement that the Act acknowledges the court’s jurisdiction to come to the aid of the arbitrator,” and that s. 6 “is complemented by s. 8(1) of the Act, which acknowledges the court’s jurisdiction to assist the conducting of arbitrations by making injunctive orders and orders for the detention, preservation and inspection of property and the appointment of receivers.”

The court’s power is cumulative with its ordinary jurisdiction, and the Commercial List has identified the sources more than once. In 1338121 Ontario Inc. v. FDV Inc., 2011 ONSC 3816 (“FDV”), D.M. Brown J. noted at ¶ 45 that the applicants relied on ss. 248 and 253 of the Business Corporations Act, R.S.O. 1990, c. B.16 (the “OBCA”), on s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”), and on s. 8(1) of the Act, and held at ¶ 47 that “[w]hether one draws on the remedial powers found in section 248 of the OBCA, or section 253 of the OBCA, or section 101 of the Courts of Justice Act, in my view the applicants have made out a case for interim injunctive relief.” In McGinn v. Bleeker, 2024 ONSC 6379 (“McGinn”), Holowka J. held at ¶ 48 that “I am satisfied that I have jurisdiction to grant injunctive relief in aid of arbitrations,” and listed at ¶ 49 three (3) sources; namely, the court’s jurisdiction under s. 101 of the CJA, the jurisdiction “provided by ss. 6 and 8 of the Arbitration Act, 1991 … to ensure that arbitrations are conducted in accordance with arbitration agreements, including by imposing interim measures,” and s. 247 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”), which allows a shareholder or director to apply for an order restraining a breach of a unanimous shareholder agreement. Holowka J. added at ¶ 49, citing Gay, Kaufman and Plotkin, Arbitration Legislation of Ontario: A Commentary, 4th ed. (Thomson Reuters, 2023) at p. 258, that the court’s interim measures “are intended to preserve ‘the ability of the arbitration process to deal with the issues’ pending a final determination by the arbitrator and, as such, ‘protecting the subject matter of the dispute or the evidence.’” Wilton-Siegel J. put the sources more briefly in NowVertical Group Inc. v. Trousdell, 2024 ONSC 595 (“NowVertical”), at ¶ 31, stating that “[t]his Court has jurisdiction under Rules 14.05(3)(d), (g) and (h), sections 6 and 8 of the Arbitration Act and Section 10(d) of the Separation Agreement to grant injunctive relief while the Arbitration is pending.” Tamar Meshel collects the same authorities in Arbitration Law: Statutes, Cases and Commentary (LexisNexis) at § 3.09[11], and notes that Ontario courts “have ordered interlocutory injunctions prior to the appointment of an arbitrator … as well as after an arbitral tribunal was appointed.”

The jurisdiction is rarely contested in a commercial case, and the respondent in McGinn did not argue it at all (¶ 47). A respondent in an international case sometimes does, and the answer in that case is art. 9 of the Model Law, discussed below, which provides that a request to a court for an interim measure of protection “is not incompatible with an arbitration agreement.” Institutional rules say the same thing. In Cash Cloud Inc. v. BitAccess Inc., 2022 ONSC 5622 (“Cash Cloud”), Hooper J. found jurisdiction at ¶ 33 on the terms of the contract and on rule 13.3 of the Canadian Arbitration Association’s Commercial Arbitration Rules, which provides that “[a] request for interim measures addressed by a Party to a court shall not be deemed incompatible with the Agreement to Arbitrate or a waiver of the right to arbitrate.”

The timing of the application and the tribunal’s priority

The court’s jurisdiction under s. 8(1) exists whether or not a tribunal has been appointed, and the reported cases divide on that line. Where no tribunal exists, the court is the only forum. In McGinn, the respondent had purported to terminate the applicant on September 6, 2024, the parties were before a judge for an urgent case conference on September 12, 2024, and the injunction issued on November 18, 2024, with an order “that the applicant’s claims against the respondents be referred to arbitration in accordance with the shareholders’ agreement and the notice of arbitration” (¶ 91). In Bombardier Transportation Canada Inc. v. Metrolinx, 2017 ONSC 2372 (“Bombardier”), Hainey J. enjoined the termination of a $770 million light rail vehicle contract for material default until the contractual Dispute Review Board had decided whether the contractor was in default. In 2859824 Ontario Ltd. v. Gen Digital Inc., 2025 ONSC 6360 (“Gen Digital”), the arbitration had been commenced but “[t]he arbitral tribunal had not been constituted when this application was heard” (¶ 15), and Kimmel J. granted the injunction “pending the outcome of the Arbitration but subject to any further order that the arbitral tribunal may make in the interim” (¶ 18). Her Honour explained at ¶ 19 that, since the request “has been fully briefed and argued, it would be highly inefficient for the court to render a decision on an interim interim basis only to require the parties to argue the interlocutory injunction motion all over again in the Arbitration proceeding,” so the injunction was granted “on the expectation that there will not be a further interim injunction hearing before the arbitral tribunal, unless the tribunal determines that to be appropriate.”

Where a tribunal exists, the court still has jurisdiction, but it expects the applicant to explain why the tribunal was not asked. In FDV, the parties had referred their dispute over a triggering event to arbitration, with a hearing scheduled for late August, when the respondents served a buy/sell notice, and the court restrained any further step on the notice “pending the decision of the arbitral tribunal presently scheduled to sit to hear the parties’ disputes at the end of August or until further order of this court” (¶ 53). In NowVertical, the injunction enforcing the standstill covenants was granted on the footing that it was “of an interim and interlocutory nature to run only until the Arbitrator renders his decision” (¶ 62). Meshel observes at § 3.09[11] that neither decision “discussed the possibility of obtaining the injunction from the arbitrator.” The international cases are more pointed. In International Steel Services Inc. v. Dynatec Madagascar S.A., 2016 ONSC 2810 (“International Steel”), Newbould J. noted at ¶ 31 that the question of interim relief “should have been dealt with before an arbitrator under the ICC emergency arbitration rules,” and treated the respondent’s refusal to respond to that request as “a factor that I take into account in considering the equities involved in the granting of an injunction.” In NorthStar Earth & Space Inc. v. Spire Global Subsidiary, Inc., 2024 ONSC 5060 (“NorthStar”), Kimmel J. observed at ¶ 43 that “[t]he court is only being asked to consider the interim measures (this injunction) because of the urgency of the situation and the September 12, 2024 deadline. This would/should have otherwise been determined by the ICC Tribunal.”

The converse rule is that the court will not interfere with the tribunal’s management of the arbitration. In Kingston Automation Technology Inc. v. Montebello Packaging, 2021 ONSC 2684 (“Kingston Automation”), Mew J. held at ¶ 34 that an application to stay the arbitral proceeding itself should be made to the arbitrator, and at ¶ 35 that the cost of continuing an arbitration while an award is challenged is not “a basis for displacing the kompetenz-kompetenz principle by interfering with the arbitrator’s management of the arbitration,” since wasted expense “can be compensated for, at least to some extent, by appropriate awards of costs.” Meshel notes at § 3.09[11] the older line that a court can intervene under s. 6 if the arbitrator “fails to control the process,” but that “[a]s long as an arbitrator remains in control of the process, a court should not intervene.”

The RJR-MacDonald test as applied pending arbitration

The test for an interlocutory injunction in aid of an arbitration is the test for any interlocutory injunction. Hainey J. applied it in Bombardier at ¶ 55; namely, “[t]here must be a serious question to be tried,” “[t]he applicant must suffer irreparable harm if the interlocutory injunction is not granted,” and “[t]he balance of convenience must favour the granting of the interlocutory injunction.” Wilton-Siegel J. adopted that approach in NowVertical at ¶ 32 as “the appropriate approach to determining an application for injunctive relief pending arbitration,” and Holowka J. applied it in McGinn at ¶ 62. Newbould J. raised the question in International Steel at ¶ 35 whether some other test might apply to interim relief pending an arbitration, was told “that the parties and the courts had just assumed that the RJR test applied,” and declined to import the divided American authority. His Honour’s qualification at ¶ 38 is nonetheless important, and the domestic cases describe the court’s role in the same way; namely, that “while RJR is instructive on such a motion, it must be recognized that the interim measure of protection is not necessarily a typical measure intended to last until the trial or other final disposition of the action. What is contemplated by the Ontario International Commercial Arbitration Act in my view is an interim measure pending the ability of the arbitration process to deal with the issues.” Holowka J. recorded in McGinn at ¶ 63 the further point that “not all parts of the RJR test must always be met by the moving party, and that the three parts must be assessed as a whole, that strength on one branch may compensate for weakness on another branch.”

The first branch depends on the nature of the order sought. The Supreme Court held in R. v. Canadian Broadcasting Corp., 2018 SCC 5 (“CBC”), at ¶ 15, that a mandatory interlocutory injunction requires a strong prima facie case, and at ¶ 16 that the judge “should examine whether, in substance, the overall effect of the injunction would be to require the defendant to do something, or to refrain from doing something.” The characterization question arises in almost every arbitration case, because the applicant usually wants the counterparty to keep performing a contract the counterparty says it has validly ended. The Ontario answer predates CBC. The Divisional Court held in TDL Group Ltd. v. 1060284 Ontario Ltd., [2001] O.J. No. 3614 (Div. Ct.), that “[a]n order preventing the denial of a right previously agreed to is very different from an order establishing a new right never agreed to and requiring a party to act accordingly,” and D.M. Brown J. followed that direction in 1323257 Ontario Ltd. v. Hyundai Auto Canada Corp. (2009), 55 B.L.R. (4th) 265 (S.C.J.). Newbould J. applied the distinction in International Steel at ¶¶ 42-46, holding that the applicant “seeks to enforce that agreement and not to establish some right it does not have” and was asking the court “to order Dynatec to stop taking steps that interfere with the rights of ISSI under the Agreement,” so the injunction was prohibitive. Holowka J. reached the same conclusion in McGinn at ¶¶ 56-61, where the injunction “would require the arbitral panel’s consideration of whether Mr. Bleeker is entitled, further to the shareholders’ agreement, to remove Ms. McGinn as an employee unilaterally before attempting to do so,” and Kimmel J. held in Gen Digital at ¶ 29 that an injunction restraining the decommissioning of software the respondent had covenanted to provide was prohibitive “even if the collateral effect is that Gen has to continue to provide the SecureKey Services in accordance with the MOSA to maintain the status quo.” Where the order would establish a new arrangement, the higher standard applies; in NorthStar, the order sought “would require Spire to do something: deliver data from the Failed Satellites and keep them operating” (¶ 36), and in Loan Away Inc. v. Western Life Assurance Co., 2018 ONSC 7229 (“Loan Away”), Sachs J. treated an order requiring an insurer to resume payments and keep policies in force as mandatory (¶¶ 37-38, 61).

The serious issue branch is a low one where it applies. In Gen Digital, Kimmel J. held at ¶ 32 that the threshold requires only that “the underlying issue to be tried is neither frivolous nor vexatious,” and declined at ¶¶ 40-41 to go further into the merits “[s]o as to avoid pre-determining the issues to be decided by the arbitral tribunal.” That restraint is a feature of these motions. Newbould J. said in International Steel at ¶ 49 that “[w]hether the Agreement continues is a matter for the arbitrator,” before finding a serious issue on the extension of the agreement, and Wilton-Siegel J. in NowVertical at ¶¶ 47-50 found a serious issue on the public press release while expressing a view that the private letters probably did not breach the standstill, each of which was for the arbitrator to decide. Where the contract itself promises continued performance during the dispute, the applicant’s case is stronger still; the clause in International Steel provided “that performance of the Agreement shall continue during arbitration proceedings” (¶ 44), and the respondent’s termination in the face of it was one of the serious issues (¶ 49).

Irreparable harm

The second branch asks whether the applicant will suffer harm that cannot be quantified in money or cured before the award. Hainey J. summarized the standard in Bombardier at ¶ 64; namely, “[e]vidence of irreparable harm must be clear and not speculative. However, the moving party need only establish a meaningful risk of irreparable harm. This is a relatively low standard,” which His Honour described as a “meaningful doubt as to the adequacy of damages if the injunction is not granted.” Newbould J. applied the same flexible approach in International Steel at ¶ 51, citing the statement of McLachlin J.A., as she then was, that “clear proof of irreparable harm is not required. Doubt as to the adequacy of damages as a remedy may support an injunction.” The applicant must nonetheless prove the harm. In Loan Away, Sachs J. held at ¶ 57 that “[a]n assertion of irreparable harm in oral argument without a supporting evidentiary record cannot meet this threshold,” and in NorthStar, Kimmel J. agreed at ¶ 59 that the applicant’s assertions about lost customers and employees “are just that,” before finding irreparable harm on other grounds.

The cases identify the kinds of harm that qualify when an arbitration is the forum. The first is the loss of the arbitral remedy itself. In FDV, the issuance of a buy/sell notice during the arbitration of a triggering event would, if the respondents were right, nullify the applicants’ option to buy the respondents’ shares at a discount, and D.M. Brown J. held at ¶ 50 that “[t]hat potential shift in ownership rights strikes me as lying at the irreparable harm end of the scale of kinds of damages.” In McGinn, Holowka J. found at ¶ 74 that excluding the applicant from management while the arbitration proceeded “diminishes the likelihood of an arbitral panel making an order to implement” the shotgun remedy she sought, because “the panel would not find it feasible to order a remedy that could have the effect of destabilizing Assurance with the reinstallation of Ms. McGinn after months of exclusion.” The second is the loss of a business, a reputation or a workforce that cannot be rebuilt after the award. Newbould J. accepted in International Steel at ¶¶ 54-60 that the loss of business reputation and the dispersal of the applicant’s expatriate employees were a “meaningful risk of irreparable harm,” and Hainey J. accepted in Bombardier at ¶¶ 68-72 that the stigma of a termination for default on future bids, and the loss of the supply chain and workforce needed to resume performance if the contractor won, were harms with “no realistic way to quantify.” Kimmel J. went further in Gen Digital, rejecting at ¶¶ 53-54 the argument that a lost line of business is reparable because valuators can value it, on the basis that the argument “would render injunctions almost impossible to obtain in commercial cases,” and holding that “conduct which threatens to extinguish a counterparty’s business unequivocally gives rise to ‘irreparable harm’ and can and should be enjoined.” The third is harm that a contractual limitation makes irrecoverable. In NorthStar, the limitation of liability clause “may restrict the quantum and type of damages that NorthStar can claim” (¶ 60), and the deorbiting of the satellites “will be irreversible if it happens” (¶ 63), so the harm was irreparable (¶ 64). The fourth is damage to goodwill in a public company; in NowVertical, further publicity of the dispute with the largest shareholder would “raise serious doubts among the investing public regarding the Company’s future,” and Wilton-Siegel J. held at ¶ 57 that “such damage to the Company’s goodwill is, by its very nature, unquantifiable and non-compensable.”

The parties’ own contract can settle the point. D.M. Brown J. found support for irreparable harm in FDV at ¶ 50 in a clause by which the parties acknowledged “that damages and other remedies at law will not be a sufficient remedy in the event of a breach by any party of the terms of this Agreement,” and Kimmel J. relied in Gen Digital at ¶¶ 28 and 47 on an article by which the respondent had agreed not to “wilfully refuse to provide all or any portion of the SecureKey Services in violation or breach of the terms of [the MOSA].” A claim that is only about money is the opposite case. In Toronto Standard Condominium Corp. No. 2364 v. Toronto Standard Condominium Corp. No. 2442, 2021 ONSC 7689, Myers J. held at ¶ 46 that “[i]njunctions are only granted if, while waiting for the arbitration, the moving party will suffer irreparable harm that cannot be compensated later by payment of money if it wins the arbitration,” and that “[i]njunctions pending later decisions are not granted when all that is in issue is money and there is no question of the other side’s ability to pay if ordered to do so.”

The balance of convenience and the equities

The third branch asks which party will suffer the greater harm from the grant or refusal of the order pending the award. Several themes recur. The first is that the interim period is short, and the court weighs the inconvenience to the respondent against that horizon. In FDV, the arbitration was two (2) months away, no party showed that waiting would prejudice the company, and “the balance of convenience favours preserving the respective shareholder positions of the parties pending the arbitration in August” (¶ 51). In NowVertical, Wilton-Siegel J. noted at ¶ 62 that the relief would “run only until the Arbitrator renders his decision,” and that the respondent had shown no real harm during that limited period (¶ 64). The second is that a respondent cannot count as inconvenience the cost of performing the contract it made. Newbould J. held in International Steel at ¶ 63 that “[h]aving to carry out that contract which it chose to make in the first place can hardly be said to be harm in this case to Dynatec,” and Kimmel J. held in Gen Digital at ¶¶ 63-64 that “[t]he burden on Gen to perform its contractual obligations does not tip the balance of convenience back in its favour.” The third is that the court will not reward tactics. The respondent in International Steel had pressed ahead with a takeover “in the face of the arbitration and did what it could to delay any arbitration,” and Newbould J. held at ¶ 65 that “[i]t does not lie in its mouth to now complain that its tactical position will be of nought,” adding at ¶ 67 that the clean hands and “one who seeks equity” maxims “apply not only to the party seeking an injunction but also to the party opposing it.” Kimmel J. applied that reasoning in Gen Digital at ¶ 66, where the respondent “took a calculated risk” that a unilateral termination would force the applicant back to the bargaining table, and held that “[t]he balance of convenience is not about creating or preserving strategic advantages that one party has sought to obtain by its course of conduct leading up to the litigation.”

The fourth theme is the integrity of the arbitral process. D.M. Brown J. saw “an element of unfairness in a shareholder disputing allegations that it is in material default of the USA, requiring that the dispute proceed to arbitration, and then attempting to render the arbitration moot by invoking the buy/sell provisions” (FDV at ¶ 49), and Holowka J. held in McGinn at ¶ 88 that, if the injunction were refused, “the integrity of the arbitration process will be compromised.” The fifth is the reluctance of courts to force parties to work together once trust is gone. Sachs J. relied on it in Loan Away at ¶¶ 59-60, where “there is a complete lack of trust between the parties.” Holowka J. distinguished the same line in McGinn at ¶¶ 84-87, on the basis that the parties had agreed to arbitrate, the respondent’s evidence of lost morale was inadmissible hearsay, and FDV “confirms that interim injunctive relief requiring parties to continue working together pending arbitration may be appropriate where they have agreed to adjudicate the merits of their dispute through arbitration.” The sixth is that the court can shape the order to reduce the burden. In NorthStar, the applicant offered to pay for the operation of the satellites during the injunction, and Kimmel J. ordered a payment of USD $8,000 per satellite per month, to be “revisited upon a proper record, preferably before the Arbitration Tribunal” (¶ 70). In Cash Cloud, Hooper J. would have granted only “a time-limited injunction to maintain the status quo” of sixty (60) days, because the applicant was already replacing the respondent’s software (¶¶ 60-61).

The undertaking as to damages

Rule 40.03 provides that, on a motion for an interlocutory injunction or mandatory order, the moving party “shall, unless the court orders otherwise, undertake to abide by any order concerning damages that the court may make if it ultimately appears that the granting of the order has caused damage to the responding party for which the moving party ought to compensate the responding party.” The undertaking is the price of the order, and the cases in aid of arbitration treat its absence as fatal in a commercial dispute. In Loan Away, the applicant gave no undertaking and asked to be excused because the respondent was holding $1.4 million of its money; Sachs J. held at ¶ 34, following Catalyst Capital Group Inc. v. Moyse, 2015 ONSC 4388, that “in commercial cases, an undertaking as to damages is almost invariably required and in the absence of such an undertaking the court will dismiss the motion for an injunction,” and at ¶ 36 that the failure “is a sufficient basis on which to dismiss its request for interlocutory injunctive relief.” In Cash Cloud, the applicant was a Nevada company with no assets in Ontario that wanted an order forcing the respondent to stay in business with it; Hooper J. raised the missing undertaking at the hearing, none was offered, and the application was dismissed on that ground alone, Hooper J. stating at ¶ 58 that “[t]here is no evidence explaining why Cash Cloud refused to provide this undertaking. That was its choice. But it was a fatal choice in this application.” The undertaking should be in an affidavit sworn by a person with authority to bind the applicant; Hooper J. adopted at ¶ 54 the holding in Guelph Taxi Inc. v. Guelph Police Service, 2016 ONSC 3671, that an oral undertaking given at the hearing is not enough.

The sufficiency of the undertaking is a different question. In Bombardier, the undertaking was given on the first day of the hearing, the respondent complained that it could not test the applicant’s financial strength, and Hainey J. accepted the undertaking at ¶ 56 because the applicant had already posted irrevocable letters of credit for $153 million as performance security. In NorthStar, the respondent attacked the undertaking as “hollow” on the strength of confidential board material it had obtained as a board observer, and Kimmel J. held at ¶¶ 80-82 that no binding authority made an insufficiency of assets “on its own” a ground to refuse an injunction, and that she had “some concerns about the proposition that a party seeking an injunction may be subject to an inquiry into the sufficiency of its assets (akin to what the court engages in on motions for security for costs).” Her Honour returned to the point in Gen Digital at ¶¶ 67-68, holding that “there is no basis on which the court could conclude today that the undertaking as to damages is not genuine or is worthless,” and that whether the applicant’s parent could be held to the undertaking “is a matter for another day.” A Mareva injunction carries the same requirement; the claimant in Ibrahim asked the court to waive the undertaking on a post-award Mareva motion, and Stewart J. refused, describing it at ¶ 20 as “something that the applicant ‘must’ give.”

Mareva injunctions and receivers in aid of an arbitration

The court’s power under s. 8(1) to grant interim injunctions and appoint receivers “in arbitrations as in court actions” includes the Mareva injunction, but the test is the one that applies in any action, and the cases show how seldom it is met. Perell J. stated the elements in Farah at ¶ 110; namely, “(1) a strong prima facie case; (2) that the defendant has assets in the jurisdiction; and (3) that there is a serious risk that the defendant will remove property or dissipate assets before judgment,” citing Chitel v. Rothbart (1982), 39 O.R. (2d) 513 (C.A.), and United States of America v. Yemec (2005), 75 O.R. (3d) 52 (C.A.). The Commercial List now commonly states the test in the six (6) parts set out by the Divisional Court in SFC Litigation Trust (Trustee of) v. Chan, 2017 ONSC 1815 (Div. Ct.), at ¶ 60, which Wilton-Siegel J. quoted in Ballantry Construction Management Inc. v. GR (CAN) Investment Co., 2024 ONSC 2129 (“Ballantry”), at ¶ 36; namely, a strong prima facie case, assets in the jurisdiction, “a real risk that the defendant will remove his assets from the jurisdiction or dissipate those assets to avoid judgment,” irreparable harm, a balance of convenience favouring the injunction, and the undertaking as to damages.

Robert J. Van Kessel and Paul S. Rand, in Law of Fraud in Canada (LexisNexis), ch. 9, trace the Ontario position to Aetna Financial Services Ltd. v. Feigelman, [1985] 1 S.C.R. 2, in which Estey J. described the injunction as the right “to freeze exigible assets when found within the jurisdiction,” subject to the condition that “unless there is a genuine risk of disappearance of assets, either inside or outside the jurisdiction, the injunction will not issue” (§ 9.20). The authors record at § 9.25 the Manitoba Court of Appeal’s observation in Clark v. Nucare PLC, [2006] M.J. No. 320 (C.A.), that “Ontario, and most other Canadian courts, have adopted the approach that ‘proof of a serious risk of removal or disposition of assets is required even where the action is based on fraud and it is shown that the defendant has committed a fraudulent act,’” in contrast with the “flexible” approach of British Columbia, and they add at § 9.26 the rule from 663309 Ontario Inc. v. Bauman (2000), 190 D.L.R. (4th) 491 (S.C.J.), that “Mareva orders are not available to freeze a defendant’s assets while the plaintiff looks for evidence that would raise a prima facie case.” Two (2) further principles from the same chapter bear on any Mareva motion. The first is proportionality; the order “should not tie up assets beyond the value necessary to satisfy any likely judgment,” and the applicant must show “that the extent of the viable claim bears some relation to the value of assets sought to be impounded or frozen” (§ 9.28, citing Tracy v. Instaloans Financial Solutions Centres (B.C.) Ltd., 2007 BCCA 481, at ¶ 56). The second is the ex parte applicant’s duty of full and frank disclosure, under which the applicant must be “fastidious in disclosing to the court all important aspects of the evidence, and in pointing out what defences might be available to the defendants,” and “must not, in such a situation, exaggerate or misrepresent the strength of their case” (§ 9.27, citing Green v. Jernigan, 2003 BCSC 1097, at ¶ 24). The order itself does not give the applicant priority; Perell J. adopted in Farah at ¶ 111 the statement in Morden and Perell, The Law of Civil Procedure in Ontario, that “[a] Mareva injunction is not meant to give the plaintiff any priority over other creditors, nor to prevent the defendant from carrying on business in the usual course and paying other creditors.”

The arbitration cases apply those rules without adjustment. In Farah, having quashed the arbitral order, Perell J. considered the purchaser’s alternative request for a judicial Mareva against each vendor, refused it against one of them because the case against her was “pathetically weak” (¶ 115), and granted it against the other on a changed record and with the arbitration imminent, on the basis that the purchaser “has just barely satisfied the criterion for the granting of a Mareva injunction” (¶ 123). In Ballantry, an award creditor holding awards of $4,104,393.37 moved, pending its application under s. 50 to enforce and the debtor’s application to set aside, for a preservation order or an injunction restraining the debtor from dealing with its assets. Wilton-Siegel J. held that the motion was in substance for a Mareva injunction (¶ 28), that the creditor had shown a strong prima facie case for enforcement (¶ 87), and that the motion nonetheless failed on the risk of dissipation, since “dishonesty on its own is not sufficient to evidence a risk of dissipation of assets” (¶ 48), “evidence of insolvency is not automatically evidence of a risk of dissipation” (¶ 55), and the creditor’s position “is based entirely on speculation” (¶ 57). His Honour added at ¶ 92 that “[a] Mareva injunction should not however be available in circumstances of an alleged insolvency to a party that lacks standing to seek a receivership,” and at ¶ 93 that the creditor’s inability to execute before judgment “is the natural consequence of its acceptance of arbitration” and counted for nothing on the balance of convenience. In Ibrahim, the claimant obtained judgment under s. 50 on awards for $75,000 and $223,585.71 but failed in a motion for a worldwide Mareva injunction, because the relief sought was “in the nature of a permanent injunction, which is not appropriate relief on a motion within an application” (¶ 19), no undertaking was offered, and “the test for a worldwide Mareva injunction is not met” (¶ 21). Stewart J. noted at ¶ 22 that the claimant could still seek an order “compelling the respondents to provide financial information and prevent the dissipation or disposal of assets in Ontario,” if an undertaking were given. A strong prima facie case alone does not carry the motion; in Sherif Gerges Pharmacy Professional Corp. v. Niam Pharmaceuticals Inc., 2026 ONSC 1720 (Div. Ct.), the motion judge had found a strong prima facie case of conversion but refused a Mareva injunction over the proceeds of a property sale because the other elements were not met, and the Divisional Court dismissed the appeal with costs of $35,000 (¶¶ 18-20, 73).

A receiver stands on the same footing. Section 101 of the CJA allows a receiver or receiver and manager to be appointed by interlocutory order “where it appears to a judge of the court to be just or convenient to do so,” rule 41 governs the appointment, and s. 8(1) of the Act makes those powers available in aid of an arbitration. Perell J. confirmed in Farah at ¶ 63 that the appointment of a receiver is beyond the tribunal, and Wilton-Siegel J. treated receivership in Ballantry at ¶ 92 as one of “[t]he traditional insolvency remedies” that remain open to an award creditor with standing. The appointment is intrusive and the court is slow to make it over an operating business while the merits are unresolved, but where the dispute is between the shareholders of a company whose management has broken down, a receiver or an inspector under the OBCA may be the practical way to keep the company intact until the award.

Preservation orders, certificates of pending litigation and the stay of time

Rule 45.01(1) allows the court to “make an interim order for the custody or preservation of any property in question in a proceeding or relevant to an issue in a proceeding,” and rule 45.02 allows a fund whose ownership is in question to be paid into court or secured. Section 8(1) makes those powers available pending an arbitration, and the tribunal has a parallel power under s. 18(1) over property “that are the subject of the arbitration or as to which a question may arise.” The limit of rule 45.01 is the phrase “property in question.” Wilton-Siegel J. held in Ballantry at ¶¶ 24-28, following Shanghai Lianyin Investment Co. v. Lu, 2023 ONSC 399, that the rule reaches only “an asset over which a party asserts a legal right in the proceeding or an asset that could be evidence in the proceeding,” so that an award creditor who “will become an unsecured creditor of the Respondent” if the award is recognized cannot use it to freeze the debtor’s general assets. The rule is apt for evidence. In Cash Cloud, Hooper J. refused the injunction for want of an undertaking but ordered the respondent under rule 45.01 “to preserve Cash Cloud’s customer data for a period of sixty (60) days” and to let the applicant download it (¶¶ 36-39, 63). Family arbitrations show the same jurisdiction at its most urgent; in Nugent v. Nugent, 2022 ONSC 7370, Madsen J. granted an ex parte temporary preservation order under ss. 6 and 8 during a mediation-arbitration, reasoning at ¶ 9 that an award of the arbitrator “would be unlikely to be enforced by financial institutions without having been taken out as a Court Order. Meanwhile, time would pass during which further dissipation could transpire.”

A certificate of pending litigation is a court remedy that no arbitrator can issue, and the Superior Court has granted it in aid of an arbitration. In Berthault v. Green Urban People Ltd., 2021 ONSC 8039 (“Berthault”), purchasers of new homes whose agreements the builder had purported to terminate under the Tarion warranty, which required disputes about termination to be arbitrated under the Act, applied for certificates over the land. Nicholson J. held at ¶ 34 that “the court has the jurisdiction to authorize the issuance and registration of a Certificate of Pending Litigation even if the underlying dispute must be resolved through arbitration pursuant to agreement between the parties,” relying on ss. 6, 8 and 18 of the Act (¶¶ 36-38) and on 2033363 Ontario Ltd. v. Georgetown Estates Corp., [2006] O.J. No. 687 (S.C.J.), where Master Albert had observed that obtaining a certificate from an arbitrator “would be a lengthy and cumbersome process” (¶ 29). The certificates issued on terms that the purchasers “initiate the arbitration process, or cooperate with the Respondents in doing so … within 20 days” (¶ 62). Leave to appeal to the Divisional Court was granted in Green Urban People Ltd. v. Berthault, 2022 ONSC 737 (Div. Ct.), on “the issue as to whether the court can issue a Certificate of Pending Litigation in the face of an arbitration agreement,” and no decision on the appeal has been reported.

The court can also stop a contractual clock. In 407 ETR Concession Co. v. Ontario (Minister of Transportation) (2005), 199 O.A.C. 221 (C.A.), the Province served a notice of default that would end the highway lease if the concessionaire did not cure within sixty (60) days, the concessionaire invoked the arbitration clause, and the Court of Appeal held that, once the application judge had found that the concessionaire’s right under the cure period could be lost and that the agreement gave no timely remedy, an interim order maintaining the parties’ rights should have been made. Hainey J. applied that decision in Bombardier at ¶¶ 81-84, making the injunction effective from the date of the notice of default “so that it stays the running of any relevant cure periods in the Contract,” while leaving the meaning of the cure periods “for the DRB to determine.”

International arbitrations and the Model Law

Where the arbitration agreement is international, the ICAA governs, and s. 5(1) gives the force of law in Ontario to the UNCITRAL Model Law on International Commercial Arbitration as amended in 2006 (the “Model Law”). Article 9 provides that “[i]t is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.” Chapter IV A, added in 2006, is the code for the tribunal’s interim measures. Article 17(2) defines an interim measure as a temporary measure by which the tribunal orders a party to “[m]aintain or restore the status quo pending determination of the dispute,” to “[t]ake action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself,” to “[p]rovide a means of preserving assets out of which a subsequent award may be satisfied,” or to “[p]reserve evidence that may be relevant and material to the resolution of the dispute.” Article 17A sets the conditions; the requesting party must satisfy the tribunal that “[h]arm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted,” and that “[t]here is a reasonable possibility that the requesting party will succeed on the merits of the claim.” Articles 17B and 17C allow a tribunal to grant a “preliminary order” without notice, directing a party not to frustrate the purpose of a requested measure, which expires after twenty (20) days and “shall be binding on the parties but shall not be subject to enforcement by a court.” Article 17E allows the tribunal to require security, art. 17G makes the requesting party “liable for any costs and damages caused by the measure or the order to any party if the arbitral tribunal later determines that, in the circumstances, the measure or the order should not have been granted,” and arts. 17H and 17I provide that a tribunal’s interim measure “shall be recognized as binding and … enforced upon application to the competent court,” subject to narrow grounds of refusal. The tribunal’s measures under the Model Law remain measures against the parties; the court is still the forum for relief against banks and other strangers to the agreement.

Article 17J is the court’s provision, and it provides that “[a] court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.” The Superior Court has read that last sentence as an invitation to adapt the domestic test. In International Steel, Newbould J. granted an interim protective order under art. 9 restraining the respondent from interfering with the applicant’s contractual rights pending an ICC arbitration, on the RJR-MacDonald principles but as “an interim measure pending the ability of the arbitration process to deal with the issues” (¶ 38), and the order was expressed to be “in effect until and unless an order is made in the arbitration to the contrary” (¶ 72). In NorthStar, the applicant sought a mandatory order, with a deadline two (2) days after the hearing on which the respondent would lose the ability to deliver data from three (3) failed satellites, requiring the respondent to keep them operating pending an ICC arbitration it had not yet commenced. Kimmel J. accepted at ¶¶ 41-44 that, in consideration of the specific features of the arbitration, the merits standard was the art. 17A standard of “a reasonable possibility that it will succeed on the merits of the claim,” which “falls somewhere on the spectrum between serious issue to be tried and strong prima facie case (although closer to serious issue to be tried),” rather than the strong prima facie case that CBC would otherwise require for a mandatory order, and found that standard met at ¶ 55. Her Honour treated the undertaking as to damages as a requirement “embodied in Article 17g of the Model law” (¶ 77), granted the injunction within two (2) days of the hearing, and ordered the applicant to “commence the arbitration immediately (by no later than September 20, 2024) and request that it be expedited” (¶ 95). Meshel notes at § 7.08[10] that earlier cases applied the strong prima facie case requirement to a mandatory injunction pending an international arbitration, and Kimmel J. herself confined the point in Gen Digital at ¶ 23 to “the context of the particular arbitration proceedings in that case.”

The institutional rules complete the picture. Article 28(2) of the ICC Rules, quoted in International Steel at ¶ 32, provides that before the file is transmitted to the tribunal, “and in appropriate circumstances even thereafter,” the parties “may apply to any competent judicial authority for interim or conservatory measures,” and that such an application “shall not be deemed to be an infringement or a waiver of the arbitration agreement.” The ICC’s emergency arbitrator provisions give a party a tribunal-side route before the tribunal exists, and Newbould J.’s remarks at ¶ 31 of International Steel show that a respondent who stonewalls that route will pay for it on the equities.

The anti-arbitration injunction

The court’s injunctive power in aid of an arbitration does not extend to enjoining the arbitration because one party says the tribunal lacks jurisdiction. In NetSys Technology Group AB v. Open Text Corp., [1999] O.J. No. 3134 (S.C.J.), the plaintiff sought an injunction limiting the scope of an international arbitration to the matters it conceded were arbitrable, and the defendant moved to stay the action. Stinson J. held at ¶ 35 that art. 16 of the Model Law “expressly contemplates that the arbitral tribunal itself will first decide the matter of its own jurisdiction,” and at ¶ 40 that the conclusion “applies equally to the motion brought by Open Text for a stay of the court proceedings commenced by NetSys and to the cross-motion by NetSys for an injunction to limit the scope of the arbitration. In either case, the question of the scope of the authority conferred upon the arbitrator by the parties’ arbitration clause is to be decided by the arbitrator.” The injunction was refused and the action stayed (¶ 51). Section 17(1) of the Act gives a domestic tribunal the same competence, and the competence-competence principle described in our article on staying a court action in favour of arbitration in Ontario leads to the same result. In Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 894, the party resisting the arbitration applied under s. 48 for a declaration that it was invalid and moved for an interim stay of the arbitration; Myers J. declined to stay it, on the footing that “[t]he competence-competence principle suggests the panel should rule on its jurisdiction” (¶¶ 10, 27), the panel did so, and the question came back to the court under s. 17(8) only after the preliminary ruling (¶ 14). Kingston Automation applies the same restraint to a request to stay an arbitration pending a challenge to an interim award (¶ 34).

The arbitration clause

The clause can make these motions easier or harder, and four (4) drafting points follow from the cases. The first is an express reservation of the right to seek interim relief from the court. The clause in Loan Away excepted “an application for temporary injunctive relief” from the obligation to arbitrate (¶ 63), the rule in FDV provided that an aggrieved party “may apply to a court for injunctive or mandatory injunctive relief to remedy the situation pending the conduct of arbitration” (¶ 39), and the separation agreement in NowVertical was itself one of the sources of the court’s jurisdiction (¶ 31). Section 8(1) and art. 9 make such a clause unnecessary in law, but it removes the argument that the application is a step inconsistent with the agreement, and it tells the counterparty in advance where the urgent motion will be heard. The second is a covenant that performance continues during the dispute. The clause in International Steel “that performance of the Agreement shall continue during arbitration proceedings” (¶ 44) supplied both the serious issue and the characterization of the order as prohibitive, and the covenant in Gen Digital not to “wilfully refuse to provide all or any portion of the SecureKey Services” did the same work (¶¶ 28-29, 47). The third is an acknowledgement that a breach will cause irreparable harm and that injunctive relief is an appropriate remedy. D.M. Brown J. gave weight to such a clause in FDV at ¶ 50, and Kimmel J. held in Gen Digital at ¶ 61 that the respondent’s agreement that the applicant was entitled to seek “injunctive relief” on a default, “together with the irreparable harm already established, tips the balance of convenience in favour of Interac.” The fourth is the choice of institutional rules that give the tribunal interim powers and an emergency arbitrator, so that the tribunal-side route exists before the tribunal does.

The clause cannot do two (2) things. It cannot give the tribunal jurisdiction over strangers, so a party whose real concern is the counterparty’s bank accounts, its lenders or a purchaser of its assets must plan on a court motion whatever the clause says (Farah at ¶ 70). Nor can it stop the court from granting relief against a party, since s. 8(1) and art. 9 are the Legislature’s allocation and the agreement cannot oust them, although a clause that commits the parties to seek interim measures from the tribunal first will weigh on the equities in the way International Steel and NorthStar describe.

Practical considerations

The first consideration is speed. Each of the successful applications was brought promptly and heard on an urgent basis; the injunction in NorthStar was argued on September 10, 2024 and granted on September 12, 2024, the parties in Gen Digital extended the decommissioning date by agreement to let the court decide, and Kimmel J. remarked at ¶ 16 that the court “expects parties to conduct themselves responsibly in this manner and appreciates when they do so.” Delay cuts the other way on irreparable harm (Gen Digital at ¶ 42), and a consent interim order to hold the position until the hearing, as in McGinn at ¶ 4 and Berthault at ¶ 3, is the usual first step.

The second is the record. The applicant needs affidavit evidence of the harm, by a witness who can be cross-examined, and the cases turn on it. Newbould J. accepted the detailed evidence of the applicant’s officer about its reputation and its expatriate workforce in International Steel (¶¶ 55-58), Hainey J. accepted the evidence of the applicant’s project commercial manager in Bombardier (¶¶ 65-72), and Sachs J. and Kimmel J. gave no weight to assertions made in argument or in general terms in Loan Away (¶ 57) and NorthStar (¶ 59). The respondent’s evidence is held to the same standard; Holowka J. rejected the respondent’s evidence of lost morale in McGinn as “inadmissible hearsay” (¶ 82), and Wilton-Siegel J. rejected the respondent’s hearsay about disparagement in NowVertical (¶ 52). The undertaking as to damages belongs in the applicant’s affidavit, sworn by someone with authority to give it.

The third is the framing of the order. The applicant should describe the relief as the preservation of a right already agreed to, identify the covenant it enforces, and explain why the effect is to stop the respondent from acting rather than to make it act, since that characterization decides whether the first branch of the test is a serious issue or a strong prima facie case. The order should name its end point; namely, the tribunal’s decision on interim relief or the award, with liberty to the tribunal to vary it, as in International Steel at ¶ 72, Bombardier at ¶ 78 and Gen Digital at ¶ 69. An applicant who has not yet commenced the arbitration should expect to be ordered to do so promptly and to seek expedition, as in NorthStar at ¶ 95 and Berthault at ¶ 62, and should offer those terms before they are imposed.

The fourth is the choice of forum. Where the tribunal exists and the relief is against a party, the tribunal is the first stop, and a party that goes to court without asking the tribunal should be ready to explain the urgency. Where no tribunal exists, or the relief must bind a third party, or the remedy is one only a court can grant, the court is the forum, and the application should say so in terms, citing s. 8(1) or art. 9 and the agreement. Where the relief is a Mareva injunction, the applicant must prove a real risk of dissipation, with evidence of conduct aimed at defeating the award, and must be proportionate in what it asks to freeze; Ballantry shows that a strong case on the merits and a debtor of doubtful solvency are not enough.

The fifth is cost. The applicant in NorthStar recovered partial indemnity costs of $195,000 on an urgent motion decided within two (2) days of the hearing, the applicant in Gen Digital recovered $75,000 by agreement, the unsuccessful award creditor in Ballantry paid $19,827, the claimant in Ibrahim recovered $4,500 on divided success, the appellant in Sherif Gerges paid $35,000 on the appeal, and the party that fought the arbitrator’s security for costs order through two (2) levels of court in Inforica paid $15,000 on the appeal and $25,000 below. A motion of this kind is a trial in miniature, and the party that loses it usually pays for both sides of it.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract, lease, franchise and fraud disputes, and in the court proceedings that surround them, including urgent applications under s. 8(1) of the Act and art. 9 of the Model Law for injunctions, preservation orders, certificates of pending litigation, Mareva injunctions and the appointment of receivers in aid of an arbitration, requests to the tribunal for interim measures under ss. 18 and 31 of the Act and art. 17 of the Model Law, the enforcement of a tribunal’s interim orders under ss. 18(2), 25(7) and 50, and the defence of each of those motions. We also draft and review the arbitration clauses that decide where the urgent motion will be heard. Our arbitration practice and our commercial litigation practice are described on the pages linked here, our shareholder disputes practice covers the buy/sell, oppression and management disputes in which these motions most often arise, and our urgent commercial remedies practice and civil fraud practice cover the Mareva, Anton Piller and Norwich orders discussed above. Our articles on staying a court action in favour of arbitration in Ontario, on arbitrating a shareholder dispute in Ontario, on evidence in a commercial arbitration in Ontario, on setting aside an arbitral award in Ontario, on appealing an arbitral award in Ontario and on enforcing an arbitral award in Ontario take the dispute from the stay motion to the award and its enforcement. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Whether interim relief will be granted depends on the arbitration agreement, the evidence of harm, the undertaking offered and the conduct of the parties, and the authorities cited should be read in full before they are relied on.

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The law of the stay motion was reorganized by the Supreme Court in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41 (“Peace River”), which set out at ¶¶ 76-89 a two-part framework that the Court of Appeal for Ontario adopted in Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Ltd., 2023 ONCA 260 (“Husky Food”) at ¶¶ 23-26, in place of the five (5) questions of Haas. The moving party must show an “arguable case” that four (4) technical prerequisites are met, and the stay then follows unless the party resisting it proves, on a balance of probabilities and in a “clear” case, that one of the statutory exceptions applies. The competence-competence principle underlies that framework; a challenge to the arbitrator’s jurisdiction is for the arbitrator in the first instance, and the court decides it only where the challenge raises a pure question of law or a question of mixed fact and law that needs no more than a superficial look at the record, or where arbitration is, in the words of Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”) at ¶ 47, “a brick wall” the party cannot get past. The Court of Appeal has applied the framework in a run of recent decisions, including Goberdhan v. Knights of Columbus, 2023 ONCA 327 (“Goberdhan”), Ismail v. First York Holdings Inc., 2023 ONCA 332 (“Ismail”), and Lochan v. Binance Holdings Ltd., 2024 ONCA 784 (“Binance”), each of which upheld the refusal of a stay, and Irwin v. Protiviti, 2022 ONCA 533 (“Irwin”), where the motion judge left the validity of the clause to the arbitrator and the Court of Appeal quashed the appeal.

This article sets out the law of the stay motion in Ontario as it stands in October 2026. It covers the policy and the text of s. 7, the two-part framework, the arbitration agreement and who is a party to it, the scope of the clause and the characterization of the claims, the competence-competence principle and the two (2) situations in which the court decides jurisdiction itself, the “step in the proceeding” and undue delay, the five (5) exceptions in s. 7(2), partial stays under s. 7(5), the stay of a proceeding that engages an international arbitration agreement under the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5 (the “ICAA”), the bar on appeals in s. 7(6), the drafting of the clause, and the practical considerations for the party that moves and the party that resists. It deals with commercial arbitration agreements; the consumer and employment cases are discussed where they state the general law, and the position of a receiver or trustee in an insolvency, which was the context of Peace River, is noted but not developed. Our articles on arbitrating a shareholder dispute in Ontario, on setting aside an arbitral award in Ontario, on appealing an arbitral award in Ontario and on enforcing an arbitral award in Ontario deal with what happens once the arbitration is under way and after the award.

The policy and the text of section 7

Section 7 is the product of a change of policy. Lauwers J.A. recorded in Haas at ¶ 11 that the mandatory wording of s. 7 replaced the discretion in the former Arbitrations Act, under which the court “may make an order staying the proceeding,” and Moldaver J. in Wellman at ¶ 48 described the courts of the twentieth century as having displayed “overt hostility” to arbitration, treating it as a “second-class method of dispute resolution.” The Attorney General said when the Act was introduced in 1991, as quoted in Wellman at ¶ 50, that one of its guiding principles was that “the parties to a valid arbitration agreement should abide by their agreements,” and that “the law and the courts will ensure that the parties stick to their agreement to arbitrate.” Moldaver J. held at ¶ 54 that the jurisprudence “has consistently reaffirmed that courts must show due respect for arbitration agreements and arbitration more broadly, particularly in the commercial setting,” at ¶ 55 that limited court intervention is a “fundamental principle underlying modern arbitration law,” embedded in ss. 6 and 7, and at ¶ 56 that s. 6 “signals that courts are generally to take a ‘hands off’ approach to matters governed by the Arbitration Act.” Côté J. put the same point in Peace River at ¶ 49, stating that “[t]he modern view expressed in Canadian arbitration legislation is that parties should be held to their contractual agreements to arbitrate,” which “gives effect to the concept of ‘party autonomy’, according to which parties are free to ‘charter a private tribunal’ to resolve their disputes.”

The section has six (6) subsections. Subsection (1) is the mandatory stay quoted above. Subsection (2) provides that “the court may refuse to stay the proceeding in any of the following cases,” and lists five (5); namely, “1. A party entered into the arbitration agreement while under a legal incapacity. 2. The arbitration agreement is invalid. 3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law. 4. The motion was brought with undue delay. 5. The matter is a proper one for default or summary judgment.” Subsection (3) provides that “[a]n arbitration of the dispute may be commenced and continued while the motion is before the court,” and subsection (4) that, if the court refuses the stay, “no arbitration of the dispute shall be commenced,” an arbitration already commenced “shall not be continued,” and “anything done in connection with the arbitration before the court made its decision is without effect.” Subsection (5) allows a partial stay where the agreement “deals with only some of the matters in respect of which the proceeding was commenced” and “it is reasonable to separate the matters dealt with in the agreement from the other matters.” Subsection (6) provides that “[t]here is no appeal from the court’s decision.”

Three (3) other provisions complete the scheme. Section 1 defines an “arbitration agreement” as “an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them,” and s. 5(3) provides that the agreement “need not be in writing.” Section 5(4) provides that “[a]n agreement requiring or having the effect of requiring that a matter be adjudicated by arbitration before it may be dealt with by a court has the same effect as an arbitration agreement,” which brings the older Scott v. Avery clause within s. 7; Akbarali J. held in Jencel 407 Yonge Street Inc. v. Bright Immigration Inc., 2021 ONSC 6030 (“Jencel”) at ¶ 15, that the arbitration provisions of a commercial lease had that effect. Section 17(1) provides that “[a]n arbitral tribunal may rule on its own jurisdiction to conduct the arbitration and may in that connection rule on objections with respect to the existence or validity of the arbitration agreement,” and s. 17(2) that an arbitration agreement which forms part of another agreement “shall, for the purposes of a ruling on jurisdiction, be treated as an independent agreement that may survive even if the main agreement is found to be invalid.” Lauwers J.A. observed in Haas at ¶ 12 that the policy of s. 7 “is reinforced by s. 17.”

The two-part framework

Peace River arose under the British Columbia statute, whose stay provision uses the Model Law wording, but Côté J. wrote the framework for “the stay provisions in provincial arbitration legislation across the country,” and at ¶ 87 cited s. 7(2) of the Ontario Act as the source of the exceptions in this province. She held at ¶ 76 that those provisions have “two general components”; namely, “(a) the technical prerequisites for a mandatory stay of court proceedings; and (b) the statutory exceptions to a mandatory stay of court proceedings,” and at ¶ 77 that the two (2) components “remain analytically distinct because the burden of proof shifts.” The moving party must establish the technical prerequisites; then, at ¶ 79, “the party seeking to avoid arbitration must show that one of the statutory exceptions applies, such that a stay should be refused,” and “[o]therwise, the court must grant a stay and cede jurisdiction to the arbitral tribunal.”

The four (4) technical prerequisites are listed at ¶ 83, as follows. “(a) an arbitration agreement exists; (b) court proceedings have been commenced by a ‘party’ to the arbitration agreement; (c) the court proceedings are in respect of a matter that the parties agreed to submit to arbitration; and (d) the party applying for a stay in favour of arbitration does so before taking any ‘step’ in the court proceedings.” The standard of proof at this stage is lower than the civil standard. Côté J. held at ¶ 84 that “the applicant must only establish an ‘arguable case’ that the technical prerequisites are met,” and at ¶ 85 that the “arguable case” test and the “prima facie” test of Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”), are the same in substance. Penny J. explained what the standard means in Crosslinx Transit Solutions General Partnership v. Ontario Infrastructure and Lands Corp., 2023 ONSC 3500 (“Crosslinx”) at ¶ 25, stating that “the moving party is not required to prove on a balance of probabilities that the dispute falls within the terms of the arbitration agreement,” that an arguable case “is clearly something less than the standard of ‘correctness’ or even ‘likely to succeed’,” and that it “is more like ‘a reasonable prospect of success’ or ‘not obviously doomed to fail’.”

The second stage reverses the onus and raises the standard. Côté J. held at ¶ 88 that “the key question is whether, even though the technical requirements for a stay are met, the party seeking to avoid arbitration has shown on a balance of probabilities that one or more of the statutory exceptions apply,” that “[i]f not, the court must grant a stay,” and that “[t]he mandatory nature of stay provisions across jurisdictions in Canada reflects the presumptive validity of arbitration clauses and the principle of party autonomy.” At ¶ 89 she held that “a court should dismiss a stay application on the basis of a statutory exception only in a ‘clear’ case,” and that “[w]here the invalidity or unenforceability of the arbitration agreement is not clear (but merely arguable), the matter should be resolved by the arbitrator,” citing the Court of Appeal’s decision in Dalimpex Ltd. v. Janicki, 2003 CanLII 34234 (ON CA) (“Dalimpex”). The Court of Appeal restated the two (2) steps in Goberdhan at ¶¶ 14-15 and in Husky Food at ¶¶ 24-30, Brown J.A. holding in the latter at ¶ 23 that “[t]he 2016 Haas framework has been superseded by the framework adopted by the Supreme Court in 2022 in Peace River.” The five (5) Haas questions, which asked whether an arbitration agreement exists, what the subject matter of the dispute is, what the scope of the agreement is, whether the dispute arguably falls within it, and whether the court should refuse a stay, still describe the ground the motion covers, and Papageorgiou J. applied the Peace River version of them in Halton Healthcare Services Corp. v. Plenary Health Milton LP, 2025 ONSC 2223 (“Halton Healthcare”) at ¶¶ 9-12.

The arbitration agreement and the parties to it

The first prerequisite is an arbitration agreement, and the first question on many motions is whether one exists. The standard is the arguable case. In Husky Food, the parties had negotiated a distribution agreement that was never signed; the respondent’s draft of April 19, 2020, added standard terms containing an arbitration clause, the appellant’s email of May 15, 2020, said the revised version “has been signed off,” and the appellant then sued in Ontario and pleaded that the parties had “reached agreement on all the material terms as of May 15, 2020.” Brown J.A. held at ¶¶ 28-30 that the arguable case standard applies to the existence of the agreement as it does to the other prerequisites, and at ¶¶ 34-35 that it was arguable on the record that an arbitration agreement existed and that “this is not a case where the parties’ intention regarding the existence of an arbitration agreement can be determined from a superficial review of the record,” so that the question belonged to the arbitrator and the stay was upheld.

Two (2) decisions of the same year show the clear case on the other side. In Ismail, the stay motion was founded on a share purchase agreement with a company that was never incorporated; Feldman J.A. held at ¶ 3 that “[b]ecause there was no contract, there was no arbitration agreement, and no basis to stay the action,” and at ¶ 46 that the separability principle in s. 17(2) cannot make an arbitration clause survive where no contract was ever made from which it could survive. In Goberdhan, a field agent’s second and third contracts, which added the arbitration clause, were held invalid for want of fresh consideration; the Court of Appeal held at ¶ 16 that “this was a clear case where the motion judge was able to determine the question at issue – whether there was fresh consideration to support the contracts containing arbitration clauses – on the evidence before him,” and that the point “was not a proposition that was ‘merely arguable’,” the respondent’s uncontradicted evidence being that he received nothing beyond continued employment and “had no practical choice but to sign the new contracts” (¶¶ 21-23). Feldman J.A. had drawn the same line in MDG Kingston Inc. v. MDG Computers Canada Inc., 2008 ONCA 656 (“MDG Kingston”) at ¶ 24, holding that where the dispute is whether the agreement was breached and terminated, and whether the termination ended the arbitration clause, “the court is not to determine the merits of that issue on a stay motion,” but that “in cases where the agreement was void ab initio because it was illegal, or where no agreement was ever reached, the arbitration clause will not apply because it was never validly agreed to.”

An agreement that leaves arbitration to later consent is not an arbitration agreement. In Halton Healthcare, the hospital’s project agreement provided that disputes “may” be referred to arbitration “[u]pon the mutual written consent of the parties”; the respondents delivered a notice of arbitration, the parties could not agree on an arbitrator, and the hospital applied to the court. Papageorgiou J. held at ¶¶ 14-17 that the respondents had no arguable case of an agreement to arbitrate, since consent had never been given, and that delivering a notice of arbitration did not change that.

The second prerequisite is that the proceeding was commenced by a “party” to the agreement, and the word reaches beyond the signatories. Côté J. held in Peace River at ¶ 105 that a non-signatory may be bound as a party by operation of law, including “subsidiaries, assignees, trustees and others claiming through or under the named party,” and at ¶ 106 that an assignee enforcing assigned rights can do so only subject to the terms, including the obligation to arbitrate, citing an Ontario decision, ABN Amro Bank Canada v. Krupp Mak Maschinenbau GmbH (1996), 135 D.L.R. (4th) 130 (Ont. Gen. Div.). The Court of Appeal in Dalimpex at ¶¶ 4 and 45 extended the stay of the action against the contracting party to two (2) other defendants who were its privies in interest, since the claims against them stood or fell with the claim against it. A court-appointed receiver may be a party by claiming through or under the debtor (Peace River at ¶ 118), which is how the receiver in that case came to be bound by the agreements it then succeeded in having declared inoperative.

The scope of the clause and the characterization of the claims

The third prerequisite is that the proceeding is “in respect of a matter” that the parties agreed to submit to arbitration, and the plaintiff’s first tactic is often to plead around the clause. Haas is the Court of Appeal’s answer. The investor in a Toronto restaurant sued the other shareholders for fraudulent misrepresentation inducing the shareholders’ agreement, and the motion judge refused a stay on the footing that a fraud claim lay outside the clause. Lauwers J.A. held at ¶ 29 that the clause, which covered “any dispute, difference or question … respecting this Agreement or anything herein contained,” was broad, and that clauses covering disputes “relating to” an agreement “have been generously interpreted to enjoy ‘a wide compass’”; at ¶ 32, adopting the test from Kaverit Steel and Crane Ltd. v. Kone Corp. (1992), 87 D.L.R. (4th) 129 (Alta. C.A.) as applied in Dalimpex at ¶¶ 41-43, that a dispute falls within a clause covering matters “arising out of or in connection with” the agreement where a party relies on a contractual obligation as a necessary element to create or defeat the claim, or the matter is referable to the interpretation or implementation of a provision of the agreement; at ¶ 35 that he “would be reluctant to agree that the presence of tort claims nullifies an arbitration agreement,” since Laskin J.A. had cautioned the court in Piko v. Hudson’s Bay Company (1998), 41 O.R. (3d) 729 (C.A.) at ¶ 9, “to be wary of cases in which a party to an arbitration agreement seeks to avoid it by pleading a common law tort”; and at ¶ 39 that “in cases involving arbitration agreements, fraud does not necessarily vitiate everything. It is a matter of interpretation. … There is no exclusion for tort claims, misrepresentation or fraud.” He identified at ¶ 31 the motion judge’s errors; namely, assuming that tort claims fall outside arbitration agreements, assuming that a fraud claim vitiates an arbitration agreement, failing to advert to the policy of enforcing arbitration agreements and of letting arbitrators decide their own authority, and equating forum selection clauses with arbitration agreements. At ¶ 36 he quoted Ash v. Corp. of Lloyd’s (1992), 9 O.R. (3d) 755 (C.A.) at ¶ 9, for the proposition that “an allegation that a contract is void ab initio does not make it so until a final judgment of the court,” and added that “[t]he court should lean against a result that undermines arbitration agreements.”

The characterization is done in pith and substance. Lauwers J.A. accepted at ¶ 21 that the “pith and substance” approach to characterizing the claims is an acceptable approach to construing the agreement, and held at ¶¶ 26-27 that the misrepresentations pleaded “largely related to failures to perform obligations under the shareholders’ agreement,” so that the motion judge “went too far” in treating the claims as only fraudulent misrepresentation. He noted at ¶ 23 that a plaintiff may amend the claim to try to avoid the arbitration agreement, “[b]ut this does not assist Mr. Haas in resolving the substantive issue.” Perell and Morden’s treatise, The Law of Civil Procedure in Ontario, 5th ed. (LexisNexis), states at ¶ 6.176 that where the scope of the clause bears more than one interpretation, “the court should select the interpretation that provides for arbitration,” and at ¶ 6.181 that oppression claims may fall outside an agreement to arbitrate, but that “the fact that part of the dispute among the parties involves oppressive conduct does not preclude resort to arbitration where the dispute is captured by an arbitration agreement made by the parties.” The arbitration of shareholder and oppression claims is the subject of our article on arbitrating a shareholder dispute in Ontario.

Where the scope is in doubt, the arbitrator decides it. The Court of Appeal held in Dalimpex at ¶ 21, adopting Gulf Canada Resources Ltd. v. Arochem International Ltd. (1992), 43 C.P.R. (3d) 390 (B.C.C.A.), that “it is not for the court on an application for a stay of proceedings to reach any final determination as to the scope of the arbitration agreement or whether a particular party to the legal proceedings is a party to the arbitration agreement, because those are matters within the jurisdiction of the arbitral tribunal,” that the court reaches a final determination “[o]nly where it is clear that the dispute is outside the terms of the arbitration agreement, or that a party is not a party to the arbitration agreement, or that the application is out of time,” and that “[w]here it is arguable that the dispute falls within the terms of the arbitration agreement or where it is arguable that a party to the legal proceedings is a party to the arbitration agreement then, in my view, the stay should be granted.” Penny J. applied the rule in Crosslinx, where the contractor said the arbitration clause in minutes of settlement did not reach its application about the operator of the Eglinton Crosstown line, holding at ¶ 28 that “it is not the job of the court on this motion to decide who is ‘correct’ in this disagreement,” at ¶ 30 that the Crown entities had “raised an arguable case that this dispute falls under the arbitration clause in the Minutes,” and at ¶ 31 that the risk of additional delay and cost if the arbitrator later finds the dispute outside the clause “is, however, except in the most obvious of cases, a necessary consequence of the competence competence approach endorsed by the Supreme Court.” The application was stayed with costs of $60,000 (¶¶ 39, 41).

Competence-competence and when the court decides

The competence-competence principle is the reason the standard at the first stage is an arguable case and the exceptions at the second stage must be clear. Côté J. described it in Peace River at ¶ 39 as “a principle that gives precedence to the arbitration process,” under which “arbitrators should be allowed to exercise their power to rule first on their own jurisdiction,” and held at ¶ 41 that “it is well established in Canada that a challenge to an arbitrator’s jurisdiction should generally be decided at first instance by the arbitrator.” In Ontario the principle is codified in s. 17(1), and s. 17(8) provides that, where the tribunal rules on a jurisdictional objection as a preliminary question, a party may within thirty (30) days apply to the court to decide the matter, from which decision s. 17(9) allows no appeal.

The principle “is not absolute,” as Côté J. said at ¶ 42, and the two (2) exceptions are from Dell and Uber. The majority in Uber set out the Dell framework at ¶¶ 31-32, with the citations omitted, as follows. “Where pure questions of law are in dispute, the court is free to resolve the issue of jurisdiction. Where questions of fact alone are in dispute, the court must ‘normally’ refer the case to arbitration. Where questions of mixed fact and law are in dispute, the court must refer the case to arbitration unless the relevant factual questions require ‘only superficial consideration of the documentary evidence in the record’.” The essential question, at ¶ 36, “is whether the necessary legal conclusions can be drawn from facts that are either evident on the face of the record or undisputed by the parties.” The Court of Appeal applied that test in Irwin, where a managing director with a base salary of $350,000 sued for constructive dismissal and said the negotiated arbitration clause, which excluded costs and punitive damages, was unconscionable; the Court held at ¶ 11 that “[t]he rule, then, is that questions of jurisdiction are to be arbitrated,” that a court “has the discretion to decide otherwise, but only where the jurisdictional question is based on a pure question of law, or of mixed fact and law requiring not more than a superficial consideration of evidence,” and at ¶ 12 that “[t]he determination of unconscionability is a ‘probing factual inquiry’” which “would risk turning the motion into a mini-trial,” so that the motion judge was entitled to leave the issue to the arbitrator.

The second exception is for the party who cannot get to the arbitrator at all. The majority in Uber held at ¶¶ 37-38 that Dell assumed that, if the court does not decide an issue, the arbitrator will, and “did not contemplate a scenario wherein the matter would never be resolved if the stay were granted”; at ¶ 39 that arbitration may be “fundamentally too costly or otherwise inaccessible,” where the fees are significant relative to the claim, the plaintiff cannot reasonably reach the physical location, or “a foreign choice of law clause … circumvents mandatory local policy”; at ¶ 44 that the court first asks “whether, assuming the facts pleaded to be true, there is a genuine challenge to arbitral jurisdiction,” and then “whether there is a real prospect that, if the stay is granted, the challenge may never be resolved by the arbitrator”; and at ¶ 46 that “a court should not refer a bona fide challenge to an arbitrator’s jurisdiction to the arbitrator if there is a real prospect that doing so would result in the challenge never being resolved.” The driver in Uber faced up-front fees of about US$14,500 to arbitrate in Amsterdam against earnings of $400 to $600 a week, and the majority held at ¶ 47 that “[t]he fees impose a brick wall between Mr. Heller and the resolution of any of the claims he has levelled against Uber.” The assessment, at ¶ 45, “must not devolve into a mini-trial,” and “[g]enerally, a single affidavit will suffice.”

Binance is the Court of Appeal’s application of both exceptions to a commercial clause. The click-through terms of a cryptocurrency exchange required arbitration; the motion judge found that accounts were opened “in under 30 seconds” with roughly fifty (50) pages of terms, that the exchange could change the arbitration agreement unilaterally and had changed the forum and governing law four (4) times, at one point to “an unspecified location, under unspecified law,” and that the starting cost of about $36,000 plus fees and travel to Hong Kong against an average claim of about $5,000 “could effectively amount to a grant of immunity to Binance.” The Court of Appeal held at ¶ 16 that, before a court can entertain an argument that a clause is void for unconscionability or public policy, “it must first be satisfied that the circumstances fall within an exception to the application of the competence-competence principle,” at ¶¶ 21-24 that both exceptions were engaged, since the standard form terms raised a legal issue on a superficial documentary review of the kind done in Uber, and the cost, distance and choice of law brought the case within the Uber exception, and at ¶ 28 dismissed the appeal with costs of $30,000. Irwin at ¶ 14 shows the other side of the same line; none of the access-to-justice concerns of Uber was present where a professional with counsel had agreed to arbitrate in Ontario under Ontario law, with no suggestion that the costs were disproportionate or that any barrier “would effectively leave the appellant without remedy.”

Two (2) consequences follow. First, the court that leaves a question to the arbitrator decides nothing about it, and the court that decides a question on the motion decides it for the motion only; the Court of Appeal noted in Goberdhan at ¶ 26 that a finding made on a stay motion is not a final determination of the issue in the action. Second, the exceptions do not reward delay. The majority in Uber noted at ¶¶ 42-43 that Dell permits a court to refer to the arbitrator a challenge that is “a delaying tactic,” and that security for costs and costs awards are the safeguards against misuse of the second exception, and the Court of Appeal in Irwin at ¶ 10 read Uber as allowing the court to decide a mixed question only where it “is convinced the challenge is not a delaying tactic or will not prejudice recourse to the arbitration.” The party who loses on jurisdiction before the arbitrator is not without recourse; s. 17(8) allows an application to the court within thirty (30) days of a preliminary ruling, and a ruling made in the award can be challenged under s. 46, as our article on setting aside an arbitral award in Ontario explains.

The step in the proceeding and undue delay

The fourth technical prerequisite is that the moving party asks for the stay “before taking any ‘step’ in the court proceedings,” and the fourth exception in s. 7(2) is that “[t]he motion was brought with undue delay.” The two (2) overlap, and the cases treat them together. Côté J. held in Peace River at ¶ 97 that the question is whether the party should be held impliedly to have affirmed the correctness of the proceedings and its willingness to go along with a court determination instead of arbitration, and that a step is “something in the nature of an application to the Court, and not mere talk between solicitors … nor the writing of letters,” and at ¶ 98 that requesting an extension of time to file a defence is not a step.

Halton Healthcare is the recent Ontario illustration of a party that took steps. The respondents to the hospital’s application accepted service, delivered a notice of appearance, attended Civil Practice Court, consented to a timetable and complied with it, delivered affidavits on the merits “prepared in response to the Application,” and conducted cross-examinations, and then served their stay motion a year later with their responding record. Papageorgiou J. held at ¶¶ 19-22 that those were substantive steps, at ¶ 26 that by conducting cross-examinations the respondents “sought to take the benefit of this litigation and should not be able to then opt for arbitration after having done so,” at ¶¶ 27-28 that filing a responding record on the merits “in case” summary judgment was argued was no excuse, since the respondents “did not need to engage with the merits in order to bring the stay motion at first instance,” and at ¶¶ 30-31 that she was “satisfied on a balance of probabilities that the Respondents did move with undue delay and that they did not bring their motion for a stay at the earliest opportunity.” She adopted at ¶ 29 Penny J.’s statement in Crosslinx at ¶ 32 that “undue delay has occurred where the respondent has failed to advance its position in favour of arbitration at the ‘earliest opportunity’ and has participated in a litigation process which it subsequently seeks to stay,” with considerations akin to waiver, attornment and estoppel. Penny J. had found no undue delay in Crosslinx itself, holding at ¶ 35 that participation in the thirty-day independent certifier step under the project agreement was not litigation; “[t]here was no ‘litigation horse’ being ridden until the Applicants commenced this application. HMKE never ‘rode’ that horse.”

A party that never moves gets no stay. In Paulpillai Estate v. Yusuf, 2020 ONCA 655 (“Paulpillai”), the partnership agreement provided for arbitration, the responding parties said in their affidavits that the matter should have gone to arbitration, and they filed numerous affidavits, called viva voce evidence, conducted cross-examinations and brought an oral motion to remove counsel, but never moved under s. 7. Jamal J.A. recorded at ¶ 43 the motion judge’s finding that s. 7(1) “makes it clear that the action can only be stayed by way of motion, and even then, the court has the discretion to refuse to grant the stay if the motion is not made in a timely manner,” and at ¶ 46 that, since the responding parties “had failed to bring a motion as required by s. 7,” it was not open to her to grant a stay. The contrast is Goberdhan, where the defendant filed a notice of intent to defend and then moved at once under Rule 21.01(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), and s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”), for a stay under s. 7(1) (¶ 3), and Jencel, where the tenant served but did not file a notice of intent to defend and then moved (¶ 12); in neither case was the step held against the moving party. Perell and Morden state at ¶ 6.173 that a party “may waive the right to have an action stayed and the matter referred to arbitration if it takes steps in the action.”

The five exceptions in section 7(2)

Section 7(2) is the second stage of the framework, and the onus and the standard are the resisting party’s. Feldman J.A. described the five (5) exceptions in MDG Kingston at ¶ 36 as “all cases where it would be either unfair or impractical to refer the matter to arbitration; unfair because there was no legal agreement to arbitrate or because a party effectively waived the agreement by undue delay in objecting to the court action, or impractical because a party was not disputing the claim or it was a claim that was clear and could be resolved by summary judgment without a referral to arbitration,” and at ¶ 37 as “a limited exception to the mandatory requirement that courts enforce arbitration clauses and not take jurisdiction where the parties have legitimately agreed to arbitrate their disputes.” Moldaver J. adopted the description in Wellman at ¶ 65, and the Court of Appeal in Goberdhan at ¶ 15 repeated that a stay should be refused on an exception only in a “clear case.” Professor Tamar Meshel’s treatise, Arbitration Law: Statutes, Cases and Commentary (LexisNexis), at § 3.09[5][a], collects the first-instance decisions to the effect that the onus is on the party opposing arbitration to show a clear case on a balance of probabilities, that the exceptions “should be narrowly construed,” that some of them, undue delay and summary judgment among them, “are outside the operation of the competence-competence principle” and “are exclusively for the court to decide,” and that, even where an exception is made out, “the court retains the discretion to grant a stay.” The word in s. 7(2) is “may.”

The first exception, legal incapacity, is rare. The second, that “[t]he arbitration agreement is invalid,” is where most of the argument happens, and the cases above settle its limits. An agreement that was never reached, as in Ismail, or that fails for want of consideration, as in Goberdhan, is invalid, and the court may say so where the point is clear. An agreement attacked as unconscionable is invalid if the attack succeeds, which is why Moldaver J. said in Wellman at ¶ 85 that unfairness in standard form arbitration clauses is “better dealt with directly through the doctrine of unconscionability,” but the attack is for the arbitrator unless a Dell or Uber exception applies, as Irwin and Binance show from either side. An agreement whose appointment mechanism was drafted for two (2) parties is not invalid because a third has been added; Lauwers J.A. held in Haas at ¶¶ 46-49 that the mechanism worked, with the court appointing a third arbitrator if needed. A statutory rescission of the main contract does not make the arbitration clause invalid; Feldman J.A. held in MDG Kingston at ¶ 25 that nothing suggested fraud or that the agreement was void ab initio, and at ¶ 33 that “[t]he two issues of whether, on the merits, the franchisee was entitled to rescind the agreement, and the jurisdiction of the arbitrator, were for the arbitrator to determine.”

The third exception, that the subject-matter “is not capable of being the subject of arbitration under Ontario law,” is about the kind of dispute. Consumer claims are the clearest example, since the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A, shields consumers from arbitration clauses, which is why the consumer claims in Wellman proceeded in court while the business customers’ claims were stayed (¶¶ 96-102). The oppression remedy is the example that arises in commercial disputes. In Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard Condominium Corporation No. 1636, 2020 ONCA 612 (“TSCC 1628”), the motion judge had found that some of the claims between two (2) condominium corporations were arbitrable and that the oppression remedies under s. 135 of the Condominium Act, 1998, S.O. 1998, c. 19, might not be available in arbitration (¶¶ 18-20), which raised the partial-stay question discussed below. The insolvency cases are the third example; the Supreme Court held in Peace River at ¶ 8 that insolvency alone is not enough, and that the party seeking to avoid arbitration must establish on a balance of probabilities that a stay would compromise the integrity of the insolvency proceedings.

The fourth exception, undue delay, is discussed above. The fifth, that “[t]he matter is a proper one for default or summary judgment,” is the one a plaintiff with a liquidated claim reaches for, and MDG Kingston confines it. The motion judge there had refused the stay, granted partial summary judgment on the franchisee’s rescission claim and directed a trial of damages; Feldman J.A. held at ¶ 37 that the exception arises “where the case is properly one for summary judgment, i.e., there are no genuine issues for trial, and therefore, as with a default situation, there are no issues that require the assistance of an arbitrator,” at ¶ 38 that by ordering partial summary judgment on liability and a trial on damages “the motion judge failed to give effect to the purpose of the exception for summary judgment in s. 7(2)5, which is to avoid referral to arbitration where further adjudication is unnecessary,” and at ¶ 39 that the matter did not fall within the exception “because the whole matter was not a proper matter for summary judgment.” Akbarali J. applied the exception in Jencel, a landlord’s action for arrears of rent, holding at ¶¶ 18-19 that, after Hryniak v. Mauldin, 2014 SCC 7, “the question is not whether the responding party to the summary judgment motion has no basis to dispute the claim, but rather whether the responding party has raised genuine issues requiring a trial,” and at ¶¶ 33-34 that “[t]he case is a proper one for summary judgment. Arbitration would be an impractical alternative in these circumstances,” with the observation at ¶ 35 that the lease’s requirement of three (3) arbitrators was “an unnecessary and disproportionate expense for the parties in the context of this dispute.” In Ismail at ¶¶ 21-22, by contrast, the Court of Appeal refused to adjourn the motion so that a defence could be delivered and the summary judgment exception assessed, since the facts “were far from clear and did not suggest that summary judgment would be available.”

Partial stays under section 7(5)

Section 7(5) is the provision for the proceeding that mixes arbitrable and non-arbitrable matters, and Wellman decided what it does and does not allow. The Court of Appeal had held in Griffin v. Dell Canada Inc., 2010 ONCA 29 (“Griffin”), that s. 7(5) gave the court a discretion to refuse to stay even the arbitrable claims where it was not reasonable to separate them, and the motion judge in Wellman had used that discretion to let the business customers’ claims proceed in court alongside the consumer claims. Moldaver J. held at ¶ 8 that “s. 7(5) of the Arbitration Act does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement,” at ¶¶ 66-70 that the subsection has two (2) preconditions, that the agreement deals with only some of the matters and that it is reasonable to separate them, and then a discretion to let the other matters continue in court, “though it must nonetheless stay the court proceeding in respect of the matters that are dealt with in the agreement,” and that where the preconditions are not met, “unless one of the five exceptions listed in s. 7(2) applies, the general rule under s. 7(1) would apply, meaning that the proceeding must be stayed.” The multiplicity of proceedings that results is the legislature’s choice; s. 138 of the CJA directs the court to avoid a multiplicity only “as far as possible” (¶ 90), and access to justice “cannot, absent express direction from the legislature, be permitted to overwhelm the other important objectives pursued by the Arbitration Act, including ensuring that parties to a valid arbitration agreement abide by their agreement” (¶ 83). Moldaver J. gave at ¶ 101 the example of a proceeding that combines an overbilling claim within the clause and a collection claim outside it.

The five-judge panel in TSCC 1628 at ¶¶ 5-7 confirmed that Wellman overturned Griffin on s. 7(5), and held that a motion judge who, applying Griffin, refused to stay any part of the proceeding “granted relief that was unavailable under s. 7(5) or elsewhere in s. 7,” so that his decision was not one made under s. 7 at all. Two (2) further points come from Haas. Lauwers J.A. held at ¶ 44 that “[u]ntil the arbitrator decides his or her jurisdiction, a motion under s. 7(5) is premature,” and at ¶¶ 50-58 that the prospect of a multiplicity of proceedings, there because a co-defendant had not appealed, was not dispositive, since “the court should not lightly depart from the strong policy support for enforcing arbitration agreements.” Where the non-arbitrable claims are against privies of the contracting party, Dalimpex at ¶ 45 shows that the stay follows them too.

International arbitration agreements

Where the arbitration agreement is international and commercial, the stay comes from the ICAA, whose s. 9 provides that, “[w]here, pursuant to article II (3) of the Convention or article 8 of the Model Law, a court refers the parties to arbitration, the proceedings of the court are stayed with respect to the matters to which the arbitration relates.” Article 8(1) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), which is Schedule 2 to the ICAA, provides that “[a] court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed,” and art. 8(2) that arbitral proceedings “may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.” Article II(3) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”), Schedule 1 to the ICAA, is to the same effect. The two (2) statutes are mutually exclusive under s. 2(1) of the Act, and the majority in Uber held at ¶¶ 19-28 that the ICAA applies only to agreements that are both “international” and “commercial,” that “a court must determine whether the ICAA applies by examining the nature of the parties’ dispute, not by making findings about their relationship,” and that an employment dispute is not commercial, so that the Act governed the driver’s claim.

The framework is the same. Brown J.A. held in Husky Food at ¶ 26 that, “[w]hile the Peace River framework was crafted in the context of domestic arbitration legislation, in my view it applies equally to stays sought under s. 9 of the ICAA in respect of international commercial arbitration agreements,” and Binance was decided under s. 9 as well. The exceptions are different in form and narrower in substance. Côté J. held in Peace River at ¶ 124 that “the sole basis upon which a party may sue to enforce a contract and yet avoid the obligation to arbitrate is that the arbitration agreement has been found by a court to be void, inoperative, or incapable of being performed,” and at ¶ 134 that a narrow interpretation of those words “promotes the enforcement of arbitration agreements.” She defined them at ¶¶ 136-145. “Void” is confined to the rare case where the agreement is “intrinsically defective” under the ordinary rules of contract law, including fraud, undue influence, unconscionability, duress, mistake or misrepresentation. “Inoperative” describes agreements which “have ceased for some reason to have future effect” or “have become inapplicable to the parties and their dispute,” through frustration, discharge by breach, waiver or a later agreement, and “matters such as inconvenience, multiple parties, intertwining of issues with non-arbitrable disputes, possible increased cost, and potential delay generally will not, standing alone, be grounds to find an arbitration agreement inoperative.” “Incapable of being performed” describes the case in which “the arbitral process cannot effectively be set in motion” because of a physical or legal impediment beyond the parties’ control, including irremediable inconsistency or vagueness in the agreement, the unavailability of the named arbitrator, the dissolution of the chosen institution, or political circumstances at the seat. The last of those was the issue in Dalimpex, where the motion judge had found the clause incapable of being performed because the named Polish tribunal no longer existed; the Divisional Court and the Court of Appeal held at ¶¶ 26-27 that the question is whether the language, reasonably interpreted, is capable of being construed as encompassing the successor tribunal, and at ¶ 22 that, where it is not clear that the agreement is null and void, inoperative or incapable of being performed, “it may be preferable to leave any issue related to the ‘existence or validity of the arbitration agreement’ for the arbitral tribunal to determine in the first instance under article 16.”

The timing rule is written into art. 8(1) itself; the request must be made “not later than when submitting his first statement on the substance of the dispute,” which in practice means before the statement of defence or the responding record is delivered. The appeal route differs too. The ICAA has no equivalent of s. 7(6), so the orders in Husky Food and Binance were appealed as of right, and Brown J.A. held in Husky Food at ¶¶ 16-17 that an order granting or refusing a stay under s. 9 is final for the purpose of the route of appeal, “as it finally determines the forum in which the dispute between the parties is to be resolved.”

The bar on appeals in section 7(6)

Section 7(6) provides that “[t]here is no appeal from the court’s decision,” and Moldaver J. held in Wellman at ¶ 91 that, “[g]iven the absence of any qualifying language, s. 7(6) must be taken as referring to a ‘decision’ made under any subsection contained in s. 7,” including “a decision to stay the proceeding under s. 7(1), a decision to refuse a stay under s. 7(2), or a decision to order a partial stay under s. 7(5).” The Court of Appeal applied the bar in Irwin at ¶¶ 15-16, quashing the appeal from the stay with costs of $10,000, and in Paulpillai at ¶ 47, holding that it “applies to any decision under s. 7, including a decision to refuse a stay under s. 7(2).”

The bar has one (1) opening, and it is the one that explains why Goberdhan and Ismail reached the Court of Appeal. Under the line of authority that begins with Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.) (“Huras”), a decision that no arbitration agreement applies to the dispute is not a decision under the Act at all, so the Act’s bar does not reach it. Jamal J.A., for a five-judge panel in TSCC 1628, held at ¶ 4 that Huras “held that if a motion judge decides that an arbitration agreement does not apply to the dispute before the court, then the Arbitration Act also does not apply, including the bar on appeals in s. 7(6),” that Huras “has been followed by this court in seven unanimous decisions, including by two five-judge panels,” and at ¶ 6 that, “although Wellman overturned Griffin on the interpretation of s. 7(5), it did not disturb the Huras line of cases on the interpretation of s. 7(6). In my view, the Huras line of cases was correctly decided.” Feldman J.A. applied the rule in Ismail at ¶¶ 23-25, holding that “where the decision to refuse a stay is based on a finding that there is no arbitration agreement, then the decision to refuse a stay is not made under the Act, and therefore an appeal is not barred by s. 7(6),” and the Court of Appeal applied it in Goberdhan at ¶¶ 6-10 to hear the appeal from the finding that the contracts containing the clauses were invalid for want of consideration. Perell and Morden summarize the line at ¶¶ 6.185-6.187; no appeal lies where the court holds that the clause applies or that the arbitrator should decide whether it applies, and an appeal lies where the court holds that the dispute is not subject to arbitration. The order that is appealable is a final order, as Brown J.A. noted in Husky Food at ¶ 16, since it “finally determines the forum in which the dispute between the parties is to be resolved.”

The arbitration clause

The stay motion is won or lost on the words of the clause as often as on the conduct of the parties, and six (6) drafting points follow from the cases.

First, the clause should be mandatory. The consent-based clause in Halton Healthcare, under which disputes “may” be referred to arbitration “[u]pon the mutual written consent of the parties,” produced no arbitration agreement at all, and the hospital’s application proceeded in court. A clause that says disputes “shall be finally resolved by arbitration” engages s. 7(1); a clause that contemplates a later agreement does not.

Second, the scope should be wide and should say so. The words “arising out of or in connection with this Agreement” bring in the tort and fraud claims that a plaintiff pleads to avoid the clause, under the Kaverit test adopted in Dalimpex and Haas, and a clause that covers only “disputes concerning the interpretation of this Agreement” invites the argument that a claim in deceit or for oppression falls outside it. Where the parties want injunctive relief available from the court, the clause should say so in terms, as the partnership agreement in Paulpillai did (¶ 42); where they want the arbitrator to have the oppression remedy, the clause should confer the remedial powers in terms, for the reasons given in our article on arbitrating a shareholder dispute in Ontario.

Third, the mechanism should work for the parties who will use it. The two-party appointment mechanism in Haas survived the addition of a third party only because the court could appoint the third arbitrator (¶¶ 46-49); the lease in Jencel required three (3) arbitrators for a rent dispute, which Akbarali J. called “an unnecessary and disproportionate expense” (¶ 35) on the way to refusing the stay; and the named institution in Dalimpex had ceased to exist. A clause should name an institution and its rules as they may be amended from time to time, provide for a sole arbitrator below a stated amount in dispute, and provide a default appointing authority.

Fourth, the clause should bind everyone who might sue. Guarantors, affiliates and assignees are bound only as parties or as persons claiming through or under a party (Peace River at ¶¶ 105-106), and the privies in Dalimpex were stayed only because their claims stood or fell with the contracting party’s. Where a group of companies or a set of individuals is on one side of the bargain, each of them should sign the clause or a joinder to it.

Fifth, the clause should be supported by consideration and be accessible. The clause added to the second and third contracts in Goberdhan failed because the employee received nothing for it, and the clauses in Uber and Binance failed because the cost, the distance and the choice of law made arbitration a wall rather than a forum. A commercial clause between parties with counsel, providing for arbitration in Ontario under Ontario law, with the costs of the arbitration in the arbitrator’s discretion, is the clause the Court of Appeal upheld in Irwin.

Sixth, the clause should carry the words that decide the later stages, which our other articles explain; namely, “final and binding” to remove the appeal under s. 45, and a provision that the award may be enforced in any court of competent jurisdiction.

Practical considerations

For the defendant who wants the arbitration, the rule is to move first and move at once. A notice of intent to defend may be served, as it was in Goberdhan and Jencel, and an extension of time to defend may be requested, as Peace River at ¶ 98 confirms; a statement of defence, a cross-examination, a consent to a timetable and a responding record on the merits are the steps that cost the respondents in Halton Healthcare their stay. The motion is brought under s. 7(1) with Rule 21.01(3) and s. 106 of the CJA, on an affidavit that exhibits the agreement containing the clause and the pleading, and that says no more about the merits than the arguable case requires. The moving party should ask for a stay of the whole proceeding and, in the alternative, a stay under s. 7(5) of the matters the clause covers, and should remind the court that the scope and validity of the clause are, under s. 17(1) and the competence-competence principle, for the arbitrator unless the case is clear. Section 7(3) allows the arbitration to be commenced while the motion is pending, and a notice of arbitration served with the motion record shows the court that the moving party means to arbitrate.

For the plaintiff who wants to stay in court, the task is to find a clear case, because an arguable one goes to the arbitrator. The strongest positions are those of Ismail and Goberdhan; namely, that no contract was ever made or that the agreement containing the clause fails for want of consideration, on evidence that is undisputed or evident on the face of the record. The next are the exceptions the court decides for itself; namely, undue delay, proved by a record of the defendant’s steps and the dates of them, and summary judgment, proved by showing that the whole matter can be decided without a trial, as in Jencel, and unlike MDG Kingston, where only the liability half could be. An unconscionability argument needs the Dell or Uber gateway before the court will hear it, and Irwin shows that a negotiated commercial clause between advised parties does not pass through it. A plaintiff who pleads fraud or a tort to escape the clause should expect the Haas analysis, and a plaintiff whose claims are partly outside the clause should expect, under Wellman, that the claims inside it will be stayed whatever happens to the rest.

Costs follow the event on these motions and on the appeals that the Huras opening allows. The appellants in Husky Food and Binance each paid $30,000, the appellant in Goberdhan $19,000, the appellant in Irwin $10,000 on the quashed appeal, the appellant in Ismail $6,000, and the respondent in Haas $7,500 on the appeal and $14,000 on the motion; the Crown entities in Crosslinx recovered $60,000 on the stay of an application, and the landlord in Jencel $5,000 on the refusal of one. The larger cost is the one Penny J. identified in Crosslinx at ¶ 31; a party that litigates the scope of the clause in court, loses, and then arbitrates has paid for the question twice.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract, lease, franchise and fraud disputes, and in the court proceedings that surround them, including motions to stay an action or application under s. 7 of the Act and s. 9 of the ICAA, the responses to such motions where the clause does not reach the dispute or the case for an exception is clear, applications under s. 17(8) from a tribunal’s preliminary ruling on jurisdiction, and the appeals that the Huras line permits. We also draft and review the arbitration clauses that decide these motions before they are brought. Our arbitration practice and our commercial litigation practice are described on the pages linked here, our shareholder disputes practice covers the oppression and partnership claims in which the stay motion most often arises, and our appellate practice covers the appeals discussed above. Our articles on arbitrating a shareholder dispute in Ontario, on evidence in a commercial arbitration in Ontario, on setting aside an arbitral award in Ontario, on appealing an arbitral award in Ontario and on enforcing an arbitral award in Ontario take the dispute from the arbitration itself to the award and its enforcement. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Whether a proceeding will be stayed depends on the words of the arbitration agreement, the claims pleaded, the steps taken and the evidence on the motion, and the authorities cited should be read in full before they are relied on.

The post Staying a Court Action in Favour of Arbitration in Ontario appeared first on Grigoras Law.

The court’s role on that application is narrow. For a domestic award, s. 50(3) provides that the court “shall give a judgment enforcing” it unless one of four (4) listed circumstances applies, and the Court of Appeal held in 108 Media Corp. v. BGOI Films Inc., 2019 ONCA 539 (“BGOI”) at ¶ 5, that the subsection “deprives a judge of jurisdiction to refuse to enforce an arbitral award except in certain circumstances.” For an international or foreign award, art. 35 of the Model Law and art. III of the Convention direct recognition and enforcement, and refusal is possible “only” on the grounds listed in art. 36 and art. V, which the courts construe narrowly. The Court of Appeal’s most recent decision on a foreign award, InFrontier AF LP v. Rahmani, 2026 ONCA 289 (“InFrontier”), released on April 21, 2026, upheld the enforcement against an Ontario resident of an award of more than US$2.5 million made in Dubai, and summarized the regime at ¶ 2 on the basis that “[t]he Convention favours enforcement of arbitral awards while respecting the parties’ autonomy to choose their own arbitral procedure.” A recent Ontario decision in which recognition was refused, Tianjin Dinghui Hongjun Equity Investment Partnership v. Du, 2023 ONSC 1808 (“Tianjin Dinghui”), turned on the absence of proper notice of the arbitration to the two (2) Toronto residents against whom an award of about $120 million had been made, and it shows where the limits lie.

This article sets out the law of enforcing a commercial arbitral award in Ontario as it stands in October 2026. It covers the application under s. 50 of the Act and the judgment it produces, the four (4) circumstances in which the court may decline, the position while the thirty (30) days for an appeal or a set-aside application are running or a challenge is pending, stays of execution after judgment, the ten-year limit, awards made elsewhere in Canada, the recognition and enforcement of international and foreign awards under the ICAA, collection after judgment, the drafting of the clause, and the practical considerations for the creditor and the debtor. It does not deal with family arbitration awards, which s. 50.1 of the Act makes enforceable only under the Family Law Act, R.S.O. 1990, c. F.3, or with labour arbitration awards. Our articles on setting aside an arbitral award in Ontario and on appealing an arbitral award in Ontario deal with the losing party’s two (2) routes of challenge, and this article deals with what happens when neither is taken, or when both have failed.

The award and the judgment

Section 50(8) of the Act provides that “[t]he court has the same powers with respect to the enforcement of awards as with respect to the enforcement of its own judgments.” Glustein J. explained the subsection’s work in Zenith Aluminum Systems Ltd. v. 2335945 Ontario Inc., 2021 ONSC 1128 (“Zenith”) at ¶ 33, stating that “[i]t is s. 50(8) which treats final arbitral awards in the same manner as final judgments.” Once the court gives judgment under s. 50(3), the creditor holds an order of the Superior Court of Justice for the payment of money, and Rule 60.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), makes the ordinary methods of enforcement available; namely, a writ of seizure and sale, garnishment, a writ of sequestration and the appointment of a receiver. The judgment also carries the court’s postjudgment interest. Section 129(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”), provides that “[m]oney owing under an order, including costs to be assessed or costs fixed by the court, bears interest at the postjudgment interest rate, calculated from the date of the order.”

Interest before judgment is the arbitrator’s to award. Section 57 of the Act provides that “[s]ections 127 to 130 (prejudgment and postjudgment interest) of the Courts of Justice Act apply to an arbitration, with necessary modifications,” and Myers J. noted in Abittan v. Wilcox, 2020 ONSC 6836 (“Abittan”) at ¶ 22, that “[s]ection 57 of the statute authorizes awards to include prejudgment and postjudgment interest on the same basis as court orders.” An award that is silent on interest leaves the creditor to argue on the enforcement application that the court should add it, and the safer course is to ask the tribunal for interest in the arbitration itself, in the same way that a party who finds the award silent on costs may, under s. 54(3), request a further award dealing with costs within thirty (30) days of receiving the award. The firm’s prejudgment and postjudgment interest calculator computes interest under ss. 128 and 129 at the Ministry’s quarterly rates.

The costs of the arbitration are part of the award, and they are enforced with it. Section 54(1) provides that “[a]n arbitral tribunal may award the costs of an arbitration,” and s. 54(2) defines those costs as “the parties’ legal expenses, the fees and expenses of the arbitral tribunal and any other expenses related to the arbitration.” In Abittan, the money award the applicant sought to enforce was a costs award of about $46,000, and the respondent’s argument that a costs award was a remedy the court should not enforce under s. 50(7) failed, Myers J. holding at ¶ 21 that “a costs award is indeed a remedy which a court has jurisdiction to grant and would grant in a proceeding similar to this one.” The costs of the enforcement application are a separate matter, which the court awards in the ordinary way. The creditor in Zenith recovered $13,000 for its application at ¶¶ 84-85; the creditors in Kapahi Real Estate Inc. v. Elite Real Estate Club of Toronto Inc., 2026 ONSC 132 (“Kapahi”), had been awarded $27,000 for theirs, as Myers J. recorded at ¶ 26; and the Court of Appeal in BGOI at ¶ 7 fixed the costs of the quashed appeals on a higher scale, at $14,000, on the basis that “it is evident that 108 Media Corporation’s litigation strategy has been to delay the inevitable, knowing that they had no arguable grounds of appeal.”

The application under section 50

Section 50(1) provides that “[a] person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect,” and s. 50(2) provides that “[t]he application shall be made on notice to the person against whom enforcement is sought, in accordance with the rules of court, and shall be supported by the original award or a certified copy.” The proceeding is an application, since Rule 14.05(2) allows a proceeding to be commenced by application to the Superior Court of Justice “if a statute so authorizes,” and the “court” under the Act is that court. In Toronto, the application may be brought on the Commercial List, where Kapahi, Tianjin Dinghui and other applications discussed in this article were heard.

The record is short. The applicant files the award, or a certified copy of it, and ordinarily the arbitration agreement, with an affidavit that proves when the award was received, that no appeal or application to set aside was commenced within the thirty (30) days or that any such proceeding has been finally disposed of, what remains unpaid, and how the interest claimed has been computed. The respondent’s record is shorter still, since the only matters open to it are the four (4) circumstances in s. 50(3), and an application that raises nothing else is a short one.

The word in s. 50(3) is “shall.” The subsection provides that “[t]he court shall give a judgment enforcing an award made in Ontario unless” one of the four (4) circumstances exists, and the courts have read it as it is written. In BGOI, the Court of Appeal quashed an appeal from an enforcement judgment at ¶ 5 on the basis that s. 50(3) “deprives a judge of jurisdiction to refuse to enforce an arbitral award except in certain circumstances, none of which apply here,” and that, the appeal from the refusal of leave to appeal the award having been quashed, “the arbitral award must be enforced.” Myers J. in Abittan at ¶ 3 stated that, “as long as certain procedural conditions are fulfilled, like their being no appeal brought and the time for doing so has expired, the court is required to enforce arbitration awards.” B. Davies J. in Toronto Standard Condominium Corp. No. 1466 v. Weinstein, 2021 ONSC 1306 (“Weinstein”) at ¶ 39, having dismissed the unit owner’s set-aside application as out of time, held that “I am required to grant a judgment enforcing the arbitral award.” Koehnen J. in Jewish Foundation of Greater Toronto v. Joseph Lebovic Charitable Foundation, 2025 ONSC 5068 (“Lebovic”) at ¶¶ 138-139, having dismissed the applications to set aside and to appeal four (4) decisions of the arbitrator, held that the awards “must be recognized and enforced by this Court.” The Divisional Court in Ledsham v. Air Canada Pilots Assn., 2022 ONSC 1877 (“Ledsham”) at ¶ 24, described the scheme of the Act as follows. “The Arbitrator makes the decision. If no appeal or review is taken from that decision, the order ‘binds the parties’ and is then enforceable.” The Superior Court “is required to enforce the order unless the circumstances set out in” s. 50(3) exist, and “[t]he application judge may not inquire into the underlying merits of the Arbitrator’s decision.”

The application is not confined to awards for money. In Abittan, the applicant sought recognition of the arbitrator’s declaration that a letter of intent was binding, together with enforcement of the costs award, and obtained both. In DAC Group (Holdings) Ltd. v. Fuego Digital Media Inc., 2018 ONCA 43 (“DAC Group”), the award declared the ownership of software and granted injunctive relief, with costs of more than $1.5 million. In Canadian Soccer Assn. Inc. v. Assn. de Soccer de Brossard, 2023 ONSC 1367 (“Canada Soccer”), the award directed the governing body to grant a club a national youth club licence, and Bell J. enforced it by interim order because, as he found at ¶ 33, “[e]nforcement of the award is therefore necessary to allow ASB and its players the benefits of the award.” Section 50(7), discussed below, deals with the award whose remedy is one the court would not itself grant.

Where the losing party has commenced an appeal or an application to set aside, the two (2) proceedings are ordinarily heard together, and the enforcement judgment follows the dismissal of the challenge in the same reasons, as it did in Weinstein and in Lebovic. In Zenith, the creditor’s enforcement application and the debtor’s application for a stay of execution were heard together, and in Canada Soccer the losing party’s motion for a stay under s. 50(5)(b) and the winning party’s cross-motion to enforce under s. 50(5)(a) were heard together. The creditor who waits for the challenge to be decided before issuing its own application adds months to the process; the creditor who issues it at once has its judgment on the day the challenge fails.

The four circumstances in section 50(3)

Section 50(3) lists four (4) circumstances, and the list is closed. Paragraph (a) is that “the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed.” Paragraph (b) is that “there is a pending appeal, application to set the award aside or application for a declaration of invalidity.” Paragraph (c) is that “the award has been set aside or the arbitration is the subject of a declaration of invalidity.” Paragraph (d) is that “the award is a family arbitration award.” Section 3 of the Act does not allow the parties to vary or exclude s. 50, so the list cannot be lengthened by agreement any more than it can be lengthened by the court.

The thirty (30) days in paragraph (a) are those of s. 47(1), which provides that “[a]n appeal of an award or an application to set aside an award shall be commenced within thirty days after the appellant or applicant receives the award, correction, explanation, change or statement of reasons on which the appeal or application is based.” The period runs from receipt, and it cannot be extended. The Court of Appeal held in R & G Draper Farms (Keswick) Ltd. v. 1758691 Ontario Inc., 2014 ONCA 278 (“Draper Farms”) at ¶ 19, that “s. 50(3) is inconsistent with the notion of a residual discretion to extend the 30-day time period that governs an application to set aside or vary an arbitral award,” and Davies J. in Weinstein at ¶ 16 read Draper Farms as holding “that this Court has no inherent jurisdiction to extend the 30-day appeal period either.”

Section 47(2) provides that the thirty-day limit “does not apply if the appellant or applicant alleges corruption or fraud,” and a debtor sometimes reaches for that subsection when the thirty (30) days have passed. Weinstein shows how far it goes. Davies J. held at ¶ 22 that “[a]llegations of fraud or corruption are extremely serious” and that “[a]n arbitral award will not be set aside on the grounds of fraud or corruption without clear evidence,” and at ¶ 26 that “[i]t is not sufficient for Mr. Weinstein to simply allege there was corruption or fraud to avoid the 30-day limit,” quoting Calabrese v. Weekes, 2003 CanLII 3311 (ON SC) at ¶ 22, for the proposition that it would be “contrary to the purpose of the legislation to have a party avoid the thirty day period by making a mere allegation of corruption or fraud.” The unit owner’s set-aside application was dismissed and the enforcement judgment followed. His appeal was quashed in Toronto Standard Condominium Corp. No. 1466 v. Weinstein, 2021 ONCA 470, where the Court of Appeal held at ¶ 1 that s. 49 of the Act applied and that he needed leave to appeal, and leave was refused.

Paragraph (b) requires a pending proceeding, and paragraph (c) an award that has been set aside. A debtor’s stated intention to challenge the award is neither, and a debtor whose challenge has been dismissed is in the position of the respondents in Lebovic and Weinstein. Where a challenge is pending, the court is not bound to wait, since s. 50(5), discussed below, allows it to enforce the award in the meantime or to stay enforcement on conditions.

What is not a ground

The grounds that a losing party would like to raise on the enforcement application, and cannot, are the grounds of s. 46 and the merits. The ten (10) grounds for setting aside an award, which are the subject of our article on setting aside an arbitral award in Ontario, are available only on an application commenced within the thirty (30) days. A party who did not bring that application cannot bring its grounds to the enforcement hearing. The Divisional Court in Ledsham at ¶ 25 held that the appellant, having taken no appeal or review within thirty (30) days, “was not entitled to mount a collateral attack on the arbitral decisions during the enforcement application,” at ¶ 28 that “[t]he application judge had no jurisdiction to conduct a review or appeal from the Arbitrator’s decision,” and at ¶ 32 that “[t]he appellant may not mount an attack on the arbitration decision during enforcement proceedings. To do so is vexatious.” Myers J. in Abittan at ¶ 14 put the consequence of the choice to arbitrate as follows. “Peoples’ decisions to resolve their disputes by arbitration have consequences. One consequence is that, unless they agree otherwise in their arbitration agreements, they cannot come to the court when they feel aggrieved by the arbitrator’s decisions except in the very limited circumstances set out in the statute. The court has no ability to reconsider the findings of fact or law made by the arbitrator in this proceeding.” In Kapahi, a debtor’s attempt to reopen the question of his personal liability for costs by a motion under Rule 59.06 to vary the enforcement order failed for the same reason, Myers J. observing at ¶ 36 that “[t]he place for those arguments was on appeal rather than by efforts to re-argue the case under the guise of correcting a slip or due to new facts.”

Set-off and cross-claims are not a ground either. In Abittan at ¶ 23, Myers J. held that “the existence of possible claims by Ms. Wilcox against Ms. Abittan is not a basis to decline enforcement of the arbitral awards under the mandatory terms of s. 50 (3) of the statute.” In Zenith, the debtor had sued the creditor for breach of trust in a separate action and asked the court to hold the awards until that action was decided. Glustein J. held at ¶ 58 that the trust claim was a separate cause of action from the contract claim decided in the arbitration, and at ¶ 64 that a stay would allow a party to “improperly withhold funds, bring an arbitration, wait for the result, and then decide to litigate delays and deficiencies from the project in order to delay execution if the party is dissatisfied with the result of the arbitration.”

Section 50(7) is the one provision of s. 50 that looks at the content of the award, and it is confined to the form of the remedy. It provides that “[i]f the award gives a remedy that the court does not have jurisdiction to grant or would not grant in a proceeding based on similar circumstances, the court may, (a) grant a different remedy requested by the applicant; or (b) in the case of an award made in Ontario, remit it to the arbitral tribunal with the court’s opinion, in which case the arbitral tribunal may award a different remedy.” Myers J. held in Abittan at ¶ 15 that “[s]ubsection 50 (7) is a very narrowly drafted section,” that it does not provide “an additional appeal route (with no leave to appeal requirement as in s. 45),” and that “[n]either is it a safety valve through which the court can impose its own views on the justness or adequacy of the findings of facts and law made by the Arbitrator”; and at ¶ 17 that “it would be wholly inconsistent with limited role of the court intended by the statutory scheme to interpret s. 50 (7) to allow a court to conduct a review of the merits of an arbitral award in an enforcement application.” The subsection is for the award that orders something a court would not order. Professor Tamar Meshel’s treatise, Arbitration Law: Statutes, Cases and Commentary (LexisNexis), at § 10.09[4], gives as the example Thompson v. Thiessen, [2001] O.J. No. 2152 (S.C.J.), in which a consent award provided that future disputes between the parties would be decided by the same arbitrator, without counsel, in half a day, a remedy no court would grant.

Equitable objections to the creditor’s conduct have a narrow field. In Canada Soccer at ¶ 34, Bell J. rejected an “unclean hands” argument against interim enforcement under s. 50(5)(a) on the basis that only conduct immediately and necessarily related to the claim in question bars equitable relief.

The thirty days and the pending challenge

Section 50(5) provides that “[i]f the period for commencing an appeal, application to set the award aside or application for a declaration of invalidity has not yet elapsed, or if such a proceeding is pending, the court may, (a) enforce the award; or (b) order, on such conditions as are just, that enforcement of the award is stayed until the period has elapsed without such a proceeding being commenced, or until the pending proceeding is finally disposed of,” and s. 50(6) adds that a court which stays enforcement of an Ontario award pending a proceeding “may give directions for the speedy disposition of the proceeding.” Mew J. explained the relationship between the subsections in Kingston Automation Technology Inc. v. Montebello Packaging, 2021 ONSC 2684 (“Kingston Automation”) at ¶ 13, rejecting the losing party’s submission that s. 50(3) created a presumption in favour of a stay and holding that, “[a]lthough the language of subsection (5) is inelegant, in my view it qualifies the application of subsection (3).” The pending challenge therefore takes the award out of the mandatory words of s. 50(3) and into the discretion of s. 50(5), under which the court may enforce at once, stay on conditions, or stay outright.

The discretion is exercised on the familiar test for a stay pending a proceeding. Both parties in Kingston Automation accepted, and Mew J. applied at ¶ 14, the three (3) questions of RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (“RJR-MacDonald”); namely, whether the challenge raises a serious question, whether the party seeking the stay would suffer irreparable harm without it, and where the balance of convenience lies. Bell J. applied the same test in Canada Soccer at ¶ 14, and noted at ¶ 15 that the three (3) criteria are not watertight compartments and that the court decides whether the interests of justice call for a stay. On the first question, a set-aside application that attacks the merits of the award under the guise of a ground in s. 46 raises no serious question, which was the finding in Canada Soccer at ¶ 25, since the court on the set-aside application will not look at the merits either. On the second and third, the losing party in Kingston Automation could show neither irreparable harm nor a balance of convenience in its favour, since the disputed amounts had been paid into trust, and the stay was refused at ¶ 33. In Canada Soccer, the club would have lost a season, its players and its sponsors, and the balance of convenience went strongly against the governing body at ¶ 29.

The stay, when granted, comes with conditions. In DAC Group, the application judge stayed enforcement of the award pending the set-aside application on condition that the debtor pay the creditor $25,000 on the fifteenth day of every month, and the Court of Appeal held at ¶¶ 2 and 8-10 that such an order is interlocutory, since the application remains before the court for a final determination under s. 50(3), so that an appeal from it lies to the Divisional Court. Interim enforcement under paragraph (a) is the mirror image. In Canada Soccer at ¶ 35, Bell J. ordered that “[a]n interim order will go under s. 50(5)(a) of the Arbitration Act, 1991, enforcing the arbitral award pending the determination of the application.” Professor Meshel observes at § 10.09[4] that Ontario courts have applied different tests under the two (2) paragraphs, the court under paragraph (a) weighing the bona fides of the challenge, the relative hardship to the parties and the conduct of the parties.

Two (2) further points follow from Kingston Automation. First, a motion to stay the arbitration itself, as opposed to the enforcement of the award, is for the arbitral tribunal, and Mew J. held at ¶ 34 that such an application should be made to the arbitrator under ss. 17(1) and 20(1) of the Act. Second, the leave requirement in s. 45(1) makes the serious question harder to show on a contractual award, since the Supreme Court held in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, that contractual interpretation is a question of mixed fact and law, a point Mew J. noted at ¶ 19.

Enforcement as a judgment and stays of execution

Once judgment is given, the award is enforced as a judgment, and the question becomes whether the debtor can obtain a stay of execution. The answer in Zenith is that the court has the power and almost never uses it. Glustein J. held at ¶ 39 that “[t]he requirement under s. 50(5) that the court enforce an arbitral award does not preclude a stay of execution under s. 106 of the CJA,” since “[s]ection 50(8) renders a final arbitral award the same as a final judgment, permitting a stay under the analysis in Carlisle.” Section 106 of the CJA provides that “[a] court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.” The analysis in 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2003] O.J. No. 6300 (Div. Ct.), aff’d [2005] O.J. No. 118 (C.A.) (“Carlisle”), which Glustein J. set out at ¶¶ 46-48, allows a stay of a final judgment only “in very rare circumstances,” and the test, which he quoted at ¶ 47 from Gruner v. McCormack (2000), 45 C.P.C. (4th) 273 (S.C.J.), requires the debtor to show that “a continuance of the action would work an injustice because it would be oppressive or vexatious or an abuse of the process of the Court and that the stay would not cause an injustice to the plaintiff.” Cunningham A.C.J. had said in Carlisle at ¶ 7, as quoted in Zenith at ¶ 46, that “[i]t has always been fundamental that a judgment is final and that there is no jurisdiction in the court to prevent or limit the exercise of a judgment creditor’s right to enforce, in the absence of such power being expressly conferred.” The debtor in Zenith failed on that test and on the RJR-MacDonald test alike (¶ 52), and Glustein J. added at ¶ 64 that a stay “would ‘frustrate commercial enterprise and…would encourage a whole new area of litigation.’”

The stay provisions of the Rules do not apply to an award. Rule 20.08, which allows the court to stay the enforcement of a summary judgment pending the determination of another issue in the action or of a counterclaim, crossclaim or third party claim, was held inapplicable in Zenith at ¶¶ 75-76, because an award is treated as a final judgment “determined after a full hearing on the merits,” and Professor Meshel’s summary at § 10.09[4] is that an arbitration award is not subject to the stay provisions of the Rules. An appeal from the enforcement judgment itself, where one lies, is different, because Rule 63.01(1) provides that the delivery of a notice of appeal stays any provision of the order for the payment of money until the appeal is disposed of, and the creditor’s answer is a motion under Rule 63.01(5) to lift the stay or, where the appeal has no merit, a motion to quash it, which is what the creditor brought in BGOI.

Which court hears an appeal from the enforcement judgment depends on what was decided. In Weinstein, the judgment was given on the set-aside application and the enforcement application together, and the Court of Appeal held at ¶ 1 that “s. 49 of the Arbitration Act, 1991 applies” and that the appellant needed leave, which it refused at ¶ 4. In BGOI, the appeal from the enforcement judgment was quashed at ¶ 5 because the appeal from the refusal of leave to appeal the award had been quashed and nothing remained to be argued. In DAC Group, the conditional stay was interlocutory and the appeal belonged in the Divisional Court. In InFrontier, Popack v. Lipszyc, 2018 ONCA 635 (“Popack”), and All Communications Network of Canada, Co. v. Planet Energy Corp., 2023 ONCA 319 (“ACN”), all decided under the ICAA, the Court of Appeal heard the appeals from the recognition judgments on their merits, and Brown J.A. held in Popack at ¶¶ 31-34 that the interpretation of the ICAA and the Model Law is a question of law reviewed for correctness, while the application of the statute to the facts and the interpretation of the arbitration agreement attract deference.

The ten-year limit

Section 52(3) of the Act provides that “[a]n application to enforce an award shall not be commenced after the later of December 31, 2018 and the tenth anniversary of, (a) the day the award was received; or (b) if an application to set aside the award was commenced, the date on which the application was finally determined.” The subsection was added by the legislation that enacted the ICAA in 2017, and s. 10 of the ICAA is its counterpart for international and foreign awards, under which no application for recognition or enforcement “shall be made after the later of December 31, 2018 and the tenth anniversary of, (a) the date on which the award was made; or (b) if proceedings at the place of arbitration to set aside the award were commenced, the date on which the proceedings concluded.” The two (2) periods are Ontario’s answer to Yugraneft, in which the Supreme Court held at ¶¶ 15-23 that the limitation period for enforcing a foreign award is a matter for the local law of the enforcing jurisdiction, as a “rule of procedure” within art. III of the Convention, and that Alberta’s two-year period applied, so that an application to enforce a Russian award of US$952,614.43, made in September 2002 and brought in January 2006, was out of time. The Court held at ¶¶ 54-57 that the obligation under the award became exigible, for limitation purposes, when the three (3) months for a set-aside application at the seat expired or, if such an application was taken, when it was decided, and that trigger is the one the Ontario provisions adopt.

The ten (10) years are long enough that the limit will seldom decide a case, but the trigger matters. Under s. 52(3) the period runs from receipt of the award, under s. 10 of the ICAA from the date the award was made, and under both from the final determination of a set-aside application where one was brought. Neither provision turns on discoverability, which was the argument that failed in Yugraneft at ¶¶ 58-62 because the debtor was identified in the contract as an Alberta corporation with its head office there. The practical point is a different one. Interest runs throughout, but assets move, and the creditor who waits years to enforce may find nothing left to execute against.

Awards made elsewhere in Canada

Section 50(4) applies to an award made in another province or territory. It provides that the court “shall give a judgment enforcing an award made elsewhere in Canada unless” one of five (5) circumstances exists; namely, that the period for an appeal or set-aside application “provided by the laws of the province or territory where the award was made has not yet elapsed,” that such a proceeding is pending there, that the award has been set aside there or the arbitration has been declared invalid there, that “the subject-matter of the award is not capable of being the subject of arbitration under Ontario law,” or that the award is a family arbitration award. The first three (3) are the Ontario grounds adapted to the law of the seat, which decides how long the losing party had to challenge the award and whether it did, and the fourth is the one ground on which the Ontario court looks at the subject-matter. Section 50(5) applies to these awards as it does to Ontario awards, so the court may enforce or stay while a challenge at the seat is pending, and s. 52(3) sets the same ten-year limit.

The ICAA draws the line between this regime and the international one. Section 2(3) of the ICAA provides that an award made in a jurisdiction within Canada that is considered international in that jurisdiction is not a domestic award for the purposes of art. I(1) of the Convention, and that an award made within Canada that is not considered international where it was made is a domestic award. An award made in Calgary in a domestic arbitration between two (2) Canadian companies is enforced in Ontario under s. 50(4); an award made in Vancouver in an international arbitration is enforced under the ICAA. Section 2(1) of the Act makes the two (2) statutes mutually exclusive, as the Court of Appeal noted in Draper Farms at ¶ 14, and the first question on any application is which of them applies.

International and foreign awards

The ICAA gives two (2) instruments the force of law in Ontario. Section 2(1) provides that the Convention, set out in Schedule 1 to the ICAA, “has force of law in Ontario in relation to arbitral awards or arbitration agreements in respect of differences arising out of commercial legal relationships.” Section 5(1) provides that the Model Law, set out in Schedule 2, “has force of law in Ontario,” and s. 5(3) that it “applies to international commercial arbitration agreements and awards made in international commercial arbitrations.” Section 3 provides that an application for recognition and enforcement under the Convention “shall be made to the Superior Court of Justice,” and s. 6(2) that the “court” in the Model Law means the same court. Zarnett J.A. described the division of labour in InFrontier at ¶ 1, stating that “[i]n Ontario, recognition and enforcement of foreign arbitration awards is governed by the International Commercial Arbitration Act, 2017,” that one way in which the ICAA does so “is by giving force of law to the Convention,” and that the Convention’s provisions “apply to the recognition and enforcement of an arbitral award made in another ‘State’ that has accepted the Convention,” with the Model Law’s recognition provisions covering the international awards the Convention does not govern.

The two (2) instruments overlap. Vermette J. explained in Costco Wholesale Corp. v. TicketOps Corp., 2023 ONSC 573 (“Costco”) at ¶ 40, that both applied to awards made in Seattle against an Ontario company, the Convention because the awards “were made in the territory of a State (U.S.A.) other than the State where the recognition and enforcement of the Awards are sought (Canada),” and the Model Law because the parties had their places of business in different countries when they made the arbitration agreement, which makes the arbitration “international” under art. 1(3)(a). Article 1(2) of the Model Law provides that arts. 35 and 36 apply even where the place of arbitration is outside Ontario, and art. 35(1) provides that an arbitral award, “irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of this article and of article 36.” An international award made in Ontario is enforced under the same articles. The ICDR award of $29,259,787 made in Toronto in ACN, and the award of the New York rabbinical court that had sat in Toronto in Popack, which the parties agreed was subject to the ICAA, were both enforced under arts. 35 and 36.

Article IV of the Convention and art. 35(2) of the Model Law set out what the applicant files; namely, the duly authenticated original award or a duly certified copy, the original arbitration agreement or a certified copy, and, where the award is not in English or French, a certified translation. Chiappetta J. held in Depo Traffic Facilities (Kunshan) Co. v. Vikeda International Logistics and Automotive Supply Ltd., 2015 ONSC 999 (“Depo Traffic”) at ¶ 31, that “[w]here an applicant has complied with article 35(2), the Court shall recognize and enforce an award” unless the respondent proves a ground under art. 36(1)(a), and Vermette J. held in Costco at ¶ 69 that, Costco having supplied certified copies of the awards, “the recognition and enforcement of the Awards may be refused only if one of the grounds set out in article 36 is established.” No prior confirmation of the award by the courts of the seat is required. The Court of Appeal held in Dalimpex Ltd. v. Janicki, 2003 CanLII 34234 (ON CA) (“Dalimpex”) at ¶¶ 52-53, that a Polish award did not need to be confirmed by a Polish court to be binding, and Brown J.A. noted in Popack at ¶ 42 that the Convention abandoned the requirement of “double exequatur.” In Costco, the awards had also been confirmed by the United States District Court, and Vermette J. analyzed the application at ¶¶ 65-68 as one to enforce the awards themselves under the Model Law.

The proceeding is an application, and it stays one. In Costco at ¶¶ 103-108, the respondent moved under Rule 38.10 to convert the application into an action and to consolidate it with three (3) Ontario actions. Vermette J. refused, holding at ¶ 105 that “disputed facts that relate to the merits of the action upon which the foreign judgment/arbitral award is based are not a basis upon which to convert an application to enforce into an action,” at ¶ 106 that “the grounds on which the enforcement of an international arbitral award can be refused are limited and narrow” and “[a] trial is not required,” and at ¶ 108 that conversion and consolidation “would be contrary to the objectives of the ICAA, the Convention and the Model Law.” The Court of Appeal held in ACN at ¶ 49 that the application judge was entitled to rely on the arbitrator’s findings and that no hearing de novo was required, and at ¶ 59 that the appellant “is asking this Court to consider the evidentiary record anew and substitute new findings for those made by the Arbitrator. This is not the proper role of the Court on this application.”

Article V(1) of the Convention provides that recognition and enforcement “may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof” of one of five (5) matters, and art. V(2) adds two (2) matters the court may find of its own motion. Article 36(1) of the Model Law is to the same effect, and Brown J.A. observed in Popack at ¶¶ 37-39 that the art. 36(1) grounds mirror the grounds for setting aside in art. 34(2), with the addition of the award that is “not yet binding.” The five (5) grounds the resisting party must prove are, first, that a party to the arbitration agreement was under an incapacity or that the agreement is not valid under the law the parties chose or, failing a choice, the law of the country where the award was made; second, that the resisting party “was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case”; third, that the award deals with a dispute not contemplated by or not falling within the submission to arbitration, in which case the part that does fall within it may still be enforced; fourth, that “the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place”; and fifth, that the award “has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made.” The two (2) grounds the court may find for itself are that the subject-matter of the dispute is not capable of settlement by arbitration under the law of Ontario, and that recognition or enforcement “would be contrary to the public policy of this State,” which s. 6(1) of the ICAA reads as Ontario.

Three (3) principles govern the application of the grounds. The first is narrow construction. Brown J.A. held in Popack at ¶ 35 that “[i]nternational and provincial instruments have established, in Ontario, a strong ‘pro-enforcement’ legal regime for the recognition and enforcement of international commercial arbitration awards,” and at ¶ 40 that “[t]he general rule of interpreting the recognition and enforcement provisions of the Convention and Model Law is that ‘the grounds for refusal of enforcement are to be construed narrowly,’” quoting Lax J. in Corporacion Transnacional de Inversiones, S.A. de C.V. v. STET International, S.p.A. (1999), 45 O.R. (3d) 183 (S.C.J.) (“STET”) at ¶ 26, aff’d (2000), 49 O.R. (3d) 414 (C.A.). Vermette J. repeated the rule in Costco at ¶ 45, and the Supreme Court said in Yugraneft at ¶ 9 that the Convention “requires each Contracting State to recognize and enforce arbitral awards made in the territory of another State, and that recognition and enforcement can only be refused on the limited grounds set out in art. V.” The second is onus. The party resisting enforcement must prove the ground, as Chiappetta J. held in Depo Traffic at ¶ 32 and C. Chang J. held in China Yantai Friction Co. v. Novalex Inc., 2024 ONSC 608 (“China Yantai”) at ¶ 37, and, as the Court of Appeal put it in InFrontier at ¶ 2, recognition and enforcement “may be refused only if the party resisting it establishes one or more specified grounds.” The third is discretion. Even where a ground is proved, the court “may” refuse, and it may instead enforce. Chiappetta J. held in Depo Traffic at ¶ 32, citing Schreter v. Gasmac Inc. (1992), 7 O.R. (3d) 608 (Gen. Div.) (“Schreter”), that the discretion “does not give rise to an obligation by the Court to refuse to enforce or put aside the arbitral award,” and Chang J. held in China Yantai at ¶¶ 46-48 that, even had procedural unfairness been shown, the court would not have exercised its discretion to refuse recognition.

The ground argued most often is the second, and the cases show both its reach and its limit. The test, taken from the set-aside cases, is a high one. Thorburn J.A. held in ACN at ¶ 42 that “[t]he onus on a party seeking to set aside an arbitral award on the basis of a failure of due process, is high,” and that “[j]udicial intervention for alleged violations of the due process requirements of the Model Law will be warranted only when the Tribunal’s conduct is so serious that it cannot be condoned under the law of the enforcing State,” quoting Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939 (“Consolidated Contractors”) at ¶ 65, which in turn quoted STET at ¶ 34. Vermette J. summarized in Costco at ¶ 47, from Nelson v. The Government of the United Mexican States, 2022 ONSC 1193 at ¶ 34, the three (3) situations in which a party has been unable to present its case; namely, where the award rests on a theory of liability the parties were not given an opportunity to address, where a party was not given an opportunity to respond to arguments, and where the tribunal ignored or failed to take into account the evidence or submissions. Complaints about the tribunal’s rulings on document production, cross-examination and closing submissions failed in ACN at ¶¶ 48-49 and 54. A complaint that the tribunal had refused a request to retain appraisers, made after the evidence was closed, failed in China Yantai at ¶ 42, where the institution’s rules gave the tribunal authority over the admission of evidence. A complaint that the tribunal had not addressed an argument about double recovery failed in Depo Traffic at ¶ 39, Chiappetta J. holding that “[t]o accept the Respondent’s submission would effectively expand the restrictive list of reasons to refuse enforcement.”

Tianjin Dinghui is the case on the other side of the line. The applicant held an award of about $120 million from the Shenzhen Court of International Arbitration against two (2) guarantors who had told it, by message in March 2020, that they were staying in Canada during the pandemic, and it had served the arbitration materials by courier at a corporate address in China, where a company controller signed for them, and at a residence that had been sold. Kimmel J. held at ¶ 57 that “proper notice” under the Model Law “has been held to mean notice that is reasonably calculated to inform the party of the arbitral proceedings and give them an opportunity to respond,” which “does not require actual notice,” and at ¶ 77 that “[i]f TDH wanted to rely upon the contractual notice provisions it should have complied with them,” since deemed service under the institution’s rules, “although sufficient for purposes of the SIPC’s determination in the Set-Aside Proceedings,” was “not proper service under the Model Law in the circumstances of this case.” For an award of that size against two (2) Canadians known to be in Canada, she held at ¶ 79, “strict compliance with the contractual notice requirements is what would have to be demonstrated for ‘proper notice’ to be grounded in the contractual notice provisions.” The respondents met their onus (¶ 81), the dismissal of their set-aside applications by the court of the seat raised no issue estoppel because that court had decided deemed service under the institution’s rules and had not decided whether the notice was reasonably calculated to reach them (¶¶ 84-92), and the application was dismissed at ¶¶ 117-118, with costs of $160,000 to the respondents (¶¶ 123-125). Kimmel J. added at ¶ 88 that “[u]nquestionably, the court should defer to decisions made by the court in the seat of the arbitration on questions decided by that court,” so the result turned on what the Shenzhen court had decided.

The fourth ground, that the procedure departed from the parties’ agreement, was the ground in InFrontier. The loan agreement provided for arbitration under the rules of the DIFC-LCIA Arbitration Centre, which a Dubai decree abolished in September 2021, transferring its functions to the Dubai International Arbitration Centre, and the arbitration was conducted under the DIAC Rules over the guarantor’s objection. The Court of Appeal held at ¶¶ 33-35 that art. V(1)(d) gives effect to the parties’ autonomy over procedure and that the court must first interpret the agreement to determine what procedure the parties agreed to, at ¶ 37 that the parties had agreed to “such amended version” of the rules as was adopted before the arbitration commenced, at ¶ 43 that the application judge made no error in looking at the decree to determine whether an amendment had been effected, and at ¶ 49 that the rules agreed to and the rules the arbitrator applied were the same, so that the ground was not made out. The guarantor’s further arguments, that he had been unable to present his case and that enforcement would offend public policy, were derivative and failed with it at ¶ 50, and the appeal was dismissed with costs of $30,000 at ¶¶ 52-53. The decision is the Court of Appeal’s reminder that institutional rules are the parties’ own, Zarnett J.A. citing at ¶ 39 the statement in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”) at ¶ 52, that “the rules become those of the parties, regardless of where they are taken from.”

The fifth ground, that the award “has not yet become binding,” was the ground in Popack, and the Court of Appeal’s answer defines the word. The application judge had refused recognition of a $400,000 award because the losing party intended to raise further issues before the tribunal and the tribunal had purported to “stay” its own award. Brown J.A. held at ¶¶ 49-51 that Yugraneft governs, so that an award is not binding under art. V(1)(e) of the Convention or art. 36(1)(a)(v) of the Model Law if it is open to being set aside under art. 34, either because the three (3) months for a set-aside application have not expired or because set-aside proceedings have not come to an end, and that, in the Supreme Court’s words at ¶ 57 of Yugraneft, “the obligation to pay the award becomes exigible on the date the appeal period expires or, if an appeal is taken, the date of the appeal decision.” The award in Popack became binding when the set-aside proceedings were finally disposed of (¶ 53); the tribunal, having made a final award, was functus officio (¶¶ 75-76); its purported stay was not a suspension “by a court of the country in which, or under the law of which, that award was made” (¶ 86); and, as Brown J.A. held at ¶ 84, “[t]he final determination of any issue that may be raised under art. 36, including whether the award is ‘binding’, rests with the court, not the arbitral tribunal,” citing Dalimpex at ¶ 47. The Court of Appeal substituted an order recognizing and enforcing the award, with costs of $25,000 on the appeal and $15,000 below (¶¶ 88-89).

Where set-aside proceedings are pending at the seat, art. VI of the Convention and art. 36(2) of the Model Law allow the Ontario court, “if it considers it proper,” to adjourn its decision and to order the resisting party to give security. In Dalimpex at ¶¶ 55 and 61, the Court of Appeal held that the only orders open under arts. 35 and 36 are to allow, adjourn or dismiss the application, that a “provisional” judgment recognizing the award was none of them, and that the application should have been adjourned under art. 36(2) pending the Polish appeal. A decision at the seat is not conclusive either way. An award set aside at the seat “may” be refused recognition, which leaves the court a discretion, and Tianjin Dinghui shows that an award upheld at the seat may still be refused where the ground was not decided there.

The public policy ground is argued often and succeeds almost never. The test is Lax J.’s in STET at ¶ 30, which the Court of Appeal adopted in InFrontier at ¶ 51; namely, that “to succeed on [the public policy ground] the award must fundamentally offend the most basic and explicit principles of justice and fairness in Ontario, or evidence intolerable ignorance or corruption on the part of the Arbitral Tribunal,” with a reference to Clayton v. Canada (Attorney General), 2024 ONCA 581 at ¶¶ 35-37. Feldman J.’s formulation in Schreter, quoted in ACN at ¶ 72, is that the party must show that enforcement “offends our local principles of justice and fairness in a fundamental way.” Chiappetta J. held in Depo Traffic at ¶ 45 that “[p]ublic policy is truly an exceptional defence,” and adopted at ¶ 47 Professor McLeod’s statement that the prohibition “ought to be invoked only if the judgment involves an act that is illegal in the forum or if the action involves acts repugnant to the orderly functioning of the social or commercial life of the forum,” the example being “the enforcement of a gambling debt which would be illegal in Ontario.” The argument failed in Depo Traffic at ¶ 48. It failed in ACN, where the Court of Appeal held at ¶ 73 that the arbitrator had considered and applied the Ontario consumer protection statute relied on. It failed in Costco, where Vermette J. held at ¶ 94 that “the public policy defence is not meant to bar enforcement of a foreign judgment or arbitral award for the sole reason that the claim would not yield comparable damages in Canada,” noting that foreign judgments for treble and punitive damages have been enforced in Ontario, and at ¶ 100 that “the defence of public policy does not extend to perceived injustices that do not offend our sense of morality.” It failed in China Yantai, where Chang J. held at ¶ 61 that the parties had agreed to arbitrate under the CIETAC Rules and Chinese law, that “they did exactly that and there is simply nothing in what occurred in the arbitration that offends our principles of justice and fairness in a fundamental way.” It failed in InFrontier, and Kimmel J. rejected it in Tianjin Dinghui at ¶¶ 121-122, holding that no blanket public policy exists against enforcing awards made in China.

An award in a foreign currency is converted under s. 121 of the CJA, which requires the order to provide for payment of “an amount in Canadian currency sufficient to purchase the amount of the obligation in the foreign currency at a bank in Ontario listed in Schedule I to the Bank Act (Canada) at the close of business on the first day on which the bank quotes a Canadian dollar rate for purchase of the foreign currency before the day payment of the obligation is received by the creditor,” unless the court finds that conversion on that day would be inequitable or the obligation itself provides for the manner of conversion. Vermette J. made an order in those terms in Costco at ¶ 111, with interest in accordance with the awards at ¶ 112. An award in United States dollars is therefore paid in Canadian dollars at the rate of the day before payment, and the party who wants another day must show that conversion on that day would be inequitable. The judgment that recognizes and enforces a foreign award is a judgment of the Superior Court for the payment of money; in InFrontier, the application judge recognized the award as binding and enforceable in Ontario and ordered the guarantor to pay the amounts owing (¶ 3), and such a judgment is executed under Rule 60 like any other.

Costs on these applications follow the event, and the figures are worth knowing. The successful applicants recovered $40,000 in Depo Traffic (¶ 58), $50,000 by agreement in China Yantai (¶ 63), $25,000 on the appeal in ACN (¶ 75), $25,000 on the appeal and $15,000 below in Popack (¶ 89), and $30,000 on the appeal in InFrontier (¶ 53). The successful respondents in Tianjin Dinghui recovered $160,000 on the application, less the $65,000 awarded against them on their failed fresh-evidence motion (¶¶ 123-125).

Collection after judgment

The judgment is the beginning of collection. Rule 60.02(1) provides that “an order for the payment or recovery of money may be enforced by, (a) a writ of seizure and sale (Form 60A) under rule 60.07; (b) garnishment under rule 60.08; (c) a writ of sequestration (Form 60B) under rule 60.09; and (d) the appointment of a receiver,” and Rule 60.18(2) allows the creditor to examine the debtor on “the reason for nonpayment or nonperformance of the order,” “the debtor’s income and property,” “the debts owed to and by the debtor,” “the disposal the debtor has made of any property either before or after the making of the order,” and “the debtor’s present, past and future means to satisfy the order.” The sequel to Canada Soccer, Canadian Soccer Assn. Inc. v. Assn. de Soccer de Brossard, 2023 ONSC 4317 at ¶ 2, records that, when the governing body failed to pay the costs of the arbitration, the club commenced garnishment proceedings and served the notice on the debtor and its bank. In Kapahi at ¶ 35, the creditors delivered a notice of examination in aid of execution to enforce the costs liability, and Myers J. upheld at ¶ 40 the finding that the individual respondents were jointly and severally liable for the costs the tribunal had awarded against “the Respondents.”

The creditor who fears that assets will move before the award is paid is not confined to the remedies that follow judgment. Section 8(1) of the Act provides that “[t]he court’s powers with respect to the detention, preservation and inspection of property, interim injunctions and the appointment of receivers are the same in arbitrations as in court actions,” so a Mareva injunction or the appointment of a receiver is available in aid of an arbitration on the same footing as in an action, and the examination of the debtor after judgment is the ordinary way to find what the writ should attach. Awards against the Crown are enforceable too. Section 51 of the Act provides that “[t]his Act binds the Crown,” and s. 12(2) of the ICAA provides that “[a]n award recognized pursuant to this Act is enforceable against the Crown in the same manner and to the same extent as a judgment is enforceable against the Crown.”

An award made in Ontario travels. More than 170 states are parties to the Convention, and art. III obliges each of them to “recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon,” without imposing “substantially more onerous conditions or higher fees or charges” than apply to its own domestic awards. The creditor of an Ontario award against a debtor with assets in New York, London or Singapore applies there with the authenticated award and the arbitration agreement under art. IV, and the abandonment of “double exequatur” noted in Popack at ¶ 42 means that no Ontario judgment is needed first. The reverse is the reason foreign creditors come to Ontario. The respondents in Depo Traffic, Costco, China Yantai, Tianjin Dinghui and InFrontier were Ontario companies or Ontario residents, and Chiappetta J. recorded at ¶ 2 of Depo Traffic that recognition was sought in Ontario “because Vikeda is an Ontario company.”

The arbitration clause

Most of what decides an enforcement application was decided when the clause was drafted. Five (5) points follow from the cases.

First, the agreement should be in writing and signed, whatever the domestic Act allows. Section 5(3) of the Act provides that “[a]n arbitration agreement need not be in writing,” but art. 7(2) of the Model Law provides that “[t]he arbitration agreement shall be in writing,” art. IV of the Convention requires the applicant to supply “the original agreement” or a certified copy, and the creditor who must enforce abroad, or against a guarantor who says he never agreed to arbitrate, needs the signed clause. The first ground in art. 36(1)(a) is that the agreement is not valid, and the Court of Appeal held in Dalimpex at ¶ 60 that, under the third ground, the application judge must make his or her own determination whether the dispute fell within the scope of the clause. A guarantee should contain the arbitration clause or incorporate it in terms, and name the guarantor as a party to it, since the awards in InFrontier and Tianjin Dinghui were awards against guarantors.

Second, the clause should name the institution, the rules and the version, and say what happens if the institution changes. The agreement in InFrontier survived the abolition of the institution it named because it referred to “such amended version” of the rules as was in force when the arbitration commenced, and the court read the decree that transferred the institution’s functions as effecting that amendment. A clause that names rules the institution no longer publishes invites the argument that failed there.

Third, the notice provisions should be ones the claimant can meet, and the claimant should meet them. Tianjin Dinghui turned on a claimant that relied on contractual notice provisions it had not complied with, against respondents who had told it where they were, and Kimmel J.’s holding at ¶ 79 that “strict compliance with the contractual notice requirements is what would have to be demonstrated” is the standard a claimant should assume. A clause that requires notice to a physical address only, with no provision for email and no obligation on each party to keep its address current, is a clause that will be argued about on the enforcement application.

Fourth, the clause should say in what currency the award is to be paid, at what rate interest runs before and after the award, and that the tribunal may award the costs of the arbitration. Section 121 of the CJA supplies a conversion rule where the parties have not, s. 57 of the Act supplies the CJA interest rates where the parties have not, and s. 54(4) provides that, in the absence of an award dealing with costs, each party bears its own legal expenses and an equal share of the tribunal’s fees, which is seldom what the winning party intended.

Fifth, the clause should provide that the award is final and binding and that it may be enforced in any court of competent jurisdiction, which was the language of the agreement in ACN at ¶ 9. The words “final and binding” remove the appeal under s. 45, as our article on appealing an arbitral award in Ontario explains, and so remove the first two (2) circumstances in s. 50(3) as to appeals, leaving the set-aside application under s. 46 as the only challenge that can delay enforcement. What the clause cannot do is give the court a wider review on enforcement, or a narrower one, since s. 3 of the Act makes ss. 46 and 50 provisions the parties cannot vary or exclude.

Practical considerations

For the creditor, the application should be ready on the thirty-first day. The award is received, the thirty (30) days of s. 47(1) run, and on their expiry without an appeal or a set-aside application the award is enforceable under s. 50(3) without discretion. The application record needs the original award or a certified copy, the arbitration agreement, and an affidavit proving receipt, the absence of any challenge, the amount outstanding and the interest computation; for a foreign award it needs the authenticated award, the agreement and any certified translation under art. IV of the Convention, and the draft judgment should include the currency conversion under s. 121 of the CJA. Where the debtor has commenced a challenge, the creditor should issue its application at once and ask that the two (2) be heard together, as they were in Weinstein and Lebovic, and should consider interim enforcement under s. 50(5)(a), as in Canada Soccer, where the award is one whose value lies in prompt performance. Where the debtor’s assets are at risk, the creditor should consider interim relief under s. 8(1) of the Act during the arbitration and an examination in aid of execution under Rule 60.18 the day the judgment issues. The ten-year limit in s. 52(3) of the Act and s. 10 of the ICAA is not a reason to wait, and assets that could be found in the first year are often gone by the third. The firm’s arbitration deadline calculator computes the thirty (30) days of s. 47(1), the earliest day of enforcement under s. 50(3) and the ten (10) year limit under s. 52(3) from the day the award was received.

For the debtor, the enforcement application is the wrong place to argue the award. The grounds of s. 46 and the merits are closed on that application, as Ledsham, Abittan and Kapahi hold, and an appeal from the enforcement judgment that raises nothing else risks being quashed with costs on a higher scale, as in BGOI. A debtor who has a ground must bring its appeal or set-aside application within the thirty (30) days, which the court cannot extend, and must then move under s. 50(5)(b) with evidence that meets the RJR-MacDonald test, since a bare application does not stay enforcement. The debtor who moves should propose terms, because the stay in DAC Group was granted on condition of monthly payments and the court in Canada Soccer refused one where the challenge attacked the merits. After judgment, the stay under s. 106 of the CJA is for “very rare circumstances,” as Zenith holds, and a separate action or a set-off is not one of them. A foreign award debtor has more to argue, since the grounds in art. 36 are open on the application itself, but the onus is the debtor’s, the court retains a discretion to enforce even where a ground is proved, and the public policy ground has been rejected in every recent Ontario decision discussed here. The one ground on which an Ontario respondent has recently succeeded is want of proper notice, in Tianjin Dinghui, and it succeeded on evidence of what the claimant knew and did.

Costs follow the event on both sides of the application. The creditor who succeeds recovers partial indemnity costs in the ordinary course, which in the cases discussed here ranged from $13,000 in Zenith to $50,000 in China Yantai; the debtor who resists without a ground pays them, and pays more where the resistance is found to have been brought to delay, as in BGOI; and the respondent who succeeds in resisting a foreign award recovers its own, which in Tianjin Dinghui came to $160,000.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract, lease and fraud disputes, and in the court proceedings that follow the award, including applications to enforce an award under s. 50 of the Act, applications to recognize and enforce international and foreign awards under the ICAA, motions for interim enforcement or a stay under s. 50(5), and the collection steps that follow judgment. We also act for award debtors who have a ground to resist, in the thirty (30) days that follow the award and on the enforcement application. Our arbitration practice and our commercial litigation practice are described on the pages linked here; our civil fraud practice covers the tracing, Mareva and receivership remedies that an award creditor may need; our appellate practice covers the appeals and motions for leave discussed above; and our pages for American clients and European clients describe our work for parties outside Canada who hold awards against Ontario debtors. Our articles on setting aside an arbitral award in Ontario, on appealing an arbitral award in Ontario, on arbitrating a shareholder dispute in Ontario and on evidence in a commercial arbitration in Ontario deal with the two (2) routes of challenge, the arbitration of shareholder disputes, and the law of evidence before the tribunal. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Whether an award can be enforced, and on what terms, depends on the arbitration agreement, the award, the seat and the record, and the authorities cited should be read in full before they are relied on.

The post Enforcing an Arbitral Award in Ontario appeared first on Grigoras Law.

The practical consequence is that the right of appeal is decided twice, once when the arbitration clause is drafted and once when the award arrives. A clause that says the award is “final and binding” takes the appeal away. A clause that says nothing leaves a narrow appeal on a question of law, which the court will hear only if it grants leave, and which it will decide on a standard of review that the Superior Court has been debating since the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”). A clause that provides for an appeal on questions of law, or on questions of fact and mixed fact and law, gives the parties the appeal they bargained for. Whichever regime applies, the appeal must be commenced within thirty (30) days after the award is received, the court cannot extend that period, and a party who misses it is left with the ten (10) grounds for setting aside in s. 46, which are the subject of our article on setting aside an arbitral award in Ontario and which the Court of Appeal has said repeatedly are not an alternate appeal route.

This article sets out the law of appeals from a commercial arbitral award seated in Ontario as it stands in October 2026. It covers the three (3) regimes in s. 45, the effect of the arbitration agreement, the leave test under s. 45(1), the question of what counts as a question of law, the standard of review, the appeal and its remedies, the thirty-day limit and enforcement while the appeal is pending, the further appeal to the Court of Appeal under s. 49, the position of international awards under the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5 (the “ICAA”), and the drafting of the clause. It does not deal with family arbitration awards, which are governed by the Family Law Act, R.S.O. 1990, c. F.3, as well as by the Act.

The three regimes in section 45

Section 45 reads as follows. Subsection (1) provides that “[i]f the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that, (a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and (b) determination of the question of law at issue will significantly affect the rights of the parties.” Subsection (2) provides that “[i]f the arbitration agreement so provides, a party may appeal an award to the court on a question of law.” Subsection (3) provides that “[i]f the arbitration agreement so provides, a party may appeal an award to the court on a question of fact or on a question of mixed fact and law.” Subsection (4) allows the court to “require the arbitral tribunal to explain any matter,” and subsection (5) sets out the remedies, which are discussed below.

Three (3) regimes follow from that text. Where the agreement provides for an appeal on questions of law, the appeal lies without leave under s. 45(2). Where the agreement provides for an appeal on questions of fact or mixed fact and law, the appeal lies on those questions under s. 45(3). Where the agreement “does not deal with appeals on questions of law,” an appeal lies on a question of law only, and only with leave, under s. 45(1). A fourth position, common in commercial agreements, is that the agreement deals with appeals by excluding them, in which case no appeal lies at all. Dunphy J. summarized the combined effect of ss. 45(1) and (2) and s. 3 of the Act in Sitzer Group Holdings No. 1 Ltd. v. Grall Corp., 2026 ONSC 2452 (“Sitzer”) at ¶ 31, as follows. The parties “may expressly agree to allow appeals on questions of law in which case appeals on questions of law without leave are permitted”; they “may not deal with appeals on questions of law in their agreement expressly or impliedly in which case leave is required to appeal”; or they “may positively determine, expressly or impliedly, that appeals on questions of law are not permitted in which case no appeals on questions of law can be brought.”

The “court” in s. 45 is the Superior Court of Justice, by the definition in s. 1 of the Act, as the Court of Appeal noted in Denison Mines Ltd. v. Ontario Hydro (2001), 56 O.R. (3d) 181 (C.A.) (“Denison 2001”) at ¶ 3. In Toronto, an appeal from a commercial award is often heard on the Commercial List, where D Lands Inc. v. KS Victoria and King Inc., 2022 ONSC 1029 (“D Lands”), Sitzer and Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2022 ONSC 1900 (“Baffinland ONSC”) were all decided. The proceeding is an application. In Denison 2001 at ¶ 15, Morden J.A. held that the authority for bringing a leave application by application “is provided for by rule 14.05(3)(h)” of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), “because this is a ‘matter where it is unlikely that there will be any material facts in dispute,’” and at ¶ 21 that an order refusing leave “finally disposes of the moving party’s substantive right to relief in the court and is hence, a final order.” In practice the application asks for leave and, if leave is granted, for the appeal itself, and the court hears both at once, as it did in D Lands, Sitzer, Place Laurier Ltd. v. The Manufacturers Life Insurance Company, 2025 ONSC 4172 (“Place Laurier”), and Tedescon Infrastructure Ltd. v. Simcoe (County), 2026 ONSC 3548 (“Tedescon”).

The appeal under s. 45 is a creature of the 1991 Act. Under the former Arbitrations Act, an appeal lay only where the agreement provided for one, and the Court of Appeal observed in Denison Mines Ltd. v. Ontario Hydro (2002), 58 O.R. (3d) 26 (C.A.) (“Denison 2002”) at ¶ 4 that “[t]he Act changed the law respecting rights of appeal” by providing “that where the parties have not by agreement excluded an appeal, one lies with leave on a question of law.” Akazaki J. made the same point in Tedescon at ¶ 42, stating that “[a]ll appeals to courts are creatures of statute,” that “[i]n the previous iteration of the Act, s. 16(1) permitted appeals to Divisional Court, but only if the agreement provided for appeals,” and that “[t]he current 1991 Act provides a right of appeal to Superior Court with leave, on a question of law.” Those two (2) points, that the appeal exists because the statute creates it and that the statute lets the parties take it away, govern everything that follows.

The arbitration agreement and the right of appeal

Section 3 of the Act allows the parties to “agree, expressly or by implication, to vary or exclude any provision of this Act,” subject to the exceptions it lists, and s. 45 is not among the exceptions. An agreement therefore excludes the appeal when it says so, and it also excludes the appeal when its words imply as much. As Akazaki J. put it in Tedescon at ¶ 43, “[t]he first sentence of s. 45(1) has been interpreted as requiring express or implied exclusion of appeals, failing which the limited right exists,” and “[t]he statutory authority for this reading appears in s. 3, which provides that the parties may agree to exclude any provision in the Act ‘expressly or by implication.’” He added that this “reflects the primacy of party autonomy in modern arbitral jurisprudence,” citing TELUS Communications Inc. v. Wellman, 2019 SCC 19 at ¶ 52.

The words that most often do the excluding are “final and binding.” In Labourers’ International Union of North America, Local 183 v. Carpenters and Allied Workers, Local 27 (1997), 34 O.R. (3d) 472 (C.A.) (“Labourers’”), the Court of Appeal held that an agreement providing that the arbitration would be “final and binding,” and otherwise silent on appeals, excluded the appeal under s. 45(1), on the basis, as Sharpe J.A. later described it in Denison 2002 at ¶ 16, that “[t]he words ‘final and binding’ indicated an intention to exclude any right of appeal.” In Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245 (“Baffinland”), the clause provided that disputes would be “finally settled” by arbitration under the Rules of Arbitration of the International Chamber of Commerce. Zarnett J.A. held at ¶ 35 that the words “final and binding” are “terminology which has been held to preclude appeals from an arbitration award,” citing Labourers’, and at ¶ 39 that “[t]he ordinary and grammatical meaning of ‘finally settled’ by arbitration, when situated in the context of the contracts’ dispute resolution provisions, clearly means no further recourse by way of appeal, in the same way as ‘final and binding’ would.” At ¶ 42 he quoted J. Brian Casey’s text to the effect that “[b]y using the word ‘final’ the implication is that the parties intended to oust all rights of appeal,” and at ¶ 48 he concluded that “the arbitration agreement contained in the contracts dealt with appeals on questions of law by precluding them. As a result, leave to appeal was not available to BIM under s. 45(1) of the Arbitration Act.” The same result followed in Tedescon, where the agreement to arbitrate, a form supplied by the arbitrator, twice described the arbitration as “final and binding.” Akazaki J. held at ¶ 22 that those words “implicitly excluded any recourse to an appeal under s. 45(1)” and at ¶ 57 that, although “the ‘final and binding’ wording would have been insufficient to oust the right” had s. 3 required an express exclusion, “all the appellate authorities have interpreted the phrase as implicitly excluding a recourse to appeal.” In York Region Standard Condominium Corp. No. 1311 v. Star Woodworking Ltd., 2026 ONSC 2381 (“York Region”), the exclusion was in an arbitration agreement negotiated at the outset of the proceeding, which provided that the award was “final and binding and not subject to appeal,” and Pollak J. held at ¶ 30 that the appellants were bound by it and dismissed the leave application.

Lesser words do less. In D Lands, Dietrich J. reviewed the authorities at ¶¶ 42 to 49 and held at ¶ 44 that “if it is the intention of the parties to forgo appeal rights, the waiver of that substantive right should be clearly and unequivocally established,” and that such a waiver “will preclude an appeal with respect to any error of law, irrespective of the consequences for either party.” She noted at ¶ 43 the holding of Pattillo J. in Diorite Securities Limited, as Trustee of the Fern Trust v. Trevali Mining (New Brunswick) Ltd., 2019 ONSC 4225 (“Diorite Securities”), that a clause under which the parties agreed to be “bound by any decision reached pursuant to such arbitration” was, “without further wording to indicate the decision was intended to be final,” insufficient to exclude the appeal, and his explanation at ¶ 17 of that decision that “the agreement to be bound means no more in my view than the parties agree to abide by the decision.” On the lease before her, which incorporated institutional rules that were silent on appeals, she found at ¶ 50 that the parties “did not intend to, expressly or impliedly, exclude the possibility of a right of appeal.” In Sitzer, the clause in a 1971 co-tenancy agreement described the arbitrators’ decision as “final and conclusive.” Dunphy J. nonetheless held at ¶ 57, after examining the agreement, a related management agreement that was “entirely silent on appeals,” and the parties’ decision to re-affirm the clause days before the Act came into force, that the clause did “not preclude an appeal on questions of law expressly or by implication,” so that s. 45(1) applied. The lesson of Sitzer read with Baffinland and Tedescon is that the word “final” ordinarily excludes the appeal, but that the question remains one of contractual interpretation, decided on the words of the particular agreement in their context.

Which agreement governs can itself be the question. In Denison 2002, a 1977 sale agreement contained an arbitration clause that precluded any appeal, but the parties later signed a free-standing arbitration agreement, after the Act came into force and with a third party added, that was silent on appeals. The application judge held that the sale agreement governed and that she had no jurisdiction to grant leave. The Court of Appeal allowed the appeal, holding that the later agreement was a free-standing agreement and governed the arbitration, noting at ¶ 11 that “[i]t would surely be anomalous if one party to a tripartite agreement had the right to seek leave to appeal under s. 45(1) of the Act, but the other two parties did not,” and directing at ¶ 17 that the leave application proceed. The procedural agreements made during an arbitration matter in the same way. The agreement in York Region was made at the outset of the proceeding; the parties in Tedescon, as Akazaki J. observed at ¶ 60, “were free to reconsider the adequacy of the procedural agreement” when the dispute changed character and “[i]nstead of carving out a right of appeal for the new issue, they agreed to exchange fresh arbitral statements or pleadings incorporating the issue into the existing arbitration.”

The agreement can also enlarge the appeal. In Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 861 (“Tall Ships”) at ¶ 2, the parties had agreed “that the decision of the arbitrator was to be final, subject only to appeals on questions of law under s. 45(2).” In Rogers Communications Inc. v. Glentel Inc., 2026 ONSC 2446 (“Rogers”) at ¶ 23, the terms of settlement that referred the dispute to arbitration provided that “[a] party may appeal an award of the Arbitrator to the Ontario Superior Court of Justice on a question of law or a question of mixed fact and law,” so that the appeal lay without leave under ss. 45(2) and (3). In Continental Casualty Company v. Chubb Insurance Company of Canada, 2022 ONCA 188 (“Continental Casualty”) at ¶ 48, the arbitration agreement provided “for an appeal without leave to a Superior Court judge on questions of law or mixed fact and law.” Where the parties have chosen one of those regimes, the leave test in s. 45(1) does not apply, and the court goes directly to the merits on the questions the agreement allows.

Leave under section 45(1)

Where the agreement is silent, the party who wants to appeal must obtain leave, and s. 45(1) tells the court to grant it “only if it is satisfied” of two (2) things; namely, that “the importance to the parties of the matters at stake in the arbitration justifies an appeal,” and that “determination of the question of law at issue will significantly affect the rights of the parties.” Ground J. read those words in the leave decision that followed Denison 2002, reported as Denison Mines Ltd. v. Ontario Hydro (2002), 61 O.R. (3d) 291 (S.C.J.) (“Denison Leave”), and his reading has been the framework since. At ¶ 4 he identified “three criteria which must be met in order for the court to grant leave to appeal,” as follows. The appeal “must be on a question of law”; “the importance to the parties of the matters at stake in the arbitration must justify an appeal”; and “the determination of the questions of law at issue on the appeal will significantly affect the rights of the parties.” At ¶ 9 he held that the two (2) statutory criteria “are conjunctive and obviously both must be satisfied,” and at ¶ 3 he recorded the agreement of counsel “that there is residuary discretion in the court with respect to granting leave to appeal even if the criteria set out in subsection 45(1) are found to be established.”

Two (2) requirements that the words do not contain have been rejected. The first is public importance. Ground J. held at ¶ 7 that “grammatically it is the importance to the parties which must justify the appeal,” and that “[t]he statute makes no reference to matters of public interest or general application and none of the Ontario authorities cited make any such reference.” The second is a threshold showing that the award is wrong. At ¶ 8 he declined to follow an earlier decision that had imported the “good reason to doubt the correctness” test used for leave to appeal interlocutory orders, stating that he was “unable to conclude that the law of Ontario requires that the court find that there was good reason to doubt the correctness of the arbitrator’s decision or otherwise apply rule 62.02(4),” and that the law “is correctly stated in Hillmond Investments Ltd. v. Canadian Imperial Bank of Commerce (1996), 29 O.R. (3d) 612 (C.A.),” where the Court of Appeal “determined that the function of the Superior Court under s. 45 of [the] Act is to serve as a check on unnecessary or frivolous appeals.” The merits are not irrelevant, however. A court will not grant leave to an appeal that cannot succeed, and Dunphy J. put the point in Sitzer at ¶¶ 62 and 64, stating that “absent an appeal which is obviously doomed to fail,” the respondent’s argument on the merits “places the cart before the horse,” that “[i]n considering leave, I must start by examining the prospective appeal as presented,” and that “[t]he appeal on its face is not ex facie doomed to failure.”

The importance criterion is ordinarily measured by what is at stake. Ground J. found it satisfied at ¶ 6 by a claim that “with the accumulation of interest now amounts to $22 million,” which “would have a significant impact on the financial position of Denison.” In D Lands at ¶ 57, Dietrich J. found both criteria met where “[t]he alleged errors raised on the appeal affect the valuation of the Demised Premises by as much as $31 million and would reduce the Tenant’s rent obligation by over $1 million per year and by over $25 million over the 25-year rental period.” In Place Laurier at ¶ 47, Jensen J. found “a very important issue for the parties” where “the difference between the appraised values is $11,502,000, which results in an annual rent differential of $1,092,690,” and “[o]ver the remaining 20-year term, the amount in dispute is $21,853,800.” In Sitzer at ¶ 60, “[t]he very high level of the importance of the issue to the parties” was “self-evident,” since the award “would see the transfer of one half of a very significant parcel of land from one party to another along with one half of the gains accrued on that investment over more than twenty years.” In Tedescon at ¶¶ 66 and 67, the court would have found the criterion met for both parties, the contractor having been “underfunded by $1,046,723.29 in unpaid Extras” and the municipality facing a damages claim in a project where “[m]illions of dollars of ratepayers’ funds were in issue.”

The second criterion, that determination of the question “will significantly affect the rights of the parties,” has been read in two (2) ways. Ground J. held in Denison Leave at ¶¶ 10 and 11 that “[t]he use of the phrase ‘will significantly affect’ of itself implies some future impact,” that the Ontario authorities “impart the need for some ongoing impact of the appeal decision on the rights of the parties,” and that “leave to appeal should not be granted unless the determination of the appeal will have some impact on the future rights of, or relationship between, the parties.” On that reading he refused leave, because “the only effect of the appeal would be to reverse an historic determination as to an amount payable between the parties” and the parties’ “contractual relationship came to an end in 1992.” The later decisions have asked a different question, which is whether the answer to the question of law would change the result. In Sitzer at ¶ 63, Dunphy J. held that “[i]f the pleaded error of law were established, the legal status of the parties would be significantly altered in that the claimed constructive trust interest in the neighboring land owned by a Sitzer affiliate would be rejected.” In Tedescon at ¶ 68, Akazaki J. described this criterion as “[t]he narrower and more nuanced point” and treated it as satisfied by “[t]he only salient issue requiring review of the choice or formulation of principle,” the arbitrator’s conclusion that the contractor was liable in damages, while refusing it for “the tabulation or calculation issues.” At ¶ 71 he noted that “the reviewing court’s task in appellate review and leave to appeal can often entail the same distillation process,” citing Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (“Sattva”) at ¶ 42. A party seeking leave should be ready to meet both readings, by showing what the appeal would change in the award and, where it can, what it would change in the parties’ continuing relationship.

A decision granting or refusing leave is, as a general rule, the end of the road. The Court of Appeal held in Hillmond that no appeal lies from an order refusing leave under s. 45(1), and in Denison 2001 at ¶ 6 Morden J.A. explained that “[t]he non-appealability of decisions refusing or granting leave to appeal is the general rule,” which “flows from the strong implication that, notwithstanding the wording of s. 6(1)(b) of the Courts of Justice Act, a general statute, no appeal is intended from an order made refusing or granting leave to appeal,” because “[a]ny other conclusion would defeat the purpose of s. 45(1), which is to limit appellate recourse to the courts in arbitration matters.” The one exception, described at ¶ 8 of the same decision, applies “where the judge mistakenly declines jurisdiction,” as where the judge refuses leave on the basis that the agreement excludes the appeal and that ruling is itself wrong. Both the rule and the exception are discussed under the further appeal to the Court of Appeal, below.

The question of law

The appeal under s. 45(1) and the appeal under s. 45(2) are both confined to questions of law, and the first task of the party who wants to appeal is to identify one. The Supreme Court of Canada set out the categories in Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 (“Teal Cedar”) at ¶ 43, stating that “legal questions are questions ‘about what the correct legal test is,’” that “factual questions are questions ‘about what actually took place between the parties,’” and that “mixed questions are questions about ‘whether the facts satisfy the legal tests’ or, in other words, they involve ‘applying a legal standard to a set of facts.’” The consequence of the characterization in an arbitration appeal is described at ¶ 46, which states that “[t]he identification of a mixed question when appealing an arbitration award defeats a court’s appellate review jurisdiction,” whereas in an appeal from a civil judgment it “merely raises the standard of review.”

Most commercial awards turn on the interpretation of a contract, and since Sattva that interpretation is a question of mixed fact and law. Rothstein J. held at ¶ 50 that “[c]ontractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix,” and at ¶ 55 that “the circumstances in which a question of law can be extricated from the interpretation process will be rare,” so that “[i]n the absence of a legal error of the type described above, no appeal lies under the AA from an arbitrator’s interpretation of a contract.” The types of legal error he described at ¶ 53 are “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor,” and he added that “many other issues in contract law do engage substantive rules of law: the requirements for the formation of the contract, the capacity of the parties, the requirement that certain contracts be evidenced in writing, and so on.” The Court of Appeal added two (2) more in Niagara Falls Shopping Centre Inc. v. LAF Canada Company, 2023 ONCA 159 at ¶ 24, stating that “[f]ailure to construe a contract as a whole and disregarding relevant provisions are also extricable errors of law.” Teal Cedar explained at ¶ 44 how an extricable error arises within the application of a test. Where “a party alleges that a judge (or arbitrator) while applying a legal test failed to consider a required element of that test, that party alleges that the judge (or arbitrator), in effect, deleted that element from the test and thus altered the legal test,” which “ultimately challenges whether the judge (or arbitrator) relied on the correct legal test, thus raising a question of law.” Such questions “are better understood as a covert form of legal question” than “as a fourth and distinct category of questions.”

The Supreme Court coupled that opening with a warning, which the Ontario courts have repeated in every decision since. Sattva held at ¶ 54 that “courts should be cautious in identifying extricable questions of law in disputes over contractual interpretation,” because “the applicant for leave and its counsel will seek to frame any alleged errors as questions of law,” and “[t]he legislature has sought to restrict such appeals.” Teal Cedar held at ¶ 45 that “[t]he motivations for counsel to strategically frame a mixed question as a legal question … are transparent,” and that “[c]ourts must be vigilant in distinguishing between a party alleging that a legal test may have been altered in the course of its application (an extricable question of law …), and a party alleging that a legal test, which was unaltered, should have, when applied, resulted in a different outcome (a mixed question).” In Tall Ships at ¶ 3, Harvison Young J.A. applied the warning to Ontario, stating that “judges exercising their appellate powers under s. 45 of the Arbitration Act should be cautious about extricating questions of law from the interpretation process,” and that “[f]ailing to exercise such caution will result in the very inefficiencies, delays and added expense that choosing an arbitral process seeks to avoid.” At ¶ 16 she added that the principle “is of particular importance when, as here, the impugned terms form a relatively small part of a large and complex arbitration decision.” In Rogers at ¶ 125, Leiper J. described the extricable error as one of the “rare and uncommon errors,” quoting Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20 at ¶ 28 and Corner Brook (City) v. Bailey, 2021 SCC 29 at ¶ 44, and held that a party’s disagreement with the arbitrator’s interpretation of the words “ancillary services” “does not amount to an extricable error of law.” Kimmel J.’s summary in Ontario Minister of Transportation v. Link 427 General Partnership, 2025 ONSC 2375 (“Link 427”) at ¶ 19, quoted in Place Laurier at ¶ 55, is the shortest statement of the test. “Extricable errors of law are about the decision-maker applying the wrong principle, not applying the right principle inappropriately. A legal question is only extricable if it can be considered without regard to the facts …. Once the decision-maker engages in the application of the correct principle, that becomes a question of mixed fact and law, from which there is no right of appeal.”

The decisions show where the line falls. In Tall Ships, the application judge had set aside three (3) awards on the basis of errors in the interpretation of a development agreement; the Court of Appeal held at ¶ 72 that the point “was not a question of law, but a question of mixed fact and law, which according to the parties’ Arbitration Agreement, was not subject to appeal,” and at ¶ 81 that “the arbitrator did precisely what he was asked to do: he interpreted the contract as a whole, within its relatively complex factual matrix of the agreements and relationships in play.” In D Lands, the alleged failure “to interpret the Lease in accordance with governing principles of contractual interpretation, and its failure to apply binding authority” were held at ¶ 64 to “give rise to extricable questions of law,” but the appeal failed on the merits because, as Dietrich J. found at ¶ 125, both the majority and the minority of the tribunal “identified and applied the rules of contractual interpretation as set out in Sattva” and “came to different conclusions when they applied the relevant rules of interpretation and the jurisprudence to the factual matrix.” In Place Laurier, the tenant argued that the arbitrator had omitted two (2) of the four (4) elements of the test for the “highest and best use” of land; Jensen J. accepted at ¶ 56 that the landlord’s complaint that the tenant had “dressed up” findings of fact “in legal clothing” was “partly true, but not entirely,” granted leave on the questions that could “be determined without regard for the facts,” and dismissed the appeal. In Sitzer, the arbitrator had found an “ad hoc fiduciary duty” and imposed a constructive trust over land that the co-tenancy agreement expressly excluded from its scope; Dunphy J. held at ¶ 15 that the ruling was “the product of an extricable errors of law in failing to give effect to the clear and unambiguous language employed by the parties,” and at ¶ 68 that elevating a prohibition into a positive object of the contract “ignores the clearly expressed objects of the Co-Tenancy and was an error of law.” In Tedescon, the arbitrator had found that the contractor’s suspension of work was both justified under the contract and a repudiation of it; Akazaki J. would have held at ¶ 24 that the arbitrator “failed to consider a required element of fundamental breach amounting to repudiation: that Tedescon had to have breached the agreement,” while holding at ¶ 68 that “the assessment of damages in a construction payment dispute is a, in substance, a question of fact incapable of forming grounds for appeal under s. 45(1).”

Two (2) further categories deserve mention. The first is the standard form contract. The Supreme Court held in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (“Ledcor”), that the interpretation of a standard form contract, where the interpretation has precedential value and the factual matrix is of little weight, is a question of law, and Akazaki J. applied that exception in Tedescon at ¶ 69 to the general conditions of “the provincial contract used for municipal procurement of public works contractors.” The party who relies on the exception must prove it; in Niagara Falls Shopping Centre at ¶¶ 20 to 23, the Court of Appeal rejected the characterization of a lease as a standard form contract where the tenant said only that “most of” its leases had similar terms “with only minor modifications.” The second is statutory interpretation, which Teal Cedar at ¶ 47 described as “normally characterized as a legal question,” and which arises in arbitrations under statutes such as the Condominium Act, 1998, S.O. 1998, c. 19, and the Insurance Act, R.S.O. 1990, c. I.8.

A complaint about the reasons is sometimes framed as a question of law, and the test for it is settled. Section 38(1) of the Act requires an award to “state the reasons on which it is based.” In Rogers at ¶ 108, Leiper J. held that the court asks “whether in the context of the record, the issues and the submissions of the parties, the judgment is sufficiently intelligible to show that the adjudicator understood the substance of the matter and addressed the necessary and critical issues,” and at ¶¶ 111 and 121 she rejected the complaint that an alternative argument was “not explicitly addressed in the reasons” because “the arbitrator was alive to the issue” and “understood the alternative argument and determined that it did not require further explication in her reasons.” In York Region at ¶ 41, Pollak J. adopted the statement in Remington Georgetown Inc. v. Tarion Warranty Corporation, 2025 ONSC 1285 at ¶¶ 37 to 40, that reasons “need not review each and every argument raised by the parties,” that “the adequacy or inadequacy of reasons is not generally a sufficient ground for quashing an otherwise valid decision,” and that “disagreement with the arbitrator’s conclusion is not a proper basis for setting aside the decision.” The exception is the award whose reasons do not show why the arbitrator reached the result on a disputed issue. In Jodie Calvert Wang Professional Corp. v. Takhar, 2019 ONSC 5535 (“Wang”) at ¶ 73, Edwards J. found on an appeal under s. 45 that “the reasons are not sufficient on the issue as to why Dr. Takhar is required to pay Dr. Wang the sum of $568,358.45 as those reasons do not show why the arbitrator reached that conclusion,” and remitted that issue to the arbitrator.

The standard of review

Once the court has a question of law before it, the question is how closely it reviews the arbitrator’s answer, and on that question the Ontario courts are divided. The division has a history. In Sattva at ¶ 106, the Supreme Court held that “[i]n the context of commercial arbitration, where appeals are restricted to questions of law, the standard of review will be reasonableness unless the question is one that would attract the correctness standard, such as constitutional questions or questions of law of central importance to the legal system as a whole and outside the adjudicator’s expertise.” Teal Cedar confirmed at ¶ 74 that in an arbitral appeal “the standard of review is ‘almost always’ reasonableness,” a preference that “dovetails with the key policy objectives of commercial arbitration, namely efficiency and finality.” The Court of Appeal applied that standard to an appeal under s. 45 in Ottawa (City) v. Coliseum Inc., 2016 ONCA 363 (“Coliseum”) at ¶ 31, stating that “[t]he standard of review on appeal from a commercial arbitration award will generally be reasonableness.”

Vavilov then held, at ¶ 37, that “where the legislature has provided for an appeal from an administrative decision to a court, a court hearing such an appeal is to apply appellate standards of review to the decision,” which under Housen v. Nikolaisen, 2002 SCC 33 (“Housen”) means correctness for questions of law and palpable and overriding error for questions of fact and mixed fact and law. Vavilov said nothing about Sattva or Teal Cedar. The Supreme Court had the chance to address the point in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 (“Wastech”), and the majority declined it. Kasirer J. wrote at ¶ 46 that he “would leave for another day consideration of the effect, if any, of Vavilov on the standard of review principles articulated in Sattva and Teal Cedar,” because “[o]n either standard, the arbitrator’s award cannot stand,” and that his silence “should not be understood as my agreeing with their view.” The view he referred to was that of Brown and Rowe JJ., Côté J. concurring, who wrote at ¶ 119 that “[a]ppellate standards of review apply as a matter of statutory interpretation” because, in the words of Vavilov at ¶ 39, “a legislative choice to enact a statutory right of appeal signals an intention to ascribe an appellate role to reviewing courts,” and at ¶ 120 that “where a statute provides for an ‘appeal’ from an arbitration award, the standards in Housen apply. To this extent, Vavilov has displaced the reasoning in Sattva and Teal Cedar.”

The Court of Appeal for Ontario has not decided the point for a commercial arbitration under the Act. In Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592 (“Ontario First Nations”), the appeal judge had applied reasonableness and the appellants argued for the appellate standard; Jamal J.A. held at ¶ 37 that “it is unnecessary in these appeals to address whether Vavilov changed the standard of review analysis in Sattva and Teal Cedar in an appeal from a commercial arbitration decision,” because the result was the same on either standard and because, as he explained at ¶ 40, the appellants “largely advance questions of contractual interpretation, which since Sattva it has been accepted are questions of mixed fact and law attracting a deferential standard of review.” Tall Ships, which the court had identified as a vehicle for the question, was decided on characterization without reaching it. In two (2) insurance arbitrations conducted under the Act, however, the court applied Vavilov. In Travelers Insurance Company of Canada v. CAA Insurance Company, 2020 ONCA 382 at ¶ 14, it held that “[b]ecause this is a statutory appeal that raises questions of law, including questions of statutory interpretation, the standard of correctness applies,” and in Continental Casualty at ¶¶ 46 to 48, Simmons J.A. agreed that “post-Vavilov, the standard of review to be applied in this case is the appellate standard,” noting that “[t]he arbitration in this matter was conducted pursuant to the Arbitration Act, 1991” and that ss. 45(2) and (3) “provide for an appeal on questions of law and mixed fact and law if permitted by the arbitration agreement.”

In the Superior Court, the judges have divided. One line holds that Sattva and Teal Cedar bind until the Supreme Court overrules them. Hainey J. so held in Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2020 ONSC 1516 at ¶¶ 64 to 72, distinguishing private arbitration from the arbitrations and appeals that a statute mandates, and the same conclusion was reached in Serbcan Inc. v. National Trust Co., 2022 ONSC 2644 at ¶¶ 10 to 17, Bergmanis v. Diamond, 2021 ONSC 2375 at ¶¶ 32 to 34, and Jewish Foundation of Greater Toronto v. Joseph Lebovic Charitable Foundation, 2025 ONSC 5068 at ¶¶ 121 and 122. The other line applies the appellate standard. Dietrich J. held in D Lands at ¶ 64 that the appeal “arises as a result of a right of appeal pursuant to the Arbitration Act, 1991” and that “the standard of review on these questions is correctness.” The same conclusion was reached in Burwell v. Wozniak, 2024 ONSC 5851 at ¶ 39, in Link 427 at ¶ 39, where Kimmel J. traced the reasonableness standard to the Dunsmuir framework that Vavilov replaced, in 1750738 Ontario Inc. c. 6888631 Canada Inc., 2025 ONCS 3145 at ¶ 25, in Bot Construction et al. v. Minister of Transportation, 2025 ONSC 6184, and in Place Laurier, where Jensen J. described at ¶ 41 “a growing consensus that the appellate standards of review apply to arbitral awards” and held at ¶ 43 that she was “bound by the principle of horizontal stare decisis” to follow the most recent decision on the point. The fullest review is Leiper J.’s in Rogers at ¶¶ 62 to 92, decided in April 2026. She noted at ¶ 74 that “[t]he question of standard of review in arbitral appeals has not been decided by the Court of Appeal for Ontario,” at ¶ 75 that the judges of the Superior Court “have diverged,” and at ¶ 89 that “there is a substantial body of case law on both sides of the issue,” and she concluded at ¶ 92 that she would “apply appellate standards to this appeal: correctness for questions of law, and palpable and overriding error for questions of mixed fact and law.”

The appellate courts of other provinces have divided in the same way. The Court of Appeal for the Northwest Territories held in Northland Utilities (NWT) Limited v. Hay River (Town of), 2021 NWTCA 1 at ¶ 44, that “the revised standard of review framework described in Vavilov applies to commercial arbitration decisions reviewed as a result of a right of appeal given by statute.” The British Columbia Court of Appeal reached the same conclusion in Vancouver School District No. 39 v. Kingsgate Property Ltd., 2026 BCCA 98, after reviewing the conflicting decisions across the country, as Leiper J. described at ¶¶ 84 to 86 of Rogers. The Manitoba Court of Appeal held the opposite in Buffalo Point First Nation v. Buffalo Point Cottage Owners Association Inc., 2025 MBCA 72 at ¶ 44, concluding, as Leiper J. described it in Rogers at ¶ 87, “that until the Supreme Court of Canada decisively overturned Sattva and Teal Cedar, those decisions remain good law,” and leave to appeal to the Supreme Court was sought in that case. Until the Supreme Court or the Court of Appeal for Ontario decides the question, a party appealing under s. 45 should argue both standards and should expect the Toronto judges, on the weight of the recent decisions, to apply correctness to a question of law.

The practical effect of the division is smaller than the volume of the case law suggests. On the interpretation of a contract, the arbitrator’s decision attracts deference on either view, because the question is one of mixed fact and law unless an extricable error of law is shown; Jamal J.A. made the point in Ontario First Nations at ¶ 42, stating that “[a]bsent an extricable error of law, such an exercise of contractual interpretation by a first-instance decision maker, whether a court or an arbitrator, attracts appellate deference,” and Leiper J. applied it in Rogers at ¶ 134, finding neither “any extricable legal error” nor “any palpable or overriding error on this question of mixed fact and law.” The standard matters where the question is one of law in the full sense; namely, the content of a legal test, the construction of a statute, or the existence of a duty, and there the difference between asking whether the arbitrator was right and asking whether the arbitrator was reasonable can decide the appeal. Where the agreement permits an appeal on questions of fact or mixed fact and law under s. 45(3), the court reviews those questions for palpable and overriding error, as it did in Rogers at ¶ 92 and in Continental Casualty at ¶ 49.

The appeal, the record and the remedies

The appeal is heard on the record of the arbitration. The award, the arbitration agreement and any procedural orders, the pleadings or statements of position, and the transcripts and exhibits that bear on the question are placed before the court in the application record, and the court decides the question of law on the facts as the arbitrator found them. Ground J. observed in Denison Leave at ¶ 5 that “[a]n appeal court can deal with questions of law taking the factual matrix as agreed by the parties or as found by the arbitrator.” Section 45(4) allows the court to “require the arbitral tribunal to explain any matter,” a power that is rarely exercised but that exists for the case in which the award leaves the basis of a decision on a question of law unclear.

What can be appealed is an “award.” The Act does not define the word, and the Court of Appeal held in Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642 (“Inforica”) at ¶ 29 that it “has been held to connote the judgment or order of an arbitral tribunal that ‘disposes of part or all of the dispute between the parties,’” so that an order for security for costs, which the arbitrator “aptly labelled” a “Procedural Order,” was not an award. Sharpe J.A. added at ¶ 18 that “[a] significant feature of the modern approach limiting access to the courts to review decisions of arbitrators is that there are no appeals from procedural or interlocutory orders,” and that this “is a deliberate policy, ‘not a lacuna in our law’, to protect the autonomy of the arbitral process.” A partial award that decides liability, or a final award on one of several questions, is an award, and was appealed as such in Rogers and in Sitzer. A ruling on jurisdiction made as a preliminary question is dealt with under s. 17(8) of the Act, which allows an application to the court within thirty (30) days, and s. 17(9) provides that “[t]here is no appeal from the court’s decision”; where the tribunal deals with jurisdiction in the award instead, the ruling is reviewed under ss. 45 and 46, as B. Davies J. explained in Toronto Standard Condominium Corp. No. 1466 v. Weinstein, 2021 ONSC 1306 at ¶ 12.

The remedies are in s. 45(5), which provides that “[t]he court may confirm, vary or set aside the award or may remit the award to the arbitral tribunal with the court’s opinion on the question of law, in the case of an appeal on a question of law, and give directions about the conduct of the arbitration.” The court will often decide the question and vary the award itself. In Sitzer at ¶ 114, Dunphy J. ordered that the award “be varied” and that the paragraphs finding the fiduciary duty and imposing the trust “be struck in accordance with s. 45(5) and s. 46(1) of the Act.” In Rogers at ¶ 122, Leiper J. recorded that counsel had asked her, if she found an error of law, to “decide the question of Rogers’ alternative argument in lieu of returning the matter to another arbitrator,” and said what her decision would have been. Where the question of law affects a finding that depends on the evidence, the court remits. In Place Laurier at ¶ 104, Jensen J. said that even if she had found an error she “would not have accepted PLL’s proposal to replace the Arbitrator’s conclusion regarding the value of the Land with the value proposed by PLL’s appraiser,” and that “[t]he most practical remedy if an error was found would be to send the matter back to the Arbitrator with directions.” In Wang at ¶ 98, Edwards J. remitted the issue on which the reasons were insufficient to the original arbitrator, holding that “[i]n the absence of any allegation of bias, procedural error or otherwise, the most efficient, cost-effective and fair solution to all is to remit this issue back to the original arbitrator.” The court may also remit to a new tribunal. In Victoria University (Board of Regents) v. GE Canada Real Estate Equity, 2016 ONCA 646 at ¶ 143, Pepall J.A. held that “nothing in s. 45(5), or in the Act read as a whole, requires the court to return the matter to the same arbitral tribunal,” that “it would be strange for an appeal scheme to omit provision for a power of remittal to a new panel,” and that “[w]hen contemplating whether to exercise such a power, the principles of efficiency, cost-effectiveness and fairness to the parties should all be considered.” At ¶ 142 she drew the distinction that organizes this article and its companion, stating that “[s]ection 45 is an appeal provision for addressing legally incorrect awards whereas s. 46 provides for applications to address awards tainted by procedural or jurisdictional irregularities.”

The thirty-day limit and enforcement in the meantime

Section 47(1) provides that “[a]n appeal of an award or an application to set aside an award shall be commenced within thirty days after the appellant or applicant receives the award, correction, explanation, change or statement of reasons on which the appeal or application is based,” and s. 47(2) that the subsection “does not apply if the appellant or applicant alleges corruption or fraud.” The period runs from receipt, and the application for leave must be issued within it; the leave application is the commencement of the appeal, and a party who waits for leave before counting the days has misread the section. The court cannot extend the period. In R & G Draper Farms (Keswick) Ltd. v. 1758691 Ontario Inc., 2014 ONCA 278 (“Draper Farms”) at ¶ 19, the Court of Appeal held that the Act does not “contemplate a judicial discretion to extend the s. 47 time period,” noting that “under s. 50(3) of the Act, an arbitral award becomes final within 30 days unless otherwise set aside or varied.” A request to the arbitrator under s. 44 to correct an error or make an additional award must itself be made “within thirty days after receiving the award,” and the correction or additional award, when received, starts a fresh period for an appeal based on it. A party who intends to appeal and also to ask for a correction should run both periods from the award and should not assume that the request suspends the first. The firm’s arbitration deadline calculator computes the thirty (30) days from the day the award was received, with the period for a correction request and the dates under s. 50 beside it, and applies the holiday rules of the Legislation Act, 2006 to each.

While the thirty (30) days run, and while an appeal is pending, the award is enforceable only with the court’s leave. Section 50(3) requires the court to give judgment enforcing an award made in Ontario unless “the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed” or “there is a pending appeal, application to set the award aside or application for a declaration of invalidity.” Section 50(5) provides that in either case “the court may, (a) enforce the award; or (b) order, on such conditions as are just, that enforcement of the award is stayed until the period has elapsed without such a proceeding being commenced, or until the pending proceeding is finally disposed of,” and s. 50(6) that where the court stays enforcement “it may give directions for the speedy disposition of the proceeding.” The winning party should therefore apply to enforce at once, and the appellant should expect to be asked for conditions, which may include terms as to payment or security, as the price of a stay. An appeal that is pending does not by itself prevent the court from enforcing the award.

The further appeal to the Court of Appeal

Section 49 provides that “[a]n appeal from the court’s decision in an appeal of an award, an application to set aside an award or an application for a declaration of invalidity may be made to the Court of Appeal, with leave of that court.” The motion for leave is brought under rule 61.03.1 of the Rules. It “shall be heard in writing, without the attendance of parties or lawyers” (subrule (1)); the notice of motion “shall be served within 15 days after the making of the order or decision from which leave to appeal is sought” (subrule (3)(a)); and the moving party’s factum must contain, among other things, “the specific questions that it is proposed the court should answer if leave to appeal is granted” (subrule (4), paragraph 3). The court does not ordinarily explain its decision. In Toronto Standard Condominium Corp. No. 1466 v. Weinstein, 2021 ONCA 470 at ¶ 4, the court stated that “[i]t is not the practice of this court to give reasons on motions for leave to appeal and we see no reason to depart from that practice here,” and at ¶ 1 it held that s. 49 applied to an appeal from a decision on an enforcement application and a late set-aside application, so that leave was required.

Where the Superior Court has decided an appeal, whether because it granted leave or because the agreement allowed the appeal as of right, s. 49 provides the route onward, and the Court of Appeal has heard such appeals in Coliseum, where it allowed the appeal and reinstated the award, in Ontario First Nations, where it dismissed the appeal, and in Victoria University. Where the Superior Court has refused leave, the road ends there. Zarnett J.A. explained the scheme in Baffinland at ¶ 22, stating that “[i]f the Superior Court has decided an appeal, either because leave to appeal was granted by the Superior Court or because there was an appeal to that court as of right, s. 49 of the Arbitration Act provides for a further appeal, with leave, to this court,” but that “the Arbitration Act does not provide for an appeal to this court from a refusal by the Superior Court to grant leave to appeal.” Doherty J.A. said the same in Optiva Inc. v. Tbaytel, 2022 ONCA 646 at ¶ 63, stating that “[t]he refusal to grant leave under s. 45 of the Act is, as a general rule, not appealable to this court,” and MacPherson J.A. in Coliseum at ¶¶ 27 to 29. The reason, given in Hillmond and in Denison 2001 at ¶ 7, is that “[i]t would be incongruous to attribute to the legislature an intention that there be appeals, as of right, from decisions on leave applications under s. 45(1) when no such appeal is provided for with respect to decisions on what may be called the main issue, the correctness of the arbitral decision.”

The exception is the judge who “mistakenly declines jurisdiction.” Morden J.A. traced it in Denison 2001 at ¶ 8 to the statement of Cartwright J. in Canadian Utilities Ltd. v. Deputy Minister of National Revenue, [1964] S.C.R. 57, that no appeal lies from a refusal of leave “provided that the tribunal has not mistakenly declined jurisdiction but has reached a decision on the merits of the application,” and applied it at ¶ 10 because “the parties did not argue the merits of the application before Macdonald J.,” having argued instead “whether or not Macdonald J. had jurisdiction to grant leave to appeal.” Baffinland at ¶ 25 applied the same exception to an application judge’s ruling that the arbitration agreement precluded appeals, so that the motion to quash was dismissed and the appeal was heard, and then dismissed on the merits because the ruling was right. Optiva at ¶ 63 put the exception in one sentence, stating that “[a] refusal to grant leave will be appealable if it reflects an erroneous declining of the jurisdiction given to the Superior Court judge to grant leave under s. 45.” A party who has lost a leave application on the merits of the leave test, as in Denison Leave, has no appeal; a party who has lost it on the construction of the clause, as in Baffinland, may have one.

International awards

None of this applies to an international commercial arbitration. The ICAA gives the force of law to the UNCITRAL Model Law on International Commercial Arbitration, which is Schedule 2 to the ICAA, and art. 34(1) of the Model Law provides that “[r]ecourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.” Article 5 provides that “[i]n matters governed by this Law, no court shall intervene except where so provided in this Law.” An award in an arbitration to which the ICAA applies therefore cannot be appealed on a question of law, or on any question, whatever the arbitration agreement says, and the parties’ only recourse is the set-aside application on the grounds in art. 34(2), within the three (3) months that art. 34(3) allows. Whether the domestic Act or the ICAA applies is decided by s. 2(1)(b) of the Act, which excludes an arbitration to which the ICAA applies, read with the Model Law’s definition of an international arbitration in art. 1(3), and the question can matter for the time limit as well as for the appeal, as it did in Draper Farms, where the applicant issued its application after thirty (30) days but within three (3) months and lost because the domestic Act applied. The set-aside regime under the Model Law is discussed in our article on setting aside an arbitral award in Ontario.

The arbitration clause

Because the right of appeal is the parties’ to give or withhold, the arbitration clause should say what they have decided, and the decisions in this article show the cost of saying it badly. A clause that says the award is “final and binding” excludes the appeal, and the parties should use those words only if that is what they want. The contractor in Tedescon lost a claim worth more than $1 million because its arbitration agreement used them, and Akazaki J. acknowledged at ¶ 40 that “[t]hat the error cannot be appealed will also seem unjust,” while holding at ¶ 60 that “[t]he unavailability of appeal is the outcome the parties implicitly covenanted to follow.” A clause that says the parties will be “bound” by the award, or that the award is “conclusive,” may or may not exclude the appeal, depending on the rest of the agreement and its context, as Diorite Securities, D Lands and Sitzer show, and should be avoided by a party who wants certainty either way. A clause that is silent leaves the appeal on a question of law with leave, and the leave application that follows is, as this article shows, a contest about characterization that the appellant usually loses.

A party who wants an appeal should say so in terms that track the statute. The clause in Rogers, which provided that “[a] party may appeal an award of the Arbitrator to the Ontario Superior Court of Justice on a question of law or a question of mixed fact and law,” engaged ss. 45(2) and (3) and removed the leave requirement. A clause that provides for an appeal “on a question of law” alone engages s. 45(2). A clause that provides for an appeal “on a question of fact, law or mixed fact and law” engages s. 45(3) and gives the broadest review the Act allows. Three (3) further matters deserve attention. The first is the institutional rules the clause adopts, because the rules may contain their own waiver of appeal, as the ICC Rules did in Baffinland, or may be silent, as the ICDR Rules were in D Lands at ¶ 50. The second is the interaction between the clause in the main agreement and any later agreement to arbitrate, terms of appointment or procedural order, since the later document may change the regime, as it did in Denison 2002 and York Region, and since a procedural order that merely refers to the existing agreements will not, as Dunphy J. held in Sitzer at ¶ 56. The third is a private appeal. Parties may provide for an appeal to a second arbitral tribunal, as the dealer arbitration rules did in Competition Motors Ltd. v. Toyota Canada Inc., 2023 ONSC 6388, and the Act’s regime then applies to the award of the appellate tribunal.

Practical considerations

The appeal is prepared during the arbitration. A party who may need one should put the legal test it relies on in writing in its submissions, so that an award which departs from it discloses an error that can be extricated, and should ask the tribunal for reasons on each disputed question of law, because an award that states the test and applies it to the facts leaves nothing to appeal. The party should keep the record that an appeal needs, which includes the pleadings or statements of position, every procedural order and agreement, the exhibits and the transcripts, since the court decides the question of law on the facts as found and the respondent will say, as the respondents said in Rogers and Place Laurier, that the complaint is a factual one in legal dress. Where the complaint is that the arbitrator decided something that was not submitted, or decided it on a theory that was not argued, the objection should be made at once and on the record, because that complaint belongs under s. 46 as much as under s. 45, as Sitzer shows, and the s. 46 ground is lost if the objection was not made.

When the award arrives, the thirty (30) days start. The first task is to read the arbitration clause, the agreement to arbitrate and every procedural order for the words that decide the regime, and to decide which of the four (4) positions the parties are in. The second is to state the question of law in a sentence, in the form the court must answer, and to test it against Teal Cedar at ¶ 45; namely, whether the complaint is that the arbitrator altered the test or that the arbitrator applied the right test and reached the wrong result. A notice of application that pleads the question in the first form, and pleads nothing in the second, has the strongest chance of leave; Jensen J. observed in Place Laurier at ¶ 48 that “a court must grant leave only when questions of law can be clearly perceived and delineated.” The third is to decide whether to add an application under s. 46 and, if so, to keep the two (2) routes distinct, because the court will dismiss a set-aside application that is “an attempt at a second kick at the can,” as Dietrich J. called the one in D Lands at ¶ 135, and Pattillo J. noted in Baffinland ONSC at ¶ 90 that a complaint about the tribunal’s reliance on a legal theory “more properly belongs” under s. 45. The fourth is the standard of review, on which the application should argue correctness and, in the alternative, unreasonableness, until the Court of Appeal settles the point. The respondent to a leave application should consider a cross-application, as the municipality brought in Tedescon, so that its own questions of law are before the court if leave is granted, and the winning party should apply to enforce under s. 50 without waiting for the appeal to be decided.

Costs follow the event. The appellant in Tall Ships paid $40,000 to the city on the appeal, and an application for leave that is refused ordinarily carries costs as well. The appeal is an expensive exercise in a process the parties chose for its finality, and the cases in which it has succeeded are those in which the award disregarded the words of the contract, as in Sitzer, or omitted an element of the legal test, as the court found in Tedescon, rather than those in which the arbitrator read the contract differently from the losing party.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract, lease and fraud disputes, and in the court proceedings that follow the award, including applications for leave to appeal and appeals under s. 45, applications to set aside or enforce an award under ss. 46 and 50, and motions for leave to appeal to the Court of Appeal under s. 49. The analysis in this article, from the words of the clause to the framing of the question of law, is the one we carry out with clients in the first days after an award is received, and the clause drafting it describes is part of the agreements we prepare. Our arbitration practice and our commercial litigation practice are described on the pages linked here. Our articles on setting aside an arbitral award in Ontario, on arbitrating a shareholder dispute in Ontario and on evidence in a commercial arbitration in Ontario deal with the other side of the award, the stay motion and the arbitrator’s remedial powers, and the law of evidence before the tribunal, and our page on commercial leases covers the rent arbitrations from which several of the appeals discussed here arose. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Whether an award can be appealed, and on what standard, depends on the arbitration agreement, the award and the record, and the authorities cited should be read in full before they are relied on.

The post Appealing an Arbitral Award in Ontario appeared first on Grigoras Law.

The Court of Appeal has said in a line of decisions since 2019 that the second route is not a substitute for the first. In Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254 (“Alectra”) at ¶ 27, Huscroft J.A. wrote that “Section 46(1)3 is not an alternate appeal route and must not be treated as such.” In Mensula Bancorp Inc. v. Halton Condominium Corporation No. 137, 2022 ONCA 769 (“Mensula”) at ¶ 5, Zarnett J.A. wrote that s. 46(1)3 “provides a narrow basis upon which a court may interfere with an arbitration award. It does not create a right of appeal, nor contemplate a review of the correctness or reasonableness of the arbitrator’s decision.” In Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 861 (“Tall Ships”) at ¶ 95, Harvison Young J.A. wrote that “s. 46 of the Arbitration Act cannot be used as a broad appeal route to bootstrap substantive arguments attacking an arbitrator’s findings which the parties had agreed would be immune from appeal.” In Campbell v. Toronto Standard Condominium Corporation No. 2600, 2024 ONCA 218 (“Campbell”) at ¶ 47, the court described those three (3) decisions as a “trilogy” that “has made clear that the grounds for setting aside an arbitral award listed in s. 46 are narrow and that s. 46 is not an alternate appeal route.” A party who reads the award as wrong and reaches for s. 46 must therefore begin with a different question; namely, whether something went wrong with the arbitrator’s authority or the fairness of the process, as opposed to the result.

This article sets out the law of setting aside under the Act as it applies to a commercial arbitration seated in Ontario. It covers the grounds in s. 46, the distinction between an appeal and an application to set aside, the jurisdiction ground, the fairness grounds, bias and fraud, the thirty-day limit, the application and its remedies, enforcement while the application is pending, and the parallel regime for international awards under the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5 (the “ICAA”). It does not deal with family arbitration awards, which have their own rules under paragraph 10 of s. 46(1) and the Family Law Act, R.S.O. 1990, c. F.3.

The grounds in section 46

Section 46(1) provides that “[o]n a party’s application, the court may set aside an award on any of the following grounds,” and then lists ten (10) of them; namely, (1) that “[a] party entered into the arbitration agreement while under a legal incapacity”; (2) that “[t]he arbitration agreement is invalid or has ceased to exist”; (3) that “[t]he award deals with a dispute that the arbitration agreement does not cover or contains a decision on a matter that is beyond the scope of the agreement”; (4) that “[t]he composition of the arbitral tribunal was not in accordance with the arbitration agreement or, if the agreement did not deal with that matter, was not in accordance with this Act”; (5) that “[t]he subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law”; (6) that “[t]he applicant was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator”; (7) that “[t]he procedures followed in the arbitration did not comply with this Act”; (8) that “[a]n arbitrator has committed a corrupt or fraudulent act or there is a reasonable apprehension of bias”; (9) that “[t]he award was obtained by fraud”; and (10) that “[t]he award is a family arbitration award that is not enforceable under the Family Law Act.” The Court of Appeal described the list in Campbell at ¶ 28 as “an exhaustive list of grounds on which a court may set aside an arbitral award,” and in Alectra at ¶ 24 as grounds that “are, in general, not concerned with the substance of the parties’ dispute. They concern issues such as the establishment and composition of the arbitration tribunal, compliance with Ontario law, and the requirements of procedural fairness.”

The rest of the section limits the remedy. Under s. 46(2), where the jurisdiction ground applies “and it is reasonable to separate the decisions on matters covered by the arbitration agreement from the impugned ones, the court shall set aside the impugned decisions and allow the others to stand.” Under s. 46(3), the court “shall not set aside an award” on the jurisdiction ground “if the party has agreed to the inclusion of the dispute or matter, waived the right to object to its inclusion or agreed that the arbitral tribunal has power to decide what disputes have been referred to it.” Under s. 46(4), the court shall not set aside an award for corruption, fraud or bias on the part of the arbitrator “if the party had an opportunity to challenge the arbitrator on those grounds under section 13 before the award was made and did not do so, or if those grounds were the subject of an unsuccessful challenge.” Under s. 46(5), the court shall not set aside an award “on a ground to which the applicant is deemed under section 4 to have waived the right to object,” and s. 4(1) deems a party who “participates in an arbitration despite being aware of non-compliance with a provision of this Act, except one mentioned in section 3, or with the arbitration agreement, and does not object to the non-compliance within the time limit provided or, if none is provided, within a reasonable time,” to have waived the right to object. Section 46(6) softens the waiver rules for jurisdiction, because where the ground “could have been raised as an objection to the arbitral tribunal’s jurisdiction to conduct the arbitration or as an objection that the arbitral tribunal was exceeding its authority, the court may set the award aside on that ground if it considers the applicant’s failure to make an objection in accordance with section 17 justified.” The last two (2) subsections supply the remedies. When the court sets aside an award, “it may remove the arbitral tribunal or an arbitrator and may give directions about the conduct of the arbitration” (s. 46(7)), and “[i]nstead of setting aside an award, the court may remit it to the arbitral tribunal and give directions about the conduct of the arbitration” (s. 46(8)).

Two (2) other provisions frame the section. Section 3 allows the parties to agree to vary or exclude any provision of the Act, with six (6) exceptions in a commercial arbitration, and s. 46 is one of them, as are s. 19 (equality and fairness), s. 39 (extension of the time for making an award), s. 48 (declaration of invalidity) and s. 50 (enforcement). An arbitration clause that says the award is final and that the parties will not appeal or seek to set it aside therefore excludes the appeal and leaves s. 46 untouched. The application in Campbell was heard on its merits although the parties had “irrevocably” agreed not to appeal or seek to set aside the award (¶ 16), and in Nasjjec Investments Ltd. v. Nuyork Investments Ltd., 2015 ONSC 4978 (“Nasjjec”) at ¶ 36, Pattillo J. held that the words “final and binding” in an arbitration clause do not preclude an application under s. 46, given ss. 3 and 19. Section 6, under the heading “Court intervention limited,” provides that “[n]o court shall intervene in matters governed by this Act, except for the following purposes, in accordance with this Act: 1. To assist the conducting of arbitrations. 2. To ensure that arbitrations are conducted in accordance with arbitration agreements. 3. To prevent unequal or unfair treatment of parties to arbitration agreements. 4. To enforce awards.” In Campbell at ¶¶ 35 and 37, the Court of Appeal described efficiency and finality as “central objectives which underpin the Act” and quoted s. 6 as an example of the way the Act gives effect to them, and the grounds in s. 46 track the four (4) purposes s. 6 lists.

An appeal and an application to set aside

The two (2) routes differ in what the court is asked to decide. On an appeal under s. 45, the court decides whether the arbitrator was right, within whatever limits the agreement sets, and it “may confirm, vary or set aside the award or may remit the award to the arbitral tribunal with the court’s opinion on the question of law” (s. 45(5)). On an application under s. 46, the court does not decide whether the arbitrator was right at all. It decides whether one of the ten (10) grounds is made out and, if so, whether to set the award aside, sever it or remit it. The court cannot vary the award on a s. 46 application, and an applicant who wants a different result on the merits needs an appeal.

Whether an appeal exists depends on the clause. Section 45(1) provides that “[i]f the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that, (a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and (b) determination of the question of law at issue will significantly affect the rights of the parties.” Sections 45(2) and (3) allow an appeal on a question of law, or on a question of fact or mixed fact and law, where “the arbitration agreement so provides.” A clause that makes the award “final and binding” removes the appeal. In Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245 (“Baffinland (C.A.)”) at ¶ 39, the Court of Appeal held that the words “finally settled” by arbitration have the same effect, because their ordinary meaning “clearly means no further recourse by way of appeal, in the same way as ‘final and binding’ would.” In Alectra at ¶ 22, the clause said the award was final and binding and the court observed that “[t]here is no ambiguity here: there is no appeal to the court, period.” Where the clause is silent, the appeal lies on a question of law with leave, and the Court of Appeal has warned repeatedly that a question of mixed fact and law, including the interpretation of the contract, is rarely a question of law. Tall Ships at ¶ 3 cautions that judges “should be cautious about extricating questions of law from the interpretation process,” because failing to do so “will result in the very inefficiencies, delays and added expense that choosing an arbitral process seeks to avoid.”

The temptation, when the appeal is unavailable, is to recast the complaint about the result as a complaint about jurisdiction or fairness. The Court of Appeal addressed that temptation directly in Tall Ships. The application judge had set aside three (3) awards on the basis that the arbitrator’s reasoning “hinged on a contractual interpretation that was neither advanced nor argued,” and the court held at ¶ 2 that “in characterizing the same arguments as breaches of procedural fairness falling under s. 46 of the Arbitration Act, the application judge effectively bootstrapped the substantive arguments.” The court added at ¶ 15 that “[t]he alleged breaches of procedural fairness depend on the substantive questions of whether the arbitrator fell into errors of law, which, in my view, he did not,” and at ¶ 95 that “[t]here was no material surprise or unfairness to Tall Ships.” In Campbell at ¶ 56, the court wrote that the case law “has also cautioned courts to be aware of strategic attempts by losing parties to expand the scope of review beyond what they had agreed to under the arbitration agreement,” and at ¶ 58 that an expanded reading of a ground “risks inviting strategic enlargement of the grounds for setting aside an arbitral award, as illustrated by this case.” The Superior Court applies the same test. In Middlesex Centre (Municipality) v. South Winds Development Co., 2026 ONSC 5113 (“Middlesex Centre”) at ¶ 23, Moser J. found that the applicant was “attempting to avoid the terms of the arbitration agreement” by asking the court “to decide a question of law and/or a question of law and fact,” and described the application as “an appeal disguised as a review of procedural fairness.”

The practical consequence is that the first task on receiving an adverse award is to read the clause and classify the complaint. A complaint that the arbitrator misread the contract, preferred the wrong evidence, miscalculated the damages or applied the wrong limitation period is an appeal point, and it fails under s. 46 however it is dressed. A complaint that the arbitrator decided something the parties never referred, shut a party out of the hearing on a point of importance, made the award without reasons, or sat in circumstances that would lead an informed observer to doubt his or her impartiality is a s. 46 point. Both can be raised in one application, as they were in Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2022 ONSC 1900 (“Baffinland”), aff’d 2023 ONCA 245, and in Sitzer Group Holdings No. 1 Ltd. v. Grall Corp., 2026 ONSC 2452 (“Sitzer”), where Dunphy J. granted leave to appeal on a question of law and set aside the same portions of the award under s. 46(1)3, noting at ¶ 12 that “[t]he result under either statutory provision is the same.”

Jurisdiction under paragraph 3

Paragraph 3 of s. 46(1) is the ground most often argued and most often misunderstood. It applies where “[t]he award deals with a dispute that the arbitration agreement does not cover or contains a decision on a matter that is beyond the scope of the agreement.” The question it asks is whether the arbitrator had authority to decide what he or she decided, and the Court of Appeal has held that the question “must be answered correctly.” In Smyth v. Perth and Smiths Falls District Hospital, 2008 ONCA 794 (“Smyth”) at ¶ 17, MacPherson J.A. wrote that “an arbitrator must address the issues, and only the issues, referred to him in the arbitration agreement,” and Alectra at ¶ 43 adopted that passage as holding that “s. 46(1)3 sets out a jurisdictional question that must be answered correctly. It neither requires nor authorizes review of the substance of an arbitrator’s award.”

The difficulty is that every arbitrator’s authority comes from an agreement, so every mistaken reading of the agreement can be described as an excess of authority. Alectra closed that door. The arbitrator there had awarded $12.3 million in damages for the unlawful termination of the parties’ agreement, and the application judge set the award aside on the basis that the arbitrator had exceeded his jurisdiction in awarding damages that, on the judge’s reading of the agreement, it did not permit. The Court of Appeal restored the award, holding at ¶ 39 that the application judge’s approach “fails to recognize the distinction between having jurisdiction to award damages and making an error in the exercise of that jurisdiction.” Huscroft J.A. wrote at ¶ 25 that “the court’s authority to set aside an arbitration award under that subsection depends on the mandate the arbitration agreement confers on the arbitrator to resolve a particular dispute,” and at ¶ 26 that “if an arbitration agreement provides that an arbitrator shall resolve a particular question and the arbitrator does so, the court has no authority to set aside the award on the basis that the arbitrator’s decision is unreasonable or incorrect.” The award may be set aside where, “in the course of resolving the particular question remitted the arbitrator asks and answers an additional second question,” because in that case “the arbitrator had no authority to reach any conclusion on the second question at all.” His Honour then addressed the argument that an unreasonable interpretation is itself a loss of jurisdiction, stating at ¶ 33 that on that approach “arbitration awards that are not subject to appeal would, nevertheless, be vulnerable to being set aside for jurisdictional error. In effect, arbitrators would have only the jurisdiction to make awards that are reasonable or correct,” and at ¶ 34 that “[t]his is not the law in Ontario.” The conclusion at ¶ 41 is the passage most often quoted since. “Once the application judge concluded that the arbitrator acted within the authority conferred upon him by the arbitration agreement, his task was at an end. It was for the arbitrator, not the court, to interpret and apply the substantive provisions of the PAMA, and it is of no moment whether the arbitrator did so reasonably or unreasonably, correctly or incorrectly. The decision was the arbitrator’s to make.” At ¶ 44 the court added that “once the jurisdictional question is answered, in the absence of a right of appeal pursuant to s. 45 the court has no authority to go on to review the arbitrator’s award for reasonableness,” and treated the contrary suggestion in Smyth as obiter.

Mensula applied the same rule to an application judge who had relabelled the arbitrator’s work. The arbitrator had interpreted a condominium declaration to decide a dispute about access to parking units. The application judge accepted that the issue was properly before him but held that he had “in effect” amended the declaration, because the result could not be reached by a proper interpretation. Zarnett J.A. held at ¶ 6 that “[w]hether he interpreted the declaration correctly or reasonably was irrelevant,” and at ¶ 48 that “[i]ssues such as whether or not the arbitrator gave effect to plain language, went beyond the text, properly reconciled inconsistencies, or used surrounding circumstances beyond their proper limits were matters that affected only the quality of his interpretation” and “did not result in a loss of jurisdiction.” The application judge’s approach, at ¶ 52, “confuses the correctness or reasonableness of the interpretive result with whether the arbitrator answered a question that was not remitted to him or dealt with a matter beyond the scope of the arbitration agreement. It equates an incorrect or unreasonable decision on a matter properly before the arbitrator with an exceeding of jurisdiction by deciding a different matter.”

The Superior Court has distilled those decisions into a working test. In Baffinland, Pattillo J. dismissed an application to set aside a $70 million award and held at ¶ 48 that “Section 46(1)3 deals with jurisdiction in its narrow sense, i.e., whether the arbitrator had the authority under the arbitration agreement to make the decision complained of,” and at ¶ 74 that the applicant’s arguments “are based on the legal errors made by the Majority. But that is not the test. The question is whether the Majority determined a dispute not covered by the arbitration agreement or on a matter beyond the scope of the arbitration agreement.” In Competition Motors Ltd. v. Toyota Canada Inc., 2023 ONSC 6388 (“Competition Motors”) at ¶ 41, Penny J. collected the principles and added that courts should be alert not to “brand as jurisdictional, and therefore subject to broader curial review, that which may be doubtfully so,” so that “if there is any room for uncertainty, a court ought to err against branding the issue as jurisdictional.” The complaint in that case, that an appeal panel under industry arbitration rules had misapplied its own standard of review, was held at ¶ 43 to be “a question of law, not a question of jurisdiction.” In Formenton v. Newport Sports Management Inc., 2026 ONSC 1373 at ¶ 21, Schabas J. dismissed a jurisdiction challenge to an award applying a six-month contractual limitation period, because “[t]he arbitrator decided that the dispute was arbitrable, which he clearly had the authority to determine.” In Mattamy (Downsview) Ltd. v. Urbancorp Downsview Park Development Inc., 2023 ONSC 3013 (“Mattamy”) at ¶ 45, Kimmel J. framed the inquiry as three (3) questions drawn from the Court of Appeal’s decision in Mexico v. Cargill, Incorporated, 2011 ONCA 622 (“Cargill”); namely, “a. What was the issue that the arbitral tribunal decided? b. Was that issue within the submission to arbitration? c. Is there anything in the arbitration agreement, properly interpreted, that precluded the tribunal from making the award?” The scope of the submission is read from the arbitration agreement, the request to arbitrate, the pleadings and the terms of appointment (Mattamy at ¶ 46), and Her Honour noted at ¶ 40 that “[a]n arbitrator does not have inherent jurisdiction. Rather, an arbitrator’s jurisdiction is derived exclusively from the authority conferred by the parties in their arbitration agreement and the terms of appointment of the arbitrator.”

The ground succeeds where the arbitrator answers a question nobody asked. Sitzer is a recent illustration. The claimants in a dispute over a Richmond Hill shopping plaza pleaded that the co-owners were partners and claimed a constructive trust over a parcel one side had acquired. The co-tenancy agreement expressly excluded a partnership, the arbitrator found that none existed, and he then found an “ad hoc” fiduciary duty that the claimants had first raised in their opening and awarded a fifty per cent interest in the parcel. Dunphy J. held at ¶ 16 that “[n]o other fiduciary duty was pleaded and the arbitrator had no jurisdiction to investigate, still less declare, the existence of any other non-pleaded fiduciary duty,” and that “[g]iving effect to such an unpleaded cause of action amounts to a reversible excess of jurisdiction under s. 46(1) of the Act.” His Honour observed at ¶ 89 that “[a]nswering a question not submitted amounts to an excess of jurisdiction under clause 3 of s. 46(1) of the Act. It may also be considered as a failure to accord fair treatment under clause 6 since the respondent in the arbitration prepared its case and assembled its evidence and made all of its tactical decisions on the basis of the case pleaded and not the alternative ground proposed in the claimant’s opening.” The portions of the award dealing with the unpleaded duty were struck and the rest of the award stood, which is the result s. 46(2) directs where the impugned decisions can reasonably be separated from the others.

The waiver rules in ss. 4, 17 and 46(3) decide many jurisdiction applications before the merits are reached. Section 17(1) lets the tribunal “rule on its own jurisdiction to conduct the arbitration,” and ss. 17(3) and (5) require a party who objects to the tribunal’s jurisdiction to make the objection “no later than the beginning of the hearing or, if there is no hearing, no later than the first occasion on which the party submits a statement to the tribunal,” and a party who objects that the tribunal “is exceeding its authority” to object “as soon as the matter alleged to be beyond the tribunal’s authority is raised during the arbitration.” If the tribunal rules on the objection as a preliminary question, s. 17(8) gives the objecting party thirty (30) days to apply to the court “to decide the matter,” and s. 17(9) provides that “[t]here is no appeal from the court’s decision.” If the tribunal deals with the objection in the award, the objection is pursued under s. 46. A party who never objects is caught by s. 46(3). In Baffinland at ¶ 39, Pattillo J. held that the three (3) limbs of s. 46(3) “are disjunctive, not conjunctive. The establishment of any one is sufficient to prevent the court from setting aside an award based on jurisdiction,” and at ¶ 45 that the applicant “cannot wait until release of the Majority Award to raise issues of jurisdiction it should have raised with the Tribunal from the very outset of the arbitration.” In Specialty Life Inc. v. Daumier Financial Services Inc., 2026 ONSC 5696 (“Specialty Life”) at ¶ 36, Cavanagh J. held that “[b]y defending SLI’s claim and advancing a counterclaim, and by participating in the Arbitration, Daumier consented to the jurisdiction of the Tribunal over the claims by SLI in the Notice of Arbitration and waived its right to object to the jurisdiction of the Tribunal.” In York Region Standard Condominium Corp. No. 1311 v. Star Woodworking Ltd., 2026 ONSC 2381 (“York Region”) at ¶ 28, Pollak J. held that an objection to “the existence or application of the Arbitration Agreement and the jurisdiction of the arbitrator, which includes the authority to make a final and binding decision with no appeal, must be raised before the Arbitrator at the beginning of the Arbitration,” and rejected an objection first raised in a reply affidavit sworn months after the award. The applicant in Sitzer succeeded because, as Dunphy J. found at ¶ 17, it “protested the lack of pleading of an Ad Hoc fiduciary duty immediately after the respondent first raised it with the arbitrator.”

Not every ruling that a party calls jurisdictional is one. In Optiva Inc. v. Tbaytel, 2022 ONCA 646 (“Optiva”), the arbitrator ruled that the claimant could proceed by summary judgment motion, and the question arose whether a challenge to that ruling was a jurisdictional objection that had to be taken to the court within thirty (30) days under s. 17(8). Applying Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642, Doherty J.A. held at ¶ 27 that “[t]he ruling on the availability of a summary judgment motion was a ruling on the procedure to be followed in the arbitration,” and at ¶ 28 that “the arbitrator’s decision to proceed by summary judgment was not a decision under s. 17(1) of the Act. Section 17(8) did not apply,” so that “Optiva’s application to set aside the arbitrator’s award was properly brought under s. 46 of the Act.” The words “jurisdiction to conduct the arbitration” in s. 17(1), as Inforica put it at ¶ 16, “connote jurisdiction over the entire substance or subject matter of the case, not jurisdiction to make interlocutory or procedural orders that do not determine the merits of the dispute and that are made along the way to final resolution of the issues.”

Unequal or unfair treatment and the procedures the Act requires

Paragraphs 6 and 7 of s. 46(1) enforce the Act’s two (2) procedural requirements. Section 19(1) provides that “[i]n an arbitration, the parties shall be treated equally and fairly,” and s. 19(2) that “[e]ach party shall be given an opportunity to present a case and to respond to the other parties’ cases.” Section 20(1) gives the tribunal the procedure, because “[t]he arbitral tribunal may determine the procedure to be followed in the arbitration, in accordance with this Act,” and s. 26(1) lets it “conduct the arbitration on the basis of documents or may hold hearings for the presentation of evidence and for oral argument; however, the tribunal shall hold a hearing if a party requests it.” Sections 26(3) and (4) require that anything a party gives the tribunal be communicated to the other parties and that the tribunal communicate “any expert reports or other documents on which it may rely in making a decision.” Section 38(1) requires that the award “state the reasons on which it is based.” Paragraph 6 is engaged where the applicant “was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator,” and paragraph 7 where “[t]he procedures followed in the arbitration did not comply with this Act.”

The content of the fairness requirement comes from the law of natural justice, read in the setting of a private process the parties chose. In Nasjjec at ¶ 38, Pattillo J. held that the obligation to treat the parties “equally and fairly” in ss. 19(1) and 46(1)6 “incorporates the requirements of natural justice and procedural fairness into arbitrations,” and that “[a]t a minimum, as provided by those sections, it includes the opportunity to present a case and respond to the other party’s case as well as the right to have notice of the arbitration and the appointment of the arbitrator.” His Honour quoted at ¶ 39 the statement in Hercus v. Hercus, [2001] O.J. No. 534 (S.C.J.) that “[a]rbitrators must listen fairly to both sides, give parties a fair opportunity to contradict or correct prejudicial statements, not receive evidence from one party behind the back of the other and ensure that the parties know the case they have to meet,” and then set the limit at ¶ 40, stating that “it is important to remember that an arbitration is a more informal process than a court proceeding. It is also usually final. In such circumstances, the issue of fairness and equality must be considered having regard to the context of the proceeding.” The Court of Appeal said the same in Optiva at ¶ 34, holding that arbitrations “must be conducted in accordance with the applicable terms of the arbitration agreement entered into by the parties, any rules or procedures applicable to the particular arbitration, and any relevant statutory provisions. The procedures must also treat the parties fairly and equally,” and at ¶ 29 that the parties’ “fashioning of their own rules governing the conduct of the arbitration and their selection of a mutually agreeable arbitrator implies a very limited role for judicial oversight of the conduct or outcome of that arbitration.”

The courts have been consistent about what the ground does not reach. Losing is not unfairness. In Nasjjec at ¶ 67, the submissions amounted “to no more than it saying the Arbitrator did not treat it equally or fairly because he found against it on the issues before him. Losing, by itself, does not equate to unfair or unequal treatment.” A discretionary procedural ruling is not unfairness. The refusal to admit fresh evidence on a decided issue “is a procedural decision. As such, it is immune from review under the Act” (Nasjjec at ¶ 130), the refusal of an adjournment to call further evidence that the party had every opportunity to call earlier was “not only reasonable in the circumstances, it was correct” (¶ 93), and the refusal, days before a peremptory hearing, to allow an amendment pleading negligent misrepresentation was upheld in Aquanta Group Inc. v. Lightbox Enterprises Ltd., 2023 ONSC 971 (“Aquanta”), where Akbarali J. wrote at ¶ 28 that “Section 46(1)(6) of the Arbitration Act, 1991 is not a do-over to protect a party from its own choices, but rather to protect a party from unfair or inequitable conduct by an arbitrator. Here, any limit on Aquanta’s ability to fully present the case it wanted to present was a result of its own decisions and actions.” The manner in which evidence is received is not unfairness. In Optiva at ¶ 48, “[w]hile under s. 26 a party has a right to make oral argument, that party has no right to present its evidence in a particular manner,” and at ¶ 50 the court found “no evidence that Optiva was denied the opportunity to present any evidence that it wanted to present before the arbitrator” and “no evidence that Optiva did not have a full and fair opportunity to challenge the case put forward by Tbaytel.” Questions from the tribunal are not unfairness. In Baffinland, Pattillo J. read the transcript excerpts in their entirety and found at ¶ 84 that the chair’s questions “were mainly for clarification of points raised by both the fact and expert witnesses in their evidence,” that “at no point during the hearing did counsel for BIM object to the President’s questioning,” and that questions during submissions “reflect concerns that the President had with respect to some of the positions being taken by the parties and should signal to counsel areas to be addressed.” A legal theory the parties could have addressed is not unfairness. In Optiva at ¶ 54, Doherty J.A. accepted “the proposition that a decision based on a legal theory a party had no opportunity to address in evidence or argument is a fundamentally unfair decision and cannot stand,” and then held at ¶ 59 that the authority the arbitrator relied on “was before the arbitrator,” so that “Optiva had a full opportunity to address anything of relevance” in it, because “[n]either the arbitrator, nor counsel were limited to reading only the paragraphs pinpointed by Tbaytel in written argument.” In Baffinland at ¶ 89, the tribunal’s questions to counsel before argument and an adjournment after it meant that the applicant “had an opportunity to address all issues raised by the Tribunal during argument.” In York Region at ¶¶ 34 and 40, the proceeding was fair because the applicants “were represented by an experienced litigation lawyer,” “[n]o objections relating to process were raised by the Appellants during the arbitration,” and they “had a fair opportunity to call and cross-examine opposing witnesses during the hearing.” In Middlesex Centre at ¶ 64, Moser J. held that a refusal of cross-examination is a breach only where it “interferes with the ability of a party to address key issues or essential elements of its case,” and at ¶ 75 that “[t]he Arbitrator had all the Municipality’s arguments before her. She made her decision. The Municipality was unsuccessful. The parties agreed to final and binding arbitration. There was no breach of procedural fairness.” The treatise literature puts the threshold in the same terms, collecting the holdings that “the applicant must demonstrate that the arbitrator’s conduct was sufficiently egregious to offend basic notions of morality and justice” (Fuego Digital Media Inc. v. DAC Group (Holdings) Ltd., 2018 ONSC 2897 at ¶ 23) and that “[i]f an arbitration is basically fair, courts should resist the temptation to plunge into detailed complaints about flaws in the arbitration process” (Mungo v. Saverino, [1995] O.J. No. 3021 (Gen. Div.) at ¶ 80).

The ground does succeed where the process, as opposed to the result, went wrong. Mattamy is the clearest recent example. The arbitrator raised a new issue at the hearing, invited further evidence and submissions on it, and then, at a case conference and without reasons, refused to admit excerpts from the CPA Handbook that the applicant tendered in response and that the other side did not oppose. Kimmel J. held at ¶ 59 that “[t]here is no question that the Arbitrator had the authority to determine the procedure and make rulings regarding the admissibility of the proposed evidence. However, that does not mean that the rulings he made did not result in a procedural unfairness. That entails a further inquiry as to whether a sufficient opportunity was afforded to Mattamy’s counsel to present their case and whether the procedure engaged to do so was thorough.” Her Honour found at ¶ 74 that the applicant “was not afforded a sufficient opportunity to present its case on the New Issue,” at ¶ 76 that the ruling “appears (in the absence of any reasons) to have been arbitrary and was unfair to Mattamy,” and at ¶ 89 that “[t]he issues in this case do not fall within any blanket category of procedural decisions of arbitrators that are immune from review.” The award was set aside and a new arbitration before a different arbitrator was ordered. Two (2) further points from that decision are important. The court does not ask whether the unfairness changed the result. Kimmel J. held at ¶ 80 that “where there is a finding of procedural unfairness, the Award must be set aside and the court should not engage in any assessment of whether the outcome would have been different if the procedural unfairness had not occurred,” and at ¶ 82 that the test “is whether evidence was sufficiently important that its exclusion at the time was a denial of natural justice” and “is not a test that is applied in hindsight based upon the eventual reasoning of the Award.” Penny J. restated the rule in Competition Motors at ¶ 63, holding that where the court finds a denial of natural justice, “any resulting award must be set aside,” even if the unfairness “would not have impacted the outcome,” and Cavanagh J. applied it in Specialty Life at ¶ 41. The court also distinguished, at ¶ 88, between “discrete procedural interim motions” such as the fresh evidence motion in Nasjjec or the security for costs motion in Inforica and “determinations such as were made in this case that resulted in a party not having been afforded a sufficient opportunity to present their case.” Middlesex Centre at ¶ 62 shows the line in operation. The municipality “is likening itself to Mattamy by asserting it was denied a meaningful opportunity to present its case,” but “[i]n Mattamy, the arbitrator unilaterally decided not to allow Mattamy to present evidence on a new issue despite the fact that the respondent was consenting to its admission. Here, the Municipality says denying it the right to cross-examine South Winds’ engineers is the same thing. It isn’t.” Other awards have been set aside under paragraph 6 where the arbitrator “never explains why the [applicant] lost” (Alberta Cricket Association v. Alberta Cricket Council, 2021 ONSC 8451 at ¶¶ 53-55 and 59) and where a party’s delay and non-participation were treated as a reason to proceed without affording it equal treatment, since “considerations of delay and non-participation cannot justify unfair and unequal treatment” (Spinney v. Fowlie, 2025 ONSC 2632 at ¶ 47).

The analysis under paragraph 6 proceeds without a standard of review in the usual sense. Pattillo J. held in Nasjjec at ¶ 41 that where a denial of natural justice is alleged, “the court must determine whether the applicant has been denied procedural fairness or natural justice. If the court determines that has occurred then any resulting award must be set aside,” and in Baffinland at ¶ 80 that the question “remains whether the requisite level of procedural fairness has been afforded BIM, having regard to the proceeding is an arbitration agreed to by the Parties where both Parties are sophisticated and had legal representation throughout.” Several judges have measured that level by the factors in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, including the nature of the decision, the statutory scheme, the importance of the decision to the parties, their legitimate expectations and the tribunal’s own choice of procedure (York Region at ¶ 33; Middlesex Centre at ¶ 33), and Moser J. added at ¶ 34 that “the court must be cautious and not dictate what it considers the optimal procedure among many options that satisfy the duty of fairness.”

Paragraph 7 is argued less often and succeeds less often. It catches a procedure that departs from a provision of the Act that still applied to the arbitration, and the decisions in which it has succeeded involve an award with no reasons at all, contrary to s. 38(1) (Kalatzis v. Daniels, [2002] O.J. No. 5928 (S.C.J.) at ¶ 8; Peters v. D’Antonio, 2016 ONSC 7141 at ¶¶ 37-39), and a tribunal that refused to hold a hearing on jurisdictional objections, contrary to s. 26(1) (Kitchener (City) v. G.M. Gest Group Ltd., [2003] O.J. No. 4038 (S.C.J.) at ¶¶ 65 and 70). Because s. 20(1) gives the tribunal the procedure and s. 3 lets the parties vary most of the Act’s provisions by agreement, the ground requires the applicant to identify the provision that was breached and show that it still applied, and the Superior Court has held that compliance is reviewed “on a reasonableness standard” rather than correctness (Freedman v. Freedman Holdings Inc., 2020 ONSC 2692 (“Freedman”) at ¶ 138). Optiva at ¶ 41 put the two (2) grounds together, holding that where the parties had given the arbitrator the power to interpret the agreement and to decide the procedure, “the court could set aside the arbitration award based on the arbitrator’s interpretation of the agreement only if satisfied that Optiva was not treated ‘equally and fairly’, or that the procedure followed ‘did not comply’ with the Act: Arbitration Act, ss. 46(1)6-7.”

Insufficient reasons sit between the two (2) grounds. The reasons must let the parties and the reviewing court understand why the arbitrator decided as he or she did, but they need not answer every argument. In York Region at ¶ 41, Pollak J. held, following Remington Georgetown Inc. v. Tarion Warranty Corporation, 2025 ONSC 1285 at ¶¶ 37-40, that an arbitrator’s reasons “must provide a logical and transparent basis for the decision, but need not review every detail of the hearing,” and quoted the observation in that case that “[i]t is apparent that it is the conclusion, and not the reasons, that the Applicant dislikes. But as already explained, disagreement with the arbitrator’s conclusion is not a proper basis for setting aside the decision.” In Aquanta at ¶ 24, the arbitrator “did not cite chapter and verse of the evidence that would not be before him,” but “[h]is reasons are sufficient to permit review by this court.”

Bias, corruption and fraud

Paragraph 8 of s. 46(1) applies where “[a]n arbitrator has committed a corrupt or fraudulent act or there is a reasonable apprehension of bias,” and paragraph 9 where “[t]he award was obtained by fraud.” The Act also provides a route for raising bias during the arbitration, and s. 46(4) makes that route mandatory where it was available. Under s. 13(1), a party may challenge an arbitrator on the ground that “[c]ircumstances exist that may give rise to a reasonable apprehension of bias,” and under s. 13(3) the challenging party “shall send the arbitral tribunal a statement of the grounds for the challenge, within fifteen days of becoming aware of them.” The tribunal, including the challenged arbitrator, decides the challenge (s. 13(5)), and “[w]ithin ten days of being notified of the arbitral tribunal’s decision, a party may make an application to the court to decide the issue and, in the case of the challenging party, to remove the arbitrator” (s. 13(6)). A party who appointed the arbitrator may challenge “only for grounds of which the party was unaware at the time of the appointment” (s. 13(2)). Section 46(4) then provides that the court shall not set aside the award for bias “if the party had an opportunity to challenge the arbitrator on those grounds under section 13 before the award was made and did not do so, or if those grounds were the subject of an unsuccessful challenge.” Dhaliwal v. Richter International Ltd., 2025 ONCA 522, was an appeal from the dismissal of an application under s. 13 to remove an arbitrator. The arbitrator had dismissed the challenge as filed “well outside of the 15-day time limit prescribed by s. 13(3)” and, in any event, as unfounded (¶ 4), and the Court of Appeal, deciding the merits, held at ¶ 8 that “[s]imply being involved in a separate arbitration with one party’s lawyer is not, on its own,” a circumstance giving rise to a reasonable apprehension of bias, observing that “it is not uncommon for lawyers to select arbitrators for the very reason that they have worked with those arbitrators before,” and at ¶ 9 that an adverse credibility finding “does not, on its own, give rise to a reasonable apprehension of bias, let alone actual bias.”

The test for a reasonable apprehension of bias is the one the Supreme Court of Canada stated in Committee for Justice and Liberty v. National Energy Board, [1978] 1 S.C.R. 369; namely, whether an informed person, viewing the matter realistically and practically and having thought the matter through, would think it more likely than not that the decision maker, whether consciously or unconsciously, would not decide fairly. The Court of Appeal applied that test to arbitrators in Aroma Franchise Company, Inc. v. Aroma Espresso Bar Canada Inc., 2024 ONCA 839 (“Aroma”), an international case under the ICAA, and noted at footnote 9 that s. 46(1)8 of the domestic Act “specifically provides that an arbitral award may be set aside if” a reasonable apprehension of bias exists. Four (4) propositions from Aroma govern the ground. The test is objective and “is to be applied against the backdrop of a strong presumption of impartiality” (¶ 133), a presumption that, in the words of Mew J. in Jacob Securities Inc. v. Typhoon Capital B.V., 2016 ONSC 604 at ¶ 40, which Zarnett J.A. adopted at ¶ 135, “is equally applicable to arbitrators whose function is in the nature of judicial determination,” because, as His Honour explained at ¶ 137, “[i]t would undermine the integrity of this legislatively endorsed system of dispute resolution, as well as confidence in the finality of the results coming out of it, to hold there to be no presumption that those results were reached by an impartial decision-maker.” The inquiry “is context sensitive and fact specific” (¶ 138). “The subjective views of the parties are not relevant” (¶ 139), so an application judge who treated the parties’ unshared expectations about disclosure as determinative “ended up treating the subjective views not only as relevant, but determinative. The result was to change the test. This is an error of law” (¶ 142). A breach of the duty to disclose “is a relevant, but not determinative, factor in deciding whether a reasonable apprehension of bias has been shown” (¶ 122), and where the undisclosed circumstance is not one that objectively required disclosure, “it is hard to envisage how it could give rise to a reasonable apprehension of bias” (¶ 125). On the facts, the arbitrator’s acceptance of a second, unrelated arbitration from the law firm acting for one party, without disclosure, did not displace the presumption (¶ 14). The Superior Court has applied the same test under the domestic Act. In Nasjjec at ¶ 171, the arbitrator’s release of reasons on a jurisdiction motion before hearing oral argument did not create a reasonable apprehension of bias, because “[t]he decision maker is required, despite any preliminary views, to keep an open mind until all submissions are received,” and at ¶ 173 comments on a party’s conduct in a costs award “were in direct response to submissions” and “were not gratuitous.” In Specialty Life at ¶¶ 70 and 75, the tribunal’s interventions in the cross-examinations on a stay motion fell short of the test.

Where the test is met, the award cannot be saved by weighing the breach, as the Court of Appeal held in Vento Motorcycles, Inc. v. Mexico, 2025 ONCA 82 (“Vento”), another ICAA case whose reasoning on bias is general. The application judge had found that Mexico’s nominee to a three-member tribunal was subject to a reasonable apprehension of bias, because Mexico’s lead counsel had offered him appointments to arbitration rosters during the arbitration, but declined to set aside the award at the remedial stage having regard to the likely effect of the bias on the result and the cost and inconvenience of a rehearing. The Court of Appeal set the award aside. Huscroft J.A. wrote at ¶ 28 that a reasonable apprehension of bias “is no minor procedural defect. A reasonable apprehension of bias means that it is objectively reasonable to think an adjudicator would not decide a dispute fairly. It is a finding that undermines the integrity and legitimacy of the adjudicative process,” at ¶ 42 that it “cannot be balanced away on the basis that it is not serious; that it is thought to have had little impact on the result; or that it would be inconvenient and costly to rehear the arbitration if the award were set aside,” and at ¶ 46 that “the bias of one member taints the tribunal,” because “[t]he parties to an arbitration are entitled to an independent and impartial tribunal, not simply the decision of a quorum of panel members who are unbiased.” His Honour also confirmed at ¶ 66 that “[a]rbitrators are neither representatives of the party who appointed them nor required to protect and promote that party’s interests,” and at ¶ 33 that a court “may refuse to entertain an allegation of bias if, for example, the applicant for relief has not acted conscientiously by raising the bias allegation at the earliest opportunity,” which is the common law counterpart of ss. 13(3) and 46(4).

Fraud means actual fraud. Campbell decided the point. The respondents had agreed to arbitrate the costs of a condominium dispute and, after an award of $30,641.72, applied outside the thirty (30) days to set it aside for fraud and “constructive fraud,” on the basis that the arbitration had decided substantive issues beyond costs. The application judge found no actual fraud but set the award aside for constructive fraud. The Court of Appeal restored the award. Harvison Young J.A. held at ¶ 53 that the word “fraud” has the same meaning in ss. 46(1)9 and 47(2), at ¶ 54 that “had the Legislature intended to extend the meaning of ‘fraud’ to include the different and broader concept of ‘constructive fraud’ one would have expected it to do so explicitly,” at ¶ 57 that “[u]nlike civil fraud, actual dishonesty or intent to deceive is not required to establish constructive fraud,” and at ¶ 58 that “[e]xpanding the meaning of ‘fraud’ also risks inviting strategic enlargement of the grounds for setting aside an arbitral award, as illustrated by this case.” At ¶ 60, “it was not open to the respondents to argue that the arbitrator had erred, or wrongly or even unfairly interpreted the terms of the agreement in seeking to have the award set aside under s. 46(1)9.” Corruption likewise “requires evidence of dishonesty” (¶ 49). The Superior Court’s statement of the elements in Toronto Standard Condominium Corporation No. 1466 v. Weinstein, 2021 ONSC 1306 (“Weinstein”) at ¶ 22, which Campbell cited with approval, is that “[a]n arbitral award will not be set aside on the grounds of fraud or corruption without clear evidence. Fraud requires proof that a false statement was made during the arbitration process and that the person making the false statement knew it was false, or was reckless or careless about its truth. Corruption requires proof of dishonesty or an abuse of power on the part of the arbitrator for personal gain.” Davies J. added at ¶ 37 that “[t]he fact that the arbitrator ruled against Mr. Weinstein’s preliminary objections is not evidence of bias, corruption or fraud.”

The thirty-day limit

Section 47(1) provides that “[a]n appeal of an award or an application to set aside an award shall be commenced within thirty days after the appellant or applicant receives the award, correction, explanation, change or statement of reasons on which the appeal or application is based,” and s. 47(2) that “[s]ubsection (1) does not apply if the appellant or applicant alleges corruption or fraud.” The period runs from receipt, and it runs from receipt of the document on which the application is based, so a correction under s. 44(1), an additional award under s. 44(2) or reasons delivered after the award starts a fresh period for an application based on that document. A request under s. 44 must itself be made “within thirty days after receiving the award,” and a party who intends to ask the arbitrator to correct an oversight and to apply to the court if the request fails should make the request at once and calendar both periods.

The court cannot extend the period. In R & G Draper Farms (Keswick) Ltd. v. 1758691 Ontario Inc., 2014 ONCA 278 (“Draper Farms”), the applicant issued its application after thirty (30) days but within the three (3) months the ICAA would have allowed, argued that the ICAA applied, and asked in the alternative for an extension. The Court of Appeal held that the domestic Act applied to the arbitration, and at ¶ 19 that “the Act [does not] contemplate a judicial discretion to extend the s. 47 time period. Under s. 37 of the Act, an arbitral award binds the parties to the arbitration unless set aside or varied under s. 45 or 46 of the Act. Further, under s. 50(3) of the Act, an arbitral award becomes final within 30 days unless otherwise set aside or varied. The Act makes no express provision for the extension of the 30-day time period under s. 47. And s. 50(3) is inconsistent with the notion of a residual discretion to extend the 30-day time period.” At ¶ 20 the court noted that the Act does provide for the relaxation of some time periods, such as the time for making an award under s. 39, “[h]owever, no such provision exists under the Act in respect of the s. 47 time period.” Campbell confirmed the rule at ¶ 48, stating that “[t]his court has affirmed that there is no judicial discretion to extend the 30-day time limit,” and that the rule “is not only consistent with the wording of the statute, but also with the principles of efficiency and finality.”

The exception for corruption or fraud is read with the holding that fraud means actual fraud. A party cannot plead fraud to reopen the period. In Campbell at ¶ 59, the court noted that had the respondents applied within thirty (30) days, their complaints “might have fallen within some of the other grounds enumerated in s. 46 for setting aside an award, such as the invalidity of the agreement, as set out in s. 46(1)2, or procedural unfairness, as set out in s. 46(1)6,” but “[t]hose routes were no longer open to the respondents after the expiration of 30 days by the express terms of ss. 46 and 47,” and at ¶ 60 that “the respondents sought to circumvent the time limit by alleging fraud and constructive fraud.” In Weinstein at ¶ 26, Davies J. held that “[i]t is not sufficient for Mr. Weinstein to simply allege there was corruption or fraud to avoid the 30-day limit for commencing an application to set aside an arbitral award,” quoting the earlier holding in Calabrese v. Weekes, 2003 CanLII 3311 (Ont. S.C.J.) at ¶ 22 that it would be “contrary to the purpose of the legislation to have a party avoid the thirty day period by making a mere allegation of corruption or fraud.” The jurisdiction and bias grounds in that case were held to be out of time at ¶¶ 14 and 19, and the court noted at ¶ 12 that a ruling on jurisdiction made as a preliminary question must be challenged under s. 17(8) within thirty (30) days of the ruling, while a ruling on jurisdiction made in the award is challenged by an appeal under s. 45 or an application under s. 46.

The application, the record and the remedies

An application to set aside an award is brought in the Superior Court of Justice, which s. 1 of the Act defines as the “court” for the purpose of s. 46, by notice of application, and it is commonly heard on the Commercial List in Toronto where the arbitration was commercial. Unlike an appeal under s. 45(1), the application requires no leave. It is frequently met with a cross-application to enforce the award under s. 50, as in Nasjjec, Aquanta and Specialty Life, and the two (2) are heard together.

The record depends on the ground. On jurisdiction, the court reads the arbitration agreement, the request to arbitrate, the pleadings, the terms of appointment and the award, and answers the question itself. In an international case, Russian Federation v. Luxtona Limited, 2023 ONCA 393 at ¶ 40, the Court of Appeal held that “an application to set aside an arbitral award for lack of jurisdiction is a proceeding de novo, not a review of or appeal from the tribunal’s decision,” so that the court “is not limited to the record that was before the tribunal,” with the caveat at ¶ 42 that where a party “has participated fully in the arbitration, its failure to raise a piece of evidence before the tribunal may be relevant as to the weight the court should assign that evidence.” On fairness and bias, the record is the procedural history, and the applicant must put it before the court. The application in Baffinland was decided on the transcript excerpts the parties filed, and the application in Mattamy on the correspondence and case conference record surrounding the excluded evidence. An applicant who alleges that it was denied the chance to call a witness or answer a point must show from the record that it asked and was refused, because the cases turn on what was requested and objected to at the time. In Middlesex Centre at ¶ 74, the municipality “did not appear on October 3 requesting an adjournment. They did not seek a future date to file or call further evidence,” and in York Region at ¶ 34, “[n]o objections relating to process were raised by the Appellants during the arbitration or they were dealt with in favour of the Appellants.” The applicant in Nasjjec “had the opportunity to respond with its own expert but chose not to” (¶ 92), and the applicant in Specialty Life was unrepresented at its stay motion as a result of “its decision not to seek access to frozen funds to pay for legal representation for the arbitration” (¶ 51).

The remedies are those in s. 46. The court may set the award aside, in whole or in part. Severance is mandatory under s. 46(2) where the jurisdiction ground applies to part of the award and separation is reasonable, as in Sitzer, and the Superior Court has held that partial relief is available under paragraphs 6 and 7 as well (Freedman at ¶¶ 246 and 252). The court may remove the arbitrator and give directions under s. 46(7), as Kimmel J. did in Mattamy at ¶ 97 by directing the parties “to submit their Consulting Fees Dispute to arbitration before a new arbitrator to be agreed upon, or, failing agreement, to be appointed by the court.” The court may remit the award to the tribunal with directions under s. 46(8) instead of setting it aside, which is the usual course where the defect is a gap in the reasons or a claim left undecided and the arbitrator can still address it (Freedman at ¶¶ 338 and 350; Parrish and Heimbecker Ltd. v. Canadian National Railway Co., 2016 ONSC 6916 at ¶¶ 87-88), and the choice between the same arbitrator and a new one turns on “principles of efficiency, cost-effectiveness and fairness to the parties” (Jodie Calvert Wang Professional Corp. v. Takhar, 2019 ONSC 5535 at ¶ 86, applying Victoria University (Board of Regents) v. GE Canada Real Estate Equity, 2016 ONCA 646 at ¶ 143). The court may not vary the award under s. 46 (Freedman at ¶ 254; Basandhi v. Patel, 2016 ONSC 7556 at ¶¶ 11-12). If the award is set aside, s. 52(2) allows the court to order “that the period from the commencement of the arbitration to the date of the order shall be excluded from the computation of the time within which an action may be brought on a cause of action that was a claim in the arbitration,” which protects the claimant against the limitation period while a new arbitration is constituted. Costs follow the result in the usual way. Pattillo J. awarded partial indemnity costs against the unsuccessful applicant in Nasjjec at ¶ 187, because “it was entitled to bring them” and “has cooperated in bringing matters forward expeditiously,” and the Court of Appeal awarded costs of the appeal to the successful parties in the decisions discussed above.

A further appeal lies to the Court of Appeal only with leave of that court. Section 49 provides that “[a]n appeal from the court’s decision in an appeal of an award, an application to set aside an award or an application for a declaration of invalidity may be made to the Court of Appeal, with leave of that court.” The domestic decisions of the Court of Appeal discussed in this article reached that court by that route, and leave was refused on the s. 46 aspect of Baffinland (Baffinland (C.A.) at footnote 2). A refusal of leave to appeal an award under s. 45 is a different matter, because the Court of Appeal has held that it is generally not appealable at all unless the application judge mistakenly declined jurisdiction to consider whether leave was warranted (Optiva at ¶ 63; Baffinland (C.A.) at ¶¶ 22 and 25).

Enforcement while the application is pending

Section 50(1) allows “[a] person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada” to apply to the court for judgment, and s. 50(3) provides that “[t]he court shall give a judgment enforcing an award made in Ontario unless, (a) the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed; (b) there is a pending appeal, application to set the award aside or application for a declaration of invalidity; (c) the award has been set aside or the arbitration is the subject of a declaration of invalidity; or (d) the award is a family arbitration award.” The exception is not a stay. Section 50(5) provides that where the period has not elapsed or an application is pending, “the court may, (a) enforce the award; or (b) order, on such conditions as are just, that enforcement of the award is stayed until the period has elapsed without such a proceeding being commenced, or until the pending proceeding is finally disposed of,” and s. 50(6) lets the court give “directions for the speedy disposition” of the pending proceeding where it stays enforcement. A set-aside application therefore does not suspend the award of its own force, and a respondent to an enforcement application that wants time must ask for a stay on terms, which may include payment into court or security. Once the application fails, judgment follows. Davies J. held in Weinstein at ¶ 39 that having dismissed the set-aside application, “I am required to grant a judgment enforcing the arbitral award,” and Cavanagh J. granted enforcement in Specialty Life at ¶ 87 for the same reason.

The enforcement provisions also show why the thirty-day limit is strict. Draper Farms at ¶ 19 reasoned from s. 50(3) that “an arbitral award becomes final within 30 days unless otherwise set aside or varied,” so that a discretion to extend the period for applying would contradict the enforcement scheme. An application to enforce may be commenced at any time until the later of December 31, 2018 and the tenth anniversary of the day the award was received or, if an application to set aside was commenced, the date on which it was finally determined (s. 52(3)).

International awards

Where the arbitration is international within the meaning of the ICAA, the domestic Act does not apply (s. 2(1)(b)), and Draper Farms at ¶ 14 confirms that “the application of that statute and the ICAA are mutually exclusive.” The ICAA gives the force of law to the UNCITRAL Model Law, and the equivalent of s. 46 is article 34. Article 34(1) provides that “[r]ecourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article,” and article 34(2) provides that an award “may be set aside by the court specified in article 6 only if” the applicant proves incapacity or invalidity of the agreement, want of proper notice or an inability to present its case, an award beyond the scope of the submission, or a composition of the tribunal or arbitral procedure not in accordance with the parties’ agreement, or the court finds that the subject matter is not arbitrable or the award conflicts with the public policy of Ontario. The time limit under article 34(3) is three (3) months “from the date on which the party making that application had received the award,” and the court under article 6 is the Superior Court of Justice. The grounds track s. 46 closely, which is why the Court of Appeal’s international decisions on jurisdiction (Cargill and Luxtona), on fair hearing breaches (Popack v. Lipszyc, 2016 ONCA 135 (“Popack”), discussed below, and Vento) and on bias (Aroma and Vento) are cited in applications under the domestic Act.

One difference deserves mention. Article 34(2) says the award “may” be set aside, and the Court of Appeal held in Popack that the word confers a discretion whose scope “is significantly affected by the ground upon which the award could be set aside” (¶ 30). For a fair hearing breach, the court weighs “the extent that the breach undermines the fairness or the appearance of the fairness of the arbitration and the effect of the breach on the award itself” (¶ 31), including the seriousness of the breach, its potential impact on the result, the prejudice of redoing the arbitration, and the complaining party’s conduct after it learned of the breach (¶¶ 24 and 36), and “the essential question remains the same” whatever label is placed on the error; namely, “what did the procedural error do to the reliability of the result, or to the fairness, or the appearance of the fairness of the process?” (¶ 45). The panel in Popack had met ex parte with the arbitrator from an earlier attempted arbitration between the parties, and the award stood because the applicant’s conduct after learning of the meeting “strongly suggests a tactical decision whereby Mr. Popack was content to allow the panel to finish its adjudication and make its award despite the improper ex parte meeting,” so that “[t]o reward that tactic by setting aside the award would eviscerate the finality principle that drives judicial review of arbitral awards” (¶ 39). Vento at ¶¶ 37-41 described the Popack balancing as the Canadian approach to fair hearing breaches in commercial arbitration while holding that a reasonable apprehension of bias cannot be balanced away. Section 46(1) also says the court “may” set aside an award, and the two (2) approaches now sit side by side in the domestic cases. In Specialty Life, Cavanagh J. held at ¶ 41 that a denial of natural justice requires that the award be set aside “even if the procedural fairness would not have impacted the outcome,” and at ¶¶ 67 and 70, applying Vento, that interventions by the tribunal which “do not undermine the fairness or appearance of fairness of the arbitration” do not warrant setting aside. The reconciliation is that the balancing goes to whether the irregularity amounts to a denial of a fair hearing at all, and once the court finds that it does, the award must be set aside without any inquiry into whether the result would have been different (Mattamy at ¶ 80; Competition Motors at ¶ 63). The applicant’s own conduct is addressed through ss. 4 and 46(5), through the requirement that objections be made at the time, and through the holding in Aquanta that the ground “is not a do-over to protect a party from its own choices.”

Practical considerations

The application to set aside is won or lost during the arbitration, and the party who expects to need it must build the record then. Every objection to the tribunal’s jurisdiction, or to a claim or theory that strays beyond the pleadings, should be made in writing at the time the point arises, because ss. 17(3) and (5) require it, s. 46(3) bars the ground where it was not made, and the applicant in Sitzer succeeded only because it objected “immediately.” A party who learns of circumstances suggesting bias has fifteen (15) days under s. 13(3) to challenge the arbitrator, and s. 46(4) bars the ground where the challenge was available and not made. A party who wants an oral hearing should request one under s. 26(1), and a party who wants to cross-examine, call a witness, file further evidence or answer a new point should ask, on the record, so that the refusal is in the record. The applicant in Mattamy had tendered the evidence and been refused; the applicant in Middlesex Centre had not sought an adjournment or a date to call further evidence. A party who believes the arbitrator has overlooked something should consider a request under s. 44(1)(b) to “amend the award so as to correct an injustice caused by an oversight on the part of the arbitral tribunal,” which must be made within thirty (30) days, because the Superior Court has held that a party’s failure to use s. 44(1)(b) “undermines a subsequent application to set aside the arbitration award on the basis of denial of procedural fairness” (Freedman at ¶ 191; Edenrock Holdings Inc. v. Moscone, 2025 ONSC 32 at ¶ 14).

After the award, the thirty (30) days run from receipt and cannot be extended. The firm’s arbitration deadline calculator computes them from the day the award was received, with the dates under s. 50 beside them. The first week should be spent classifying the complaint against the clause and the ten (10) grounds, deciding whether an appeal is available and whether to seek leave, and assembling the record. A set-aside application that is an appeal in disguise will fail, and it will fail with costs. Where both routes are available, they should be brought in one application, as in Sitzer and Baffinland. Where the complaint is jurisdiction, the notice of application should identify the question the arbitrator decided and the document that defines the submission, because the court will answer the three (3) Cargill questions from those documents. Where the complaint is fairness, the application should identify the specific opportunity that was denied, when it was requested, and what the tribunal said, and it should not argue the merits. The winning party should apply to enforce under s. 50 at once and, if a set-aside application is pending, ask the court to enforce or to stay enforcement on conditions under s. 50(5) and to give directions for a speedy hearing under s. 50(6). Both parties should expect the application to be heard on a documentary record, with the award, the agreement, the procedural orders and the transcripts, and should prepare it as the Court of Appeal has described the inquiry, as a review of the arbitrator’s authority and the fairness of the process rather than of the award.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract and fraud disputes, and in the court applications that follow the award, including applications to set aside or enforce an award under ss. 46 and 50 of the Act, applications for leave to appeal under s. 45, and appeals to the Court of Appeal under s. 49. The decisions described in this article are the ones we make with clients when an award arrives, and the objections and requests that preserve the grounds are the ones we make during the hearing. Our arbitration practice and our commercial litigation practice are described on the pages linked here. Our earlier articles on arbitrating a shareholder dispute in Ontario and on evidence in a commercial arbitration in Ontario deal with the stay motion, the arbitrator’s remedial powers and the law of evidence before the tribunal, and our page on civil fraud covers the claims in which allegations of fraud in the award most often arise. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Whether an award can be set aside depends on the arbitration agreement, the procedural history and the record, and the authorities cited should be read in full before they are relied on.

The post Setting Aside an Arbitral Award in Ontario appeared first on Grigoras Law.

This article sets out that law as it applies to a commercial arbitration under the Act. It covers the framework the Act supplies, including the evidence provisions of the Statutory Powers Procedure Act that s. 21 of the Act brings into every arbitration, the place of the Evidence Act before an arbitrator, hearsay, business records, electronic records, copies and handwriting, the witness who is not called, cross-examination on a written witness statement and the rule in Browne v. Dunn (1893), 6 R. 67 (H.L.), summaries of voluminous records and the witness who refuses to answer. It does not deal with family arbitrations or with international commercial arbitrations, which are governed by the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5.

The framework the Act supplies

The Act gives the tribunal control of the procedure and, in one section, its rule of evidence. Section 20(1) provides that “[t]he arbitral tribunal may determine the procedure to be followed in the arbitration, in accordance with this Act.” The limit on that power is s. 19, under which the parties “shall be treated equally and fairly” and “[e]ach party shall be given an opportunity to present a case and to respond to the other parties’ cases.” Section 19 is enforced through s. 46. An award made in breach of it may be set aside under paragraph 6 of s. 46(1), which applies where the applicant “was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case.”

Section 21 is the evidence provision, and it is short. “Sections 14, 15 and 16 (protection of witnesses, evidence at hearings, notice of facts and opinions) of the Statutory Powers Procedure Act apply to the arbitration, with necessary modifications.” Section 15(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (the “SPPA”), provides that a tribunal “may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court, (a) any oral testimony; and (b) any document or other thing, relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious.” The limits are in s. 15(2) and (3). Nothing is admissible “that would be inadmissible in a court by reason of any privilege under the law of evidence” or “that is inadmissible by the statute under which the proceeding arises or any other statute,” and nothing in s. 15(1) overrides an Act “expressly limiting the extent to or purposes for which” evidence may be admitted or used. A copy may be admitted where the tribunal is satisfied of its authenticity (s. 15(4)). Section 14(1) deems every witness at the hearing to have objected to answering on the ground that the answer may tend to criminate the witness or establish civil liability, and provides that “no answer given by a witness at a hearing shall be used or be receivable in evidence against the witness in any trial or other proceeding against him or her thereafter taking place, other than a prosecution for perjury in giving such evidence.” Section 16 lets the tribunal take notice of facts that may be judicially noticed and of “generally recognized scientific or technical facts, information or opinions within its scientific or specialized knowledge.” Section 21 is not among the provisions that s. 3 of the Act makes mandatory, so the parties may vary or exclude it by agreement, and an arbitration agreement or a procedural order that adopts the rules of evidence applied in the Superior Court does exactly that.

The sections that follow supply the skeleton of the hearing. The parties deliver statements of their positions, which “shall indicate the facts supporting their positions, the points at issue and the relief sought,” and “may submit with their statements the documents they consider relevant” (s. 25(2) and (3)). They must comply, “subject to any legal objection,” with the tribunal’s directions, including directions to “submit to examination on oath or affirmation with respect to the dispute” and to “produce records and documents that are in their possession or power,” and the court may enforce such a direction “as if it were a similar direction made by the court in an action” (s. 25(6) and (7)). The tribunal may decide the case on documents alone, but it “shall hold a hearing if a party requests it” (s. 26(1)). Everything a party gives the tribunal must be communicated to the other parties, and the tribunal must communicate “any expert reports or other documents on which it may rely in making a decision” (s. 26(3) and (4)). A party who “fails to appear at a hearing or to produce documentary evidence” faces an award “on the evidence before” the tribunal unless the party “offers a satisfactory explanation” (s. 27(3)). The tribunal may appoint its own expert, who may be required to attend a hearing at which the parties question the expert and call their own (s. 28).

Section 29 is the witness provision. A party may serve a person with a notice, issued by the tribunal, “requiring the person to attend and give evidence at the arbitration at the time and place named in the notice,” and the notice “has the same effect as a notice in a court proceeding requiring a witness to attend at a hearing or produce documents” (s. 29(1) and (2)). The tribunal may administer an oath or affirmation and require a witness to testify under it (s. 29(3)), and the court may, on the application of a party or of the tribunal, “make orders and give directions with respect to the taking of evidence for an arbitration as if it were a court proceeding” (s. 29(4)). Section 30 sets the outer limit. No person may be compelled “to produce information, property or documents or to give evidence in an arbitration that the person could not be compelled to produce or give in a court proceeding,” which is the provision that carries solicitor-client privilege, litigation privilege and settlement privilege into the hearing room intact.

Two (2) features of the statute deserve emphasis. The first is that the oath before an arbitrator is a real oath. The Criminal Code, R.S.C. 1985, c. C-46, treats a proceeding “before an arbitrator or umpire” as a “judicial proceeding” (s. 118), and a witness who, with intent to mislead, makes a false statement under an oath the tribunal is authorized to administer commits perjury under s. 131 in the same way as a witness at trial. The second is the form the Act’s rule of evidence takes. Alberta’s Arbitration Act, R.S.A. 2000, c. A-43, provides in s. 21(1) that the tribunal “is not bound by the rules of evidence or any other law applicable to judicial proceedings and has power to determine the admissibility, relevance and weight of any evidence.” Ontario reaches a similar place by a different route, by borrowing the admissibility rule written for administrative tribunals, and the difference is more than drafting. The SPPA rule is permissive, since the tribunal “may” admit. It preserves privilege and statutory exclusions in terms. It says nothing about weight, which is left to the tribunal’s judgment on the whole of the evidence. The consequence, developed in the next section, is that the rules of evidence applied in the Superior Court stop being conditions of admission before an arbitrator and become the measure of what the evidence is worth.

The Evidence Act before an arbitrator

Section 2 of the Evidence Act provides that the Act “applies to all actions and other matters whatsoever respecting which the Legislature has jurisdiction.” An arbitration conducted under a provincial statute, between parties in Ontario, about a contract governed by Ontario law, is such a matter, and the provisions of the Evidence Act are available in it. What s. 21 of the Act changes is their function. Before a court, the rules of evidence decide what comes in. Before an arbitrator with the s. 15(1) power, relevant evidence comes in unless it is privileged or a statute excludes it, and the rules decide what the evidence is worth. The Evidence Act’s facilitative provisions, including the business records rule, the provisions on electronic records, copies and handwriting, and the sections on cross-examination on prior statements, remain the instruments by which evidence is proved and tested, and they are the measure the tribunal applies in deciding weight.

It is our position that the practical rule before an Ontario arbitrator, where the parties have not agreed otherwise, is as follows. Relevant evidence is received, hearsay included, unless it is privileged or excluded by statute. The objection that a court would have excluded it goes to weight. The weight is decided in the award, on the whole of the record, by the reasoning the courts apply at the admissibility stage, including the principled approach to hearsay and the business records criteria. Two (2) decisions show the courts holding arbitrators to that rule from both directions. In York Region Standard Condominium Corp. No. 1311 v. Star Woodworking Ltd., 2026 ONSC 2381 (“York Region”), an application to set aside a commercial award, the court examined how the arbitrator had dealt with evidence that was “based largely on hearsay or bald allegations without direct evidence” and upheld the award because the parties “had a fair opportunity to call and cross-examine opposing witnesses” and the arbitrator’s treatment of the evidence was within the range of acceptable outcomes (¶¶ 34-43). In Farmer v. Farmer, 2021 ONSC 5913 (“Farmer”), an appeal from a family arbitration in which the arbitrator had excluded one side’s hearsay and admitted the other’s, Finlayson J. set out the law of hearsay at ¶¶ 171-193 for “the judge (or arbitrator)” and faulted the arbitrator for ruling on the evidence without a voir dire and before the evidence was complete (¶¶ 194-196). The lesson of the two decisions together is that the discretion under s. 15(1) is exercised through the ordinary law of evidence rather than in place of it.

Parties can change the default by agreement, in either direction. An arbitration agreement may adopt the rules of evidence applied in the Superior Court, and institutional rules and procedural orders frequently give the tribunal an express power to determine the admissibility, relevance, materiality and weight of evidence, as the IBA Rules on the Taking of Evidence in International Arbitration, which parties to domestic arbitrations often adopt as guidelines, do in Article 9. Whichever rule governs admission, the rules of evidence remain the measure of weight. The hearsay statement that a court would exclude is the statement an arbitrator will discount, for the same reasons, and the party who proves its case as it would have to in court loses nothing by doing so. The party who relies on the informality of the process takes a risk that the award will describe.

Hearsay before an arbitrator

Hearsay is an out-of-court statement tendered for the truth of its contents, and in court it is presumptively inadmissible (R. v. Bradshaw, 2017 SCC 35 (“Bradshaw”) at ¶ 1). Before an arbitrator the presumption is displaced by s. 21 of the Act and s. 15(1) of the SPPA, and the hearsay rule does its work at the stage of weight. The analysis is the same one, and it is worth setting out, because a closing submission that walks through it is the most effective answer to a case built on hearsay. The rule applies as much to a witness statement that repeats what someone else said as it does to a document. In commercial arbitrations the common examples are the email from a former employee describing events, the accountant’s covering letter, the consultant’s report and the officer’s statement that “I was advised by” a person who will not testify. The first question in every case is whether the evidence is hearsay at all, because a statement tendered to prove that it was made, or to explain what the witness then did, is not hearsay, and misguided objections of that kind are common (R. v. Khelawon, 2006 SCC 57 (“Khelawon”) at ¶¶ 56-58).

In court, hearsay may be received under a traditional exception, such as the business records provision discussed below, or under the principled exception, where the party tendering it establishes necessity and threshold reliability on a balance of probabilities (Khelawon at ¶¶ 42 and 47; Bradshaw at ¶ 23). Threshold reliability may be procedural, where adequate substitutes for cross-examination exist, including an oath, a recording or an earlier cross-examination, or substantive, where the circumstances in which the statement was made and the corroborating evidence show it to be trustworthy, and the two may work in tandem (Bradshaw at ¶¶ 27-32). Corroborative evidence counts only if it goes to the truthfulness or accuracy of the material aspects of the statement and rules out, on a balance of probabilities, the alternative explanations for it, including speculative ones (Bradshaw at ¶¶ 44 and 57). Only threshold reliability is decided at the admissibility stage in court. Ultimate reliability, which is the weight the evidence receives, is decided at the end on the whole of the record, and before an arbitrator the two inquiries merge into one, conducted in the award.

Farmer is the decision that applies this framework to an arbitrator, and what it adds is procedural. The arbitrator there had excluded hearsay without a voir dire and had intervened before the evidence was complete, and the court treated both as errors (¶¶ 194-196). A commercial tribunal that receives contested evidence under s. 15(1), hears the whole of the record and then rules on weight in the award is doing what the court in Farmer expected and what s. 21 contemplates, and in a hearing measured in days the provisional ruling is the only form of voir dire the schedule allows. The objecting party loses nothing by that course if it makes its objection on the record and returns to it in closing submissions.

York Region shows what happens to hearsay that is received. The arbitrator heard an oppression claim on affidavits and cross-examinations. The claimants’ evidence on the contested transactions was “based largely on hearsay or bald allegations without direct evidence,” and the arbitrator noted that “[n]o one was summonsed who could have been subject to cross-examination or shed direct light” on them. The arbitrator received the evidence, weighed it against the respondents’ direct evidence and found it rebutted, and the court declined to set the award aside (¶¶ 34-43). The case cuts both ways and should be read for both. Hearsay received by an arbitrator under the Act is weighed rather than ignored, and an award that weighs it stands. A party whose case is hearsay without documents, and who did not summons the person with direct knowledge, will usually lose on weight.

The practical rule that follows is simple. Prove each contested fact by a witness who perceived it or by a document that qualifies under an exception, and treat a hearsay account as a supplement to that proof rather than as a substitute for it. Where the only evidence of a fact is what a person who will not testify told the witness, the statement should identify that person, the occasion and the reason the witness believed what was said, because those are the circumstances the tribunal weighs (Farmer at ¶ 188). Necessity is the weaker limb of the principled exception where the declarant could have been summonsed under s. 29 of the Act and was not.

Business records under section 35 of the Evidence Act

Most of the documents in a commercial arbitration are hearsay in the strict sense. An invoice asserts that work was done and a price charged, a ledger entry asserts that money moved and an email reports what its author saw. Section 35 of the Evidence Act is the provision that admits them in court, and before an arbitrator it remains the best route in, because a record that satisfies the section carries the presumption of reliability that comes with it and the section’s criteria are the measure the tribunal applies in deciding weight. Under s. 35(2), “[a]ny writing or record made of any act, transaction, occurrence or event is admissible as evidence of such act, transaction, occurrence or event if made in the usual and ordinary course of any business and if it was in the usual and ordinary course of such business to make such writing or record at the time of such act, transaction, occurrence or event or within a reasonable time thereafter.” “Business” is defined to include “every kind of business, profession, occupation, calling, operation or activity, whether carried on for profit or otherwise,” and “record” to include “any information that is recorded or stored by means of any device” (s. 35(1)). The section does not apply “unless the party tendering the writing or record has given at least seven days notice of the party’s intention to all other parties in the action,” and the other parties are entitled to inspect the record within five (5) days of asking (s. 35(3)). Before a tribunal with the s. 15(1) power the notice is a condition of the section’s own route rather than of admission, but a party who serves it gives the tribunal the statutory ground for the record and the other side its chance to inspect, and loses nothing by doing so. Under s. 35(4), “[t]he circumstances of the making of such a writing or record, including lack of personal knowledge by the maker, may be shown to affect its weight, but such circumstances do not affect its admissibility.”

The Ontario courts state the requirements in a settled form. In Atlas Dewatering Corp. v. Harvie Construction Inc., 2024 ONSC 1775 (“Atlas Dewatering”), Healey J. adopted the eight (8) requirements drawn from R. v. Felderhof, 2005 ONCJ 406, stating them as follows, “a. a record made on some regular basis, routinely, systematically; b. of an act, transaction, occurrence or event; c. and not of opinion, diagnosis, impression, history, summary or recommendation; d. made in the usual and ordinary course of business; e. it was in the usual and ordinary course of such business to make such record; f. pursuant to a business duty; g. at the time of such act or within a reasonable time; and h. where the record contains hearsay both the maker and informant must be acting in the usual and ordinary course of business” (¶ 212). Her Honour added the principles drawn from Setak Computer Services Corp. v. Burroughs Business Machines Ltd. (1977), 15 O.R. (2d) 750 (H.C.J.), including that documents “created pursuant to a regular business duty, are presumed to be reliable” and that mere possession of a document by a party “does not cloak the document with proof of the truth of its contents” (¶ 213). She then admitted time and material sheets and invoices without calling the people who filled them in, on evidence that they “were prepared routinely” and were “used to prepare the formal invoices,” finding “no reason that arises from the evidence for those record keepers to be motivated to fabricate” (¶¶ 214-216).

The Divisional Court dismissed the appeal in Harvie Construction Inc. v. Atlas Dewatering Corp., 2025 ONSC 4672 (“Harvie”), and its reasons contain the sentence against which every objection to a business record should be measured. “The whole point of the ‘business records’ exception to the hearsay principle is that the ‘maker of the record’ need not testify to them,” and the tendering party “must satisfy the test set out in the Evidence Act” instead (¶ 14). The court noted that the trial judge had assessed the reliability of the documents “on the basis of the totality of the evidence before her” and had decided “the weight to be afforded records, as provided in s. 35(4)” (¶ 13).

Three (3) limits on the section are important in practice. First, s. 35 admits records of an “act, transaction, occurrence or event” and does not admit opinion, which is requirement (c) in Felderhof. The accountant’s covering letter that characterizes the entries is not a business record even if the ledger it accompanies is. Second, a record made for the arbitration is not made in the ordinary course of business. The schedule prepared by a party’s employee after the dispute arose, the explanatory email written in answer to counsel’s questions and the chronology assembled for the hearing are not business records, whatever the quality of the records they summarize, and they go in, if at all, as the witness’s own evidence or under the principled exception. Third, where the record contains information supplied by someone other than its maker, requirement (h) asks whether both were acting in the ordinary course of business. The invoice that records hours reported by a supervisor qualifies, because reporting hours is part of the supervisor’s business. The invoice that records what a customer said about a competitor does not.

What the section does for a party who uses it properly is considerable. A commercial case can be proved in large part from the other side’s own records, obtained on production and tendered under s. 35, and the party who made those records is poorly placed to attack them. Section 35(4) sends the maker’s lack of personal knowledge to weight, and the “totality of the evidence” approach approved in Harvie allows the tribunal to test a record against the other records and the oral evidence rather than against the maker’s testimony alone.

Electronic records, copies and handwriting

Nearly every record in a modern commercial dispute is electronic, and s. 34.1 of the Evidence Act governs its authentication and the best evidence rule without modifying the hearsay rules (s. 34.1(2)). The party introducing an electronic record “has the burden of proving its authenticity by evidence capable of supporting a finding that the electronic record is what the person claims it to be” (s. 34.1(4)). The best evidence rule “is satisfied on proof of the integrity of the electronic record,” which may be proved by evidence of the integrity of the system in which it was recorded or stored, and a printout that has been “manifestly or consistently acted on, relied upon, or used as the record” is itself the record for that purpose (s. 34.1(5), (5.1) and (6)). The integrity of the system is presumed, in the absence of evidence to the contrary, on evidence that it was operating properly at the material times, or “if it is established that the electronic record was recorded or stored by a party to the proceeding who is adverse in interest to the party seeking to introduce it,” or where a person who is not a party recorded it in the ordinary course of business (s. 34.1(7)). Those matters may be established by affidavit, and the deponent may be cross-examined as of right by an adverse party (s. 34.1(9) and (10)).

The presumption in s. 34.1(7)(b) is the one commercial litigants should notice. Accounting records kept in a system the opposing party controlled, emails sent from the opposing party’s own accounts and messages exported from the opposing party’s devices are records “recorded or stored by a party to the proceeding who is adverse in interest,” and the party who kept them is the last party in a position to dispute their integrity.

Section 55 deals with copies. A party who intends to prove “the original of a telegram, letter, shipping bill, bill of lading, delivery order, receipt, account or other written instrument used in business or other transactions” may give notice, “ten days at least before the trial or other proceeding,” that it intends to prove the contents by a copy, naming a time and place for inspection. The copy is then sufficient evidence of the contents unless the other party gives notice, within four (4) days after the time named for inspection, that it disputes the correctness or genuineness of the copy and requires proof of the original (s. 55(1) and (2)). Section 57 permits the comparison of a disputed writing “with a writing proved to the satisfaction of the court to be genuine” by a witness, and the writings and the witness’s evidence may be submitted “as evidence of the genuineness or otherwise of the writing in dispute.” A handwritten note of disputed authorship can therefore be proved by comparison with signatures and writings that are admitted to be genuine, and by the evidence of a person familiar with the author’s hand, without an expert. Section 33 adds that a copy of an entry in the books of a bank that is not a party is, on the proof the section specifies, evidence of the entry and of the transactions it records (s. 33(2) and (3)).

The notices under ss. 35(3) and 55(1) are counted from “the trial or other proceeding.” Before an arbitrator, s. 15(4) of the SPPA allows a copy to be admitted once the tribunal is satisfied of its authenticity, so the s. 55 notice is a convenience rather than a condition, but it remains the simplest way to settle authenticity before the hearing. The procedural order should fix the dates on which both notices are to be served. Where it does not, the safe course is to serve them well inside the statutory periods counted from the first day of the hearing, and the simplest course is to serve them with the document brief.

The witness who is not called

An arbitration is decided on the evidence the parties choose to call, and the choice not to call a witness has consequences that the Act and the case law both supply. The Act’s answer is s. 29. A party who needs the evidence of a person in the other camp may serve a notice issued by the tribunal, with the same effect as a summons in a court proceeding, and may ask the court under s. 29(4) for orders “with respect to the taking of evidence for an arbitration as if it were a court proceeding.” The case law’s answer is the adverse inference, and its limits are stricter than most parties assume.

The test is the one the Court of Appeal stated in Parris v. Laidley, 2012 ONCA 755 at ¶ 2, as quoted in Watter v. McMaster University, 2025 ONSC 4930 (Div. Ct.) at ¶ 72. “Drawing an adverse inference from a failure to produce evidence is discretionary. The inference should not be drawn unless it is warranted in all the circumstances. What is required is a case-specific inquiry into the circumstances including, but not only, whether there was a legitimate explanation for failing to call the witness, whether the witness was within the exclusive control of the party against whom the adverse inference is sought to be drawn, or equally available to both parties, and whether the witness has key evidence to provide or is the best person to provide the evidence in issue.” The Divisional Court restated the test as three (3) conditions in Association of Professional Engineers of Ontario v. Rew, 2020 ONSC 6018 at ¶ 92; namely, that the witness was within the exclusive control of the party against whom the inference is sought, that the failure to call the witness is unexplained, and that the witness had key evidence.

Each of the conditions has consequences. Where either party could have called the witness, the inference is not available against one of them. In Woods v. Jackiewicz, 2020 ONCA 458 at ¶ 27, the Court of Appeal upheld a refusal to instruct a jury on the inference because “[e]ither party could have called that evidence if they thought it was important.” In an arbitration, where s. 29 puts the summons in either party’s hands, that answer will be available more often than at trial, and the party who complains that a witness was not called will be asked why it did not summons the witness itself. A plausible explanation for not calling the witness defeats the inference, and the explanation need not be strong. In Ibrahimova v. Cavanagh, 2026 ONCA 573 at ¶¶ 85-87, the trial judge’s view that a witness from another institution “would not be favourably disposed to the [respondents] or under their control” was “a plausible explanation for why the respondents had not called such witnesses and was a sufficient basis for the trial judge to decline to draw an inference,” and his observation that the defence had not called such a witness either was a comment on the state of the evidence rather than a reversal of the onus. In Delrina Corp. v. Triolet Systems Inc. (2002), 58 O.R. (3d) 339 (C.A.) (“Delrina”), Morden J.A., quoting Sopinka, described the two (2) forms of the inference, that the absent witness’s evidence “would be contrary to the party’s case, or at least would not support it,” the trial judge having drawn “the milder of the two” (¶ 67), and held that an undertaking not to call the witness “would have been a logical explanation which would have prevented the adverse inference from being drawn” (¶ 78).

The party seeking the inference must also say what inference it wants. In Watt v. TD Insurance, 2022 ONSC 1514 (Div. Ct.) at ¶ 15, the argument failed because the appellant did not “identify precisely what adverse inference should have been drawn, what evidence would have been given had they been called to testify, and how such an inference may have affected the result,” and in Enofe v. Capreit Limited Partnership, 2020 ONSC 7113 (Div. Ct.) at ¶¶ 15 and 22, the same court noted that a party who learns that a witness will not be called may summons the witness itself, and that the inference is not drawn in the abstract. Nor is the inference a substitute for production. In Amtim Capital Inc. v. Appliance Recycling Centers of America, 2024 ONCA 225 at ¶¶ 12, 19-20 and 25, the Court of Appeal upheld a trial judge who refused to infer from a party’s failure to call its accountants that its financial summaries were unreliable, because the other side had not pursued the production remedies available to it, and added that a party which rests its case “on the potential use of an adverse inference” must “bear the consequences of its strategic choice.”

In arbitration the equivalent remedies are the direction to produce under s. 25(6) and the summons under s. 29, and a party who has them and does not use them will find the tribunal unreceptive to the inference. The award in York Region is the illustration. The claimants’ case rested on hearsay and on allegations without direct evidence, “[n]o one was summonsed who could have been subject to cross-examination,” and the claim failed on weight without any inference being drawn at all. A party whose own witness has the key evidence should therefore call the witness or explain the absence in evidence, because silence invites the milder inference described in Delrina even where the stricter one is unavailable. A party who needs the other side’s witness should summons the witness under s. 29 rather than rely on the inference, which is discretionary, requires exclusive control and will not be drawn against a party with a plausible explanation.

Cross-examination on written statements and the rule in Browne v. Dunn

The Act does not say how evidence in chief is to be given, and commercial tribunals usually direct that it be given in writing, by witness statement or affidavit delivered before the hearing, with the witness attending for cross-examination. The witness’s account is then fixed before the hearing starts, each side knows the other’s evidence in full and the documents are in a common brief. Two (2) provisions of the Evidence Act and one (1) rule of the common law govern what follows.

Under s. 20, a witness “may be cross-examined as to previous statements made by him or her in writing, or reduced into writing, relative to the matter in question, without the writing being shown to the witness,” but if the cross-examiner intends to contradict the witness by the writing, the witness’s attention must first “be called to those parts of the writing that are to be used for the purpose of so contradicting the witness.” Under s. 21, where a witness cross-examined on a prior oral statement inconsistent with the present testimony “does not distinctly admit” making it, proof may be given that the witness did, but “the circumstances of the supposed statement sufficient to designate the particular occasion shall be mentioned to the witness and the witness shall be asked whether or not he or she did make such statement.” Both sections are directions about fairness to the witness, and both are engaged in most commercial arbitrations, where the prior statements are emails, text messages and earlier affidavits.

The common law rule is the rule in Browne v. Dunn, which “creates an obligation to give a witness, called by the opposite side, an opportunity to explain evidence which the cross-examiner intends to later use to impeach the testimony or credibility of the witness” (Curley v. Taafe, 2019 ONCA 368 (“Curley”) at ¶ 27). The rule is about surprise. It “prevents the ‘ambush’ of a witness by not giving him an opportunity to state his position with respect to later evidence which contradicts him on an essential matter,” and its application “is generally restricted to situations where a party cross-examining a witness called by the opposite side is planning on adducing contradictory evidence to impeach the witness’s credibility” (Yan v. Nadarajah, 2017 ONCA 196 (“Yan”) at ¶ 15).

Where the evidence in chief is written and exchanged in advance, the rule is engaged far less often than parties argue. In Yan the contradictory evidence used to impeach the appellants “came in the form of the appellants’ own affidavits,” at the start of the cross-examination they had been asked “whether there was anything in their affidavits that was incorrect or needed to be changed” and had declined to change anything, and “there was no element of the kind of unfairness or surprise that the rule in Browne v. Dunn protects against” (¶ 16). In Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764 at ¶¶ 119-120, a fraud finding made on a record of affidavits and cross-examinations was upheld against the complaint that the rule had been misapplied, because the party “knew the case against him and was aware of the allegations against him” and “had ample opportunity to respond to those allegations, and indeed endeavoured to do so both in his lengthy affidavits and in cross-examinations on those affidavits,” and the summary judgment against him in that action was affirmed in Hryniak v. Mauldin, 2014 SCC 7. In Deokaran v. Law Society of Ontario, 2023 ONSC 1702 (Div. Ct.) at ¶ 35, the Divisional Court upheld an appeal panel’s conclusion that the rule does not apply where the party being impeached “has had full notice beforehand that there is an intention to impeach credibility of [the] story.”

The rule still has force where it applies, and the consequences of ignoring it are real. A tribunal that finds a breach may take it into account in assessing the witness’s credibility and the weight of the contradicting evidence, or may allow the witness to be recalled (Curley at ¶ 31). In Urbancorp Toronto Management Inc. (Re), 2019 ONCA 757 at ¶¶ 69-70, the Court of Appeal described a motion judge who was “not prepared to make a credibility finding” against a party whose witness “was not confronted with the document on cross-examination to enable him to explain any apparent inconsistency,” and the party that held the document lost the finding it had sought. The practical rule for the cross-examiner is to put every document and every prior statement on which the closing will rely to the witness whose evidence it contradicts, and to put the opposing theory in terms, because the cost of asking one more question is low and the cost of an unasked question can be the finding itself. The cross-examiner’s opening question, whether anything in the statement is incorrect or needs to be changed, is the question that foreclosed the complaint in Yan, and it costs nothing. The tribunal’s power to award costs under s. 54 of the Act is wide enough to reflect the quality of a party’s evidence, and in Yan costs on the higher scale were upheld because the losing party “tendered misleading evidence” (¶ 26).

Summaries of voluminous records

The reconciliation of invoices against time records, of bank statements against ledgers or of deliveries against purchase orders, over months or years, is the kind of exercise a tribunal cannot be asked to perform from the exhibits, and the law permits a summary. In R. v. Scheel (1978), 42 C.C.C. (2d) 31 (Ont. C.A.) (“Scheel”), the Court of Appeal held that summaries “based on evidence which had been properly admitted, were admissible to assist the jury in understanding the entire picture represented by voluminous documentary evidence,” their usefulness depending “entirely … upon the acceptance by the jury of the proof of the facts upon which the summaries were based” (¶ 13). The court adopted the rule that “a summary of books and records is admissible, provided cross-examination is allowed and the original records are available” (¶ 16), and held that the summaries did not offend the best evidence rule “since the documents which were the primary source of the summaries were in evidence” (¶ 18).

The Divisional Court’s reasons in Harvie show the same approach in a civil case. The trial judge had before her Scott Schedules prepared by the parties, the work recorded in the impugned documents “was the subject-matter of extensive evidence,” often “on an item-by-item basis,” and she could “assess the accuracy of these business records independently from the totality of the evidence before her, as she was entitled to do” (¶ 14).

The form of the summary decides its weight. It should be a schedule that carries, for every line, the identifier of the source document in the record, so that any cell can be checked against the exhibit in the hands of the witness. It should be adopted by a witness who has checked it and can explain the arithmetic, and it should be described to the tribunal as a summary and nothing more. A figure in a witness statement without its working is argument, and a summary that departs from the records behind it is worse than no summary, because the departure will be found in cross-examination and the rest of the schedule will be doubted with it.

The witness who refuses to answer

A witness in a commercial arbitration will sometimes be asked a question the answer to which could expose the witness to civil liability or to prosecution. In court the rule is in s. 9 of the Evidence Act. A witness “shall not be excused from answering any question upon the ground that the answer may tend to criminate the witness or may tend to establish his or her liability to a civil proceeding at the instance of the Crown or of any person or to a prosecution under any Act of the Legislature” (s. 9(1)), and an answer given after an objection on that ground “shall not be used or receivable in evidence against him or her in any civil proceeding or in any proceeding under any Act of the Legislature” (s. 9(2)). The Divisional Court summarized the two (2) subsections in Hogg v. Ontario Securities Commission, 2025 ONSC 6214 (Div. Ct.) (“Hogg”) at ¶ 56. In court the protection depends on the objection being taken. Before an arbitrator the objection is taken by statute. Section 14(1) of the SPPA, applied by s. 21 of the Act, deems a witness at the hearing “to have objected to answer any question asked him or her upon the ground that the answer may tend to criminate him or her or may tend to establish his or her liability to civil proceedings at the instance of the Crown, or of any person,” and provides that no answer given at the hearing “shall be used or be receivable in evidence against the witness in any trial or other proceeding against him or her thereafter taking place, other than a prosecution for perjury in giving such evidence.”

The point is important in arbitrations arising from allegations of fraud, misappropriation or breach of fiduciary duty, where the same facts could ground a criminal complaint or a claim by a third party. Three (3) consequences follow. First, the witness must answer. The deemed objection is the price of the compulsion rather than a licence to refuse, and a party who refuses a tribunal’s direction to submit to examination faces the court’s enforcement of the direction under s. 25(7) and an award on the evidence before the tribunal under s. 27(3). Second, the witness need not object question by question to earn the protection, which s. 14(1) confers on every answer given at the hearing, although counsel will often state the objection on the record so that the transcript shows it. Third, the protection operates in later proceedings against the witness. Within the arbitration in which the answer is given, the tribunal weighs it with the rest of the evidence, in the same way that Hogg holds a regulatory hearing to be no separate proceeding from the investigation in which the answers were compelled (¶¶ 60 and 74). A party who hopes to use the arbitration transcript against the witness in a later action, or to hand it to the police, should know that s. 14(1) stands in the way.

Section 30 of the Act and s. 15(2)(a) of the SPPA supply the other limit. A person cannot be compelled to produce documents or give evidence in an arbitration “that the person could not be compelled to produce or give in a court proceeding,” nothing is admissible “that would be inadmissible in a court by reason of any privilege under the law of evidence,” and a direction under s. 25(6) is expressly “subject to any legal objection.” Privilege, whether solicitor-client, litigation or settlement privilege, is therefore as complete before the tribunal as before the court.

Practical considerations

The evidentiary questions in this article are decided, in most arbitrations, by the procedural order made at the first case conference, and the party who comes to that conference with a position on each of them gains an advantage that lasts to the award. The order should say whether the s. 21 default governs or the parties have agreed to the rules of evidence applied in the Superior Court. It should say how evidence in chief will be given and when the statements will be exchanged. It should fix the dates for the notices under ss. 35(3) and 55(1) of the Evidence Act, or dispense with them on terms. It should provide that the authenticity of the documents in the common brief is admitted unless challenged by a stated date, that objections are to be made in writing before the hearing, and that the tribunal will receive contested evidence subject to the objection and rule on weight in the award. It should deal with the witnesses who will be summonsed under s. 29 and with any application to the court under s. 29(4).

Before the hearing, the work is in the documents. Every contested fact should be traced to a witness who perceived it or to a record that qualifies under s. 33, s. 34.1 or s. 35, and the record’s path into evidence should be written down. Witness statements should identify the source of the witness’s knowledge of each fact, because a statement that does so can be weighed and a statement that does not will be read as hearsay of unknown provenance. The decision whether to summons a witness in the other camp should be made early, because the adverse inference is a poor substitute for the evidence and the court’s assistance under s. 29(4) takes time. At the hearing, the party objecting to hearsay should object on the record, let the evidence in subject to the objection and return to the objection in closing, walking through necessity and reliability for each contested statement, and the cross-examiner should put every contradicting document and the opposing theory to the witness. Every witness should be reminded, before giving evidence, that the oath before an arbitrator is an oath in a judicial proceeding within the meaning of the Criminal Code, and that s. 14 of the SPPA protects the answers in any later proceeding against the witness.

How we can help

Grigoras Law acts as counsel in commercial arbitrations seated in Toronto, in shareholder, partnership, contract and fraud disputes, and in the court proceedings that surround them, including stay motions under s. 7 of the Act, applications under s. 29(4) for the court’s assistance in taking evidence, and applications to enforce or set aside the award. Much of the work in an arbitration is the evidence, and the decisions described in this article are the ones we make with clients at the first case conference and in the months before the hearing. Our arbitration practice and our commercial litigation practice are described on the pages linked here. Our earlier article on arbitrating a shareholder dispute in Ontario deals with the stay motion and the arbitrator’s remedial powers, and our page on civil fraud covers the claims in which the evidence questions discussed above arise most often. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. The rules of evidence that apply in a particular arbitration depend on the arbitration agreement, the rules the parties have adopted and the tribunal’s procedural orders, and the authorities cited should be read in full before they are relied on.

The post Evidence in a Commercial Arbitration in Ontario appeared first on Grigoras Law.

This article sets out the steps as follows, including what the platforms do with a complaint, the demand letter, the action and the motion for judgment against a defendant who does not defend, the test the court applies to a removal order, the form of order that the platforms act on, the position of a defendant who lives outside Ontario, the problem of copies and republications, and what happens after the judgment. It draws on the firm’s work in defamation and reputation management, and on the Ontario decisions of the last fifteen (15) years in which plaintiffs obtained orders of this kind.

What the platforms do with a complaint

Google’s own evidence is the clearest statement of the position. In Jeffery v. Almusslat, [2025] O.J. No. 5900 (Sm. Cl. Ct.) (“Jeffery”), a Small Claims Court action over a Google review, the court recorded Google’s evidence that its legal policy team considers every legal removal request and “can remove content that is clear and straightforward defamation,” but that “Google has chosen to defer to courts for the challenging cases regarding potential defamation before removing those reviews,” so that “it is up to the complainant to go to court in hopes of a finding of defamation regarding a post, and then, Google will voluntarily remove the post” (Jeffery at ¶ 23). The court summarized the four (4) pathways open to the subject of a review; namely, (i) asking the poster to remove it; (ii) flagging the post for Google; (iii) a formal legal request to Google supported by a sworn statement; and (iv) suing the poster, after which, “if a finding of defamation is made by a court, Google will likely remove the post” (¶ 54).

Thorpe v. Boakye, 2022 ONSC 7176 (“Thorpe”), shows the sequence in practice. When the plaintiffs sued over a set of Google reviews, Google’s lawyers told them that “if they obtained a court order declaring the reviews defamatory, Google would consider removing the reviews voluntarily” (Thorpe at ¶ 17). Google did not remove the reviews when it was served with the statement of claim itself under the Hague Service Convention, a step that “took several months” (¶ 129). When the court made orders on default “declaring the posts to be defamatory and requiring the authors of the posts to remove them,” Google, “on receiving those Orders, voluntarily removed the posts” (¶ 143).

The other platforms answer complaints the same way. Facebook’s reply to a defamation report in Braet v. Ramputh, 2022 ONSC 6682 (“Braet”), was that “it isn’t clear to us that the content you’ve reported constitutes defamation, violates your rights or is otherwise unlawful” (Braet at ¶ 11). Counsel who approached YouTube in Asselin v. McDougall, 2013 ONSC 1716, learned that “the Defendants alone could remove the comments or restrict access to them” (¶ 20). The review sites in Mirzadegan v. Mahdizadeh, 2022 ONSC 6082 (“Mirzadegan”), were “located all over the world and several declined to remove the content absent a court order” (Mirzadegan at ¶ 5), and the Arizona host of Ripoff Report told the plaintiffs in Caplan v. Atas, 2021 ONSC 670 (“Atas”), that “it would consider complying voluntarily with a court order from an Ontario court” (Atas at ¶ 126). Removal on a demand alone does happen; Change.org took down a petition on receipt of a libel notice in Lesser v. Meta Platforms Inc., 2025 ONSC 2105 at ¶ 29. It is the exception. Whether the platform itself can be sued over a review is a separate question, which we have addressed in our article on suing Google over a defamatory review.

The platforms defer to the courts for a reason that also explains why they move quickly once a judgment arrives. A host that leaves content up after notice can be liable for it. The Court of Appeal put the rule in one sentence in Warman v. Fournier, 2015 ONCA 873 (“Warman”), at ¶ 20, stating, “Liability in that circumstance turns on whether the statements at issue have been deleted by the host after reasonable notice to delete has been given,” and in Thorpe the court declined to accept Google’s argument that it could not know whether the reviews were defamatory until a court said so, finding a genuine issue as to whether Google, “upon receiving notice of them, was under a legal obligation to remove them” (¶ 146). That exposure is the reason the platforms publish a legal process at all. It does not turn a complaint into a removal.

One more distinction is important before the steps. Removal at the source and de-indexing are two (2) different things. The author or the host deletes the post; Google removes the address of a copy from its search results. Google’s own page on removal says that it “can restrict access to content that appears in Google products and services, but that content may still exist elsewhere on the web.” A judgment is drafted to do both jobs, as explained below.

The demand letter

The first step is a written demand to the author. It identifies each post by its address and quotes the words, states that they are false, demands removal by a stated date, and says what follows if the date passes. Where the publisher is an Ontario newspaper or broadcaster, the Libel and Slander Act, R.S.O. 1990, c. L.12, requires written notice within six (6) weeks after the libel came to the plaintiff’s knowledge (s. 5(1)). That requirement applies “only to newspapers printed and published in Ontario and to broadcasts from a station in Ontario” (s. 7), and the party who says that an internet post is a broadcast has to prove it (St. Lewis v. Rancourt, 2015 ONCA 513 (“St. Lewis”) at ¶ 8). For a post by an individual on social media, the claim is governed by the ordinary two (2) year limitation period. The firm’s notice of libel deadline calculator computes the six (6) weeks, the three (3) months under s. 6 and the two (2) years from the day the publication came to the plaintiff’s knowledge, and its checklist covers what the notice must contain and how it is served.

The demand is worth sending even when it is certain to be ignored, because the refusal is the fact from which the court later infers that the defendant will keep publishing. The Court of Appeal in Warman upheld a permanent injunction on an inference drawn from, among other things, the defendants’ refusal to remove the statements “until approximately nine months after being served with the respondent’s first notice of libel and seven months after the delivery of his statement of claim” (Warman at ¶ 21). In Duncan v. Buckles, 2020 ONSC 3219 (“Duncan”), the defendant “did not stop his campaign in the face of a libel notice, after the action was started or even after the Small Claims Court found that Ms. Duncan’s fence was lawful” (Duncan at ¶ 66), and the removal order followed. A copy of the demand to the host puts the host on notice for the purposes of Warman. The refusal also goes to costs; in Manson v. John Doe No. 1, 2013 ONSC 628, Goldstein J. awarded substantial indemnity costs because the defendant “refused to even attempt to justify or remove manifestly defamatory posts in the face of a libel notice” (¶ 33).

The evidence starts the same day. Each post is captured with its address, the account name and handle, the date, and the view, like, share and comment counts, and the captures are repeated as the counts change. Two (2) refusals show what happens otherwise. In Statuscent Inc. v. Chehade, 2023 ONSC 3977, the removal order for a website failed because the hyperlinks in the record were defunct and the only screenshot “showed folders and not the specific content that was posted on the website” (¶ 12). In Kaur v. Virk, 2022 ONSC 6697 (“Kaur”), Emery J. refused to find that a WhatsApp video had been published at all, because no one had explained how WhatsApp works, stating, “The court cannot conduct its own research outside of the evidence given on a hearing to determine facts” (Kaur at ¶ 33). The affidavit on the motion has to explain each platform, how the content is seen and shared, and what the counts mean.

The action, and the defendant who does not defend

The statement of claim pleads each publication on its own, including the words, the date, the platform, the account, the address and the meanings the words bear. A general paragraph meant to sweep in everything else does not work. In Wong v. Tang, 2025 CanLII 93642 (Sm. Cl. Ct.), the court refused to treat such a paragraph as a “catchall,” stating, “It is not the role of the Court to scrutinize this material in order to identify potentially tortious content” (¶ 5). The claim is served in Ontario or, where the author is elsewhere, without leave under rules 17.02(g) and (i) of the Rules of Civil Procedure, the basis the Court of Appeal accepted for a claim to restrain internet defamation in Barrick Gold Corp. v. Lopehandia (2004), 71 O.R. (3d) 416 (C.A.) (“Barrick”), at ¶ 72. Service abroad under the Hague Service Convention takes months, as it did on Google in Thorpe (¶ 129).

Most of the defendants in these cases never defend, and the law is built for that. A defendant noted in default is deemed to admit the allegations of fact in the claim (rule 19.02(1)(a)), is not entitled to notice of any step in the action (rule 19.02(3)), and the plaintiff moves for judgment on affidavit evidence (rule 19.05). The plaintiff is not entitled to judgment merely because the facts are deemed admitted (rule 19.06). In Thorpe, the first motion for judgment failed because the copy of the claim in the motion record “omitted the very paragraphs that contained the defendants’ defamatory words” (¶ 141), and the orders Google later acted on were made only when the complete pleading was filed (¶ 143). Posts made after the claim was issued are not deemed admitted and must be proven; in Bui v. Bui, 2025 ONSC 6902 (“Bui”), the court held that such posts “are not covered by r. 19.02(1)(a), and the defendant is not deemed to admit she made them” (Bui at ¶ 9), and then found her responsible for them on the evidence. Falsity is presumed, as Sossin J. held in Emeny v. Tomaszewski, 2019 ONSC 3298 (“Emeny”), stating, “[i]n the context of a default judgment, therefore, the communications are presumed to be false” (Emeny at ¶ 23). Damages must still be proven.

An interlocutory injunction before judgment is available where the words are “clearly defamatory,” no defence of justification or fair comment has been signalled that could succeed, and irreparable harm is shown (Bagwalla v. Ronin, 2017 ONSC 6693 at ¶ 19). A mandatory order to remove content at that stage is another matter. Pattillo J. refused one in Clancy v. Farid, 2018 ONSC 7482 (“Clancy 2018”), where the defendant denied authorship, holding that an order requiring him to remove the posts “is only appropriate as a final order following a trial of the issue” (Clancy 2018 at ¶ 32). Where the defendant has not responded at all, the motion for default judgment is the shorter road to the order that the platforms act on, and it carries no undertaking as to damages.

The test for a removal order

The test was stated by Chapnik J. in Astley v. Verdun, 2011 ONSC 3651 (“Astley”), and adopted by the Court of Appeal in St. Lewis at ¶ 13, as follows, “Permanent injunctions have consistently been ordered after findings of defamation where either: (1) there is a likelihood that the defendant will continue to publish defamatory statements despite the finding that he is liable to the plaintiff for defamation; or (2) there is a real possibility that the plaintiff will not receive any compensation, given that enforcement against the defendant of any damage award may not be possible” (Astley at ¶ 21). The two (2) branches are alternatives. The Court of Appeal added that “[a] broad ongoing injunction is an extraordinary remedy which should be used sparingly. However, where there has been a campaign of defamation and a likelihood that it will continue, there is authority for such an order” (St. Lewis at ¶ 16).

On default, the courts apply that test and grant the removal order with the injunction once a branch is met. In Post v. Hillier, 2022 ONSC 3793 (“Post”), Gomery J. found that the defendant “may very well continue to publish defamatory statements,” found “a real possibility” of non-recovery given her own statements that she had no funds, and ordered her “to take down all social media posts regarding Ms. Post, within ten days of the date of this decision” (Post at ¶ 45). In Mirzadegan, Centa J. enjoined defendants in Iran from publishing defamatory statements, declined to prohibit all comment about the plaintiffs, and ordered them “to have the posts removed” (Mirzadegan at ¶¶ 17-18). In Emeny, Sossin J. reasoned that the difficulty of service and the defendant’s decision not to respond made it likely that the plaintiff could not enforce a judgment (Emeny at ¶ 61). In Duncan, the order required removal by a stated date of “all blogposts, YouTube videos and all other internet content he has posted that refer to Ms. Duncan … including comments made by others on these online posts” (Duncan at ¶ 73(c)). In Canadian Aids Treatment Information Exchange v. Blackwell, 2025 ONSC 4678, the defendant was ordered to remove “all the online material attached to the affidavit” of the plaintiffs’ witness, a copy of which was to be appended to the order (¶ 41). Gordon J. put the rationale in one sentence in Cyr v. LeBlanc, 2022 ONSC 2555 (“Cyr”), stating, “a damage award can only address past publication and an injunction is required to prevent a future spread of defamatory statements” (Cyr at ¶ 45).

The refusals are instructive, because each turned on a gap in the evidence. In Van Leeuwen v. Calderone, 2024 ONSC 7178, the posts had been removed and, in the judge’s words, “there is no evidence before me that the plaintiffs will be unable to enforce a judgment” (¶ 24). In Flegel v. Dennis, 2026 ONSC 3532, the post had come down after the libel notice and before the action (¶ 92). In Smith v. Nagy, 2025 ONSC 4629, the defendant’s refusal had been made in good faith, and the judge stated, “I am confident that the defendant will do so” (¶ 176). In Hosseini v. Gharagozloo, 2024 ONSC 1106 (“Hosseini”), Perell J. awarded $400,000.00 but made no removal order, because the platforms hosting the videos were not defendants and “there was no evidence … as to the feasibility of ordering Mr. Gharagozloo to remove or to even attempt to have the internet postings removed” (Hosseini at ¶ 86). The record on the motion has to prove continuation, the likelihood of non-recovery, the defendant’s control of the accounts, and the content itself, with current captures.

The form of order that the platforms act on

The order is the instrument, and its drafting decides whether the platforms act on it. Six (6) features recur in the orders that have worked.

The first is a declaration, in the operative part of the judgment, that each listed publication is defamatory of the plaintiff and false, and bears the stated meanings. That is the form of order Google acted on in Thorpe (¶¶ 22 and 143). The finding of falsity has a separate purpose for the American platforms. In Atas, counsel advised that “in some American jurisdictions, the plaintiffs require an affirmative finding of the falsity of the impugned publications in order to get those publications removed” (Atas at ¶ 87); Corbett J. accepted that the finding was “an appropriate ancillary remedy” although it was unnecessary under Ontario law (¶ 89), and made it (¶ 90).

The second is a schedule to the judgment listing every publication by date, platform, account and address, with the words complained of. The order in Canadian Aids Treatment Information Exchange appended the exhibited material (¶ 41); Mathen J. in CNSX Markets Inc. v. Marks, 2026 ONSC 3952 (“CNSX”), tied the removal term to “the statements identified by the Applicant in Exhibit ‘UUU’” (CNSX at ¶ 90(a)(v)); and in Thorpe a further order was needed to add an address that had been left out of the first one (¶ 22). The warning is Inivos Ltd. v. Green, 2024 ONSC 5719 (“Inivos”), where Centa J. refused to find contempt for a failure to remove earlier posts because the order was prohibitory in form, holding that “an order that is intended to be mandatory (as opposed to prohibitory), should make that requirement explicit” (Inivos at ¶ 32), and that a proper takedown term “would have explicitly listed the posts that Mr. Marsh was to remove” (¶ 33).

The third is an explicit mandatory term with a deadline, a duty to search, and written confirmation. The wording that has survived a contempt motion is Seppi J.’s in Poulie v. Johnston, 2019 ONSC 5425 (“Poulie”), requiring the defendant to “forthwith and by no later than 14 days of this Order, remove, direct and/ or cause to be removed, any and all on-line materials … from all sites” (Poulie at ¶ 33), which LeMay J. held imposes “a positive obligation to search out the information on the internet and take all reasonable steps to ensure that it is removed” (¶ 102). The Court of Appeal in Labourers’ International Union of North America, Local 183 v. Castellano, 2020 ONCA 71 (“Castellano”), upheld terms requiring the defendant to remove and destroy the material within seven (7) days and then to provide written proof of the steps taken and written confirmation that “no such material remains publicly accessible or within his possession or control, or, to the best of his knowledge, remains in the possession or control of a third party,” adding only a carve-out for use in a pending proceeding (Castellano at ¶ 22).

The fourth is a term giving the plaintiff liberty to deliver the judgment to the platforms and to anyone hosting or republishing the content, and to request removal to give effect to it. Centa J. included it in Mirzadegan, at ¶ 19, stating, “The plaintiffs may, however, request that any entity hosting these defamatory posts remove them to give effect to this decision.” Archibald J.’s order in the Clancy litigation was “a mandatory order permitting the plaintiffs to request the removal of the defamatory postings from the internet by submitting the order to the website hosts, Internet Service Providers and search engines” (Clancy v. Farid, 2022 ONSC 947 at ¶ 35), and it was made a final order “to assist the plaintiffs in obtaining its removal both in Canada and the United States” (Clancy 2018 at ¶ 33). The term does not bind the platforms and does not need to. It puts in the judgment the invitation that their legal processes respond to.

The fifth is that the judgment does not purport to order Google, Meta, X or YouTube to do anything. They are not parties, and orders directed at non-parties without proper notice have been set aside each time the point was taken. Dubé J. set aside take-down and refraining orders against Facebook in Braet because they were granted without notice, without full and frank disclosure, on “bald, conclusory and unsubstantiated” claims, and in terms so overbroad and confusing that Facebook could not comply (Braet at ¶ 80), and held that an order of that kind “must be clear, concise, and as narrow in scope as possible to achieve its specific purpose” (¶ 75). Morgan J. set aside an injunction and Norwich order against Google in Obsidian Group Inc. v. Google LLC, 2022 ONSC 1286, because an email to the address Google uses for public inquiries about service was not service; “Google must be served in accordance with the Rules, just like any other party in civil litigation” (¶ 7). The judgment operates on the author. The platforms act on it because they have chosen to defer to the courts and because a host on notice of a finding that does nothing exposes itself to liability. The Court of Appeal made the same point in Barrick, where an injunction against a defendant in British Columbia was effective because “it will operate to prevent Yahoo from continuing to post the defamatory messages” (Barrick at ¶ 76).

The sixth is precision. The injunction “must be broad enough to be effective but no broader than reasonably necessary to effect compliance” (Castellano at ¶ 18). The Court of Appeal in Castellano set aside a blanket prohibition on any comment about the plaintiffs, because the motion judge had made no finding that the defendant “was incapable of discerning between defamatory comments and legitimate criticism” (¶ 20), and amended the terms to restrain “any defamatory” statements (¶ 21). In Miranda v. Balita Media Inc., 2026 ONCA 223 (“Miranda”), the court set aside an injunction against statements “similar” to the defamatory ones as “overly broad, not proportionate and not properly defined,” because the order did not define, and the reasons did not list, the statements enjoined (Miranda at ¶ 35); the language “invites questions about whether statements are defamatory or not” and was “incapable in practical terms of enforcement” (¶ 36). The answer is to itemize. The injunction in Warman was upheld because the trial judge confined it to the statements the jury had found defamatory (Warman at ¶ 18), and the injunction in Duncan was enforced by contempt only because the reasons had set out “exactly what she found to be defamatory and hence prohibited” (Duncan v. Buckles, 2021 ONSC 1158 at ¶ 47). Within that frame the order can reach around the obvious evasions. Dunphy J. in Zhong v. Wu, 2021 ONSC 5873, applied the injunction to anything the defendant “may publish in his own name or using any other name, username, pseudonym or account over which he has control or to which he has access in fact as well as to any statements that he knowingly encourages or causes others in future to post” (¶ 70(d)(i)); the terms upheld in Castellano extend to causing “any other person to make or publish” the statements (¶ 21); and Mathen J. in CNSX prohibited tags and hashtags in any commentary about the applicant, because “[t]ags and hashtags are an important way that social media users increase the visibility of their posts to readers and other users” (CNSX at ¶ 88).

The defendant outside Ontario

The objection that an order against a defendant in another country is futile was answered by the Court of Appeal in Barrick, and the default cases have applied the answer to defendants in British Columbia, the United States, Vietnam and Iran. Blair J.A. accepted that courts “have traditionally been reluctant to grant injunctive relief against defendants who are outside the jurisdiction” (Barrick at ¶ 73), but held that a claim to restrain the publication in Ontario of a libel originating elsewhere is a recognized exception, and that the plaintiff and the publication here supplied a sufficient connection with Ontario (¶ 74). The courts, he said, can either “throw up their collective hands in despair” or “at least protect against the impugned conduct re-occurring in their own jurisdiction,” and he adopted Kirby J.’s observation that any suggestion that internet defamation must simply be tolerated is “self-evidently unacceptable” (¶ 75). The injunction may be effective even if it can only be enforced against the defendant personally when he enters the province, for two (2) reasons; namely, that it operates on the host, and that it may be enforced where the defendant lives (¶ 76). His Honour added that “the protection and vindication of that reputation in Ontario is what gives rise to the court’s mandate in cases of this nature” (¶ 77).

The later cases follow it. In Manson v. Moffett, [2008] O.J. No. 1697 (S.C.J.), Hoilett J. treated the American defendant’s belief that a Canadian judgment could not be enforced against him as a reason for the injunction rather than against it (¶ 12), and held that “the rationale expressed in Barrick is wholly applicable” (¶ 14). The Court of Appeal in Kideckel v. Kideckel, 2025 ONCA 689, refused to stay an injunction against a defendant in California pending appeal, observing that he “can act in accordance with the injunction simply by not defaming David” (¶ 18). Mirzadegan (Iran), Bui (Vietnam) and Emeny (British Columbia) are all default judgments with removal or injunction terms against defendants outside Ontario. The reverse exercise is recognized too; in Inivos, Centa J. registered English permanent defamation injunctions in Ontario and made them enforceable here (Inivos at ¶ 7). In practice, the removal order against a defendant abroad is rarely enforced by contempt, and it does not need to be. Its value is that the platforms act on it.

Copies, republications and the anonymous reposter

A removal order reaches what the defendant controls. For the rest, the orders use a best-efforts term. Nishikawa J.’s order in Elaschuk v. Thelwell, 2020 ONSC 1407 (“Elaschuk”), required the defendant to “use best efforts to remove” her statements from the third-party websites listed in a schedule (Elaschuk at ¶ 2), a term chosen “in recognition that once posted, Ms. Thelwell did not have complete control over the statements” (¶ 62), and enforced on the contempt motion by requiring “proof of written requests” to each of those sites (¶ 71(b)). Perell J.’s term in Soliman v. Bordman, 2021 ONSC 7023, was that the defendant “remove any media he controls and attempt to have removed any media controlled by others that he has published” (¶ 212).

The republications themselves are a different problem. The author is liable for them where republication was authorized or was the natural and probable result of the original publication, and in Clancy v. Farid, 2023 ONSC 2750 (“Clancy 2023”), Ramsay J. accepted that bots and replication are a feature of the medium the defendant chose, so that “the defamatory statements will perhaps always reside on the Internet” (Clancy 2023 at ¶¶ 47-48). That goes to damages against the author. It does not produce an order against the republisher, and a contempt court will not read the republication doctrine into an order against the defendant (Inivos at ¶ 30). Each republisher who is to be bound needs a claim of his own. Where the republisher is anonymous, a Norwich order against the platform to identify him is available, as it was against Google in the Manson litigation (Manson v. John Doe No. 1, 2013 ONSC 628 at ¶ 9), but the platform must be properly served (Obsidian at ¶ 7; Braet at ¶ 52) and the order “must be clear, concise, and as narrow in scope as possible to achieve its specific purpose” (Braet at ¶ 75).

One term reaches copies without a further proceeding. In Atas, Corbett J. accepted that the court can order a defendant to remove content, found that such an order would be futile against that defendant for five (5) reasons, and adopted the plaintiffs’ alternative of “vesting title to the postings in them, with ancillary orders enabling them to take steps to have the content removed” (Atas at ¶ 228). In Clancy 2023, the judgment required the defendant to assign to the plaintiffs the copyright in the defamatory content “so that the Plaintiffs may, at their sole discretion, take any legal proceedings they consider necessary to restrain the continued republication … by third parties” (Clancy 2023 at ¶ 230(d)), while a term that he “assist” the plaintiffs with removal from search engine caches and third-party sites was refused as “too vague and likely unenforceable” (¶ 239); the Court of Appeal records that the formal judgment included the assignment (Clancy v. Farid, 2024 ONCA 568 at ¶¶ 12-13). A copyright complaint by the owner of a video or a text is something every platform processes on its own terms, without any finding of defamation, which is what makes the term useful. It needs evidence. Centa J. refused a vesting order in Mirzadegan because the record held no evidence about the ownership of the accounts or about the effect of vesting on the defendants’ legitimate activities (Mirzadegan at ¶ 19).

Later posts by the same defendant are dealt with under the judgment rather than by a new action. In Caplan v. Atas, 2021 ONSC 5390, Corbett J. held that the court was not functus officio in respect of enforcement (¶¶ 9 and 11) and made an order that “does no more than provide the moving parties with enforcement of the Judgment in respect to publications made or coming to their attention after the date on which the motions for judgment were argued” (¶ 22). A judgment can say so expressly, with a term preserving the plaintiff’s liberty to move, on notice by email, to add further publications to the schedule.

After the judgment

The judgment is served on the defendant by the methods the court has validated. It is then delivered, with its schedule, through each platform’s legal removal process, with a covering letter that points to the declaration and the list of addresses. Copies that others have posted are dealt with by a libel notice to the republisher and to the host, enclosing the judgment, and, where an assignment of copyright was granted, by a copyright complaint. Every request and every response is recorded against the schedule, because the same record is needed if the judgment ever has to be enforced.

Contempt is the court’s answer to a defendant within its reach who ignores the order. Myers J. sentenced the defendant in Paramount Fine Foods v. Johnston, 2021 ONSC 6558, to “total consecutive terms of 18 months for contempt of court” (¶ 127), and in Poulie v. Johnston, 2022 ONSC 5186, the warrant for the same defendant’s arrest was “to be specifically brought to the attention of the RCMP and the Canada Border Services Agency” (¶ 78). Against a defendant who stays abroad, contempt has no practical effect unless he enters Canada, and the plan should not depend on it.

Two (2) further terms are sometimes worth asking for. A retraction was ordered in Post, where the defendant was a public figure with a significant following, in the form of a notice on her Twitter account for sixty (60) days “acknowledging that her statements about Ms. Post were false and defamatory, and providing a link to this decision on CanLII” (Post at ¶ 46). An apology is another matter; the courts have refused to order one from a defendant who would not mean it, and Perell J. called an apology from a non-resident “a futile order” (Hosseini at ¶ 87). The judgment itself is a public document, and the plaintiff “may post this court’s judgments or links to this court’s judgments as he may be advised” (¶ 87). That is often the most durable answer to a copy that resurfaces.

The damages in these cases are substantial, and they are awarded on default. The defendant in Emeny was ordered to pay $450,000.00 (Emeny at ¶ 64); the award in Hosseini was $400,000.00 (¶ 85); the general damages in Mirzadegan were $200,000.00 with $50,000.00 in aggravated damages (¶¶ 14 and 16); the awards in Post and Duncan were $85,000.00 and $70,000.00 (Post at ¶ 2; Duncan at ¶ 73(b)). Costs follow at a higher scale where the defendant refused to remove in the face of a demand; Gordon J. awarded full indemnity costs in Cyr on the basis that plaintiffs in internet cases “are put to additional expense in these types of cases and do so to protect their reputation in the community” (Cyr at ¶ 49), and Perell J. fixed substantial indemnity costs of $180,000.00 in Hosseini (¶ 88).

Practical considerations

For the person who has just found the post, the order of work is as follows. Capture everything now, with the address, the account, the date and the counts, before the post changes or disappears. Send the demand with a deadline, to the author and to the host, and keep the response or the silence. Use the platform’s complaint process, because the refusal is itself evidence, but do not wait on it. Expect months rather than weeks between the claim and the order, longer where the author is abroad and the claim travels under the Hague Service Convention, and plan the evidence for the motion from the start, because the refusals in the cases are refusals on evidence.

Be clear about what the judgment achieves. The posts come down from the accounts the defendant controls, and the platforms act on the declaration for the copies they host. Google removes the addresses from its results, and its own page says that the content “may still exist elsewhere on the web.” Some copies will persist, as Ramsay J. accepted in Clancy 2023 (¶ 48). The judgment that declares the statements false is the answer to those copies, and it is a public record that the plaintiff can point to for as long as the copies last.

Choose the defendant with care. The author is the defendant in the ordinary case, because the author controls the accounts and the judgment against the author is what the platforms act on. A claim against the platform itself is possible, and Thorpe shows that a host on notice may be answerable for what it leaves up (¶ 146), but it must be properly served, in the United States if that is where it is, and the orders against it must be narrow and supported by evidence (Braet at ¶¶ 75 and 80; Obsidian at ¶ 7). That is a different and longer proceeding, and it is not the way the content usually comes down.

How we can help

Grigoras Law acts for individuals and businesses in Toronto and across Ontario who have been defamed online, from the demand letter through the judgment and its delivery to the platforms, and for defendants who have been served with a claim or an injunction motion. We draft the orders in the form the platforms act on, and we deal with the republications and the anonymous accounts that follow. Our defamation practice and our reputation management practice are described on the pages linked here, the hub page on defamation and reputation management covers the group as a whole, and the page on social media and internet law covers the platforms themselves. For an interlocutory injunction before judgment, see our page on urgent commercial remedies. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Every case turns on the words complained of, the platform, the evidence and the defendant, and the form of the order decides whether the content comes down, so the steps described here deserve advice before the first demand is sent.

The post Removing a Defamatory Post from Google and Social Media in Ontario appeared first on Grigoras Law.

Which of them is correct turns on a body of Ontario law that is more settled than most business owners expect, and more favourable to the clause than most applicants hope. This article breaks that law down as follows, including the mandatory stay under s. 7 of the Act, the questions the court asks on a stay motion and the competence-competence principle, the scope of the usual clause, the arbitrability of oppression claims, the position of the corporation that did not sign and of the respondent who litigated first, the effect of allegations of fraud and claims in tort, and the remedies an arbitrator can grant. It is written for the shareholder weighing the forum and for the lawyer who has to advise on it quickly, and it draws on the firm’s work in commercial arbitration in Ontario and in shareholder disputes.

The mandatory stay under section 7 of the Act

Section 7(1) of the Act provides as follows. “If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding.” The operative word is “shall.” Under the former Arbitrations Act the court had a discretion to stay or not. The current Act reversed the presumption, and the Court of Appeal has described its language as “directory, not equivocal” (Haas v. Gunasekaram, 2016 ONCA 744 (“Haas”) at ¶¶ 10-12). Blair J. held the same in the Act’s first year; namely, that the court “must stay the court proceedings and allow the arbitration to go ahead unless the matter either falls within one of the limited exceptions or is not a matter which the parties have agreed to submit to arbitration” (Deluce Holdings Inc. v. Air Canada (1992), 12 O.R. (3d) 131 (Gen. Div.) (“Deluce”) at ¶ 60).

Section 7(2) of the Act sets out five (5) exceptions. The court may refuse to stay the proceeding where (i) a party entered into the arbitration agreement while under a legal incapacity; (ii) the arbitration agreement is invalid; (iii) the subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law; (iv) the motion was brought with undue delay; or (v) the matter is a proper one for default or summary judgment. Two (2) further provisions are important in shareholder cases. Under s. 7(5), the court may stay the arbitrable part of a proceeding and allow the rest to continue, if the agreement covers only some of the matters in the proceeding and it is reasonable to separate them. Under s. 7(6), the court’s decision on the stay motion cannot be appealed. As such, these motions are argued as if they were final, which they are.

The Act’s other contribution is s. 17. It gives the arbitral tribunal the power to rule on its own jurisdiction, including on objections to the existence or validity of the arbitration agreement, and it treats the arbitration clause as an agreement independent of the contract that contains it, so that the clause can survive a finding that the main agreement is invalid. That provision, read with the case law, is the reason the court’s role on a stay motion is deliberately shallow.

The stay motion and the competence-competence principle

The Court of Appeal’s framework for a s. 7 motion asks five (5) questions (Haas at ¶ 17); namely, (i) whether an arbitration agreement exists; (ii) what the subject matter of the dispute is; (iii) what the scope of the arbitration agreement is; (iv) whether the dispute arguably falls within the scope of the arbitration agreement; and (v) whether grounds exist on which the court should refuse to stay the action. The fourth question decides most motions, and it does so because of the word “arguably.” The court decides only whether it is arguable that the dispute falls within the clause. If it is, the stay is granted and the arbitrator decides the rest. Ontario adopted that approach from the British Columbia Court of Appeal more than two (2) decades ago, and the Court of Appeal restated it in Haas at ¶ 15, quoting Dancap Productions Inc. v. Key Brand Entertainment, Inc., 2009 ONCA 135, for the proposition that it is not for the court on a stay application to reach any final determination as to the scope of the arbitration agreement.

Behind the arguable-case threshold sits the competence-competence principle. The Supreme Court of Canada laid down the general rule in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”) at ¶ 84. In any case involving an arbitration clause, a challenge to the arbitrator’s jurisdiction must be resolved first by the arbitrator. The exception is a challenge that turns solely on a question of law, or on a question of mixed fact and law that requires only a superficial consideration of the documentary record. The Court of Appeal in Haas stated the practical consequence at ¶ 41, holding that “in the normal course, s. 17 of the Arbitration Act and the jurisprudence plainly expect that the determination of jurisdiction will be made by the arbitrator, not the court.”

The Supreme Court’s more recent decision in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41 (“Peace River”), organized the analysis into two (2) stages, and Ontario courts now run s. 7 motions through it. At the first stage, the party seeking the stay must establish the technical prerequisites, which the Superior Court has restated as four (4); namely, (i) an arbitration agreement exists; (ii) a party to it has commenced litigation; (iii) the court proceeding is within the scope of the agreement; and (iv) the party applying for the stay has not taken a step in the proceeding (Sherif Gerges Pharmacy Professional Corp. v. Niam Pharmaceuticals Inc., 2025 ONSC 2058 (Commercial List) (“Gerges”) at ¶ 54, citing Wasylyk v. Lyft, 2024 ONSC 664 at ¶ 19). The second stage, the statutory exceptions, arises only if those prerequisites are met, and the burden on the exceptions rests on the party resisting arbitration. Peace River also confirmed, at ¶ 42, that competence-competence is not absolute. A court may resolve a jurisdictional challenge itself where the challenge involves pure questions of law, or questions of mixed fact and law requiring only superficial consideration of the record.

The scope of the arbitration clause

Shareholder cases are usually decided on the scope question, and the Court of Appeal’s decision in Woolcock v. Bushert (2004), 246 D.L.R. (4th) 139 (Ont. C.A.) (“Woolcock”), remains the reference point. Two (2) equal shareholders and directors had a memorandum of agreement, to which the corporation was also a party, submitting “any dispute or controversy … relating to the interpretation or implementation of any provision(s) of this Agreement” to arbitration. One of them was locked out, his remuneration was stopped, and the buy-sell provision was exercised against him. He sued for oppression, wrongful dismissal, inducing breach of contract, punitive damages and a winding-up. The Court of Appeal stayed the entire action. Cronk J.A. held that “relating to” is wide language, that the agreement as a whole governed the organization of the business, the parties’ employment, their remuneration and their shareholdings, and that the parties had therefore agreed that disputes among them were to be resolved by arbitration (Woolcock at ¶¶ 21-25). The wrongful dismissal claim related to the agreement because the position and the compensation flowed from it (¶ 27). The punitive damages claim went with the claims to which it attached (¶ 28). The oppression claims, which arose from the exercise of the buy-sell provision and the exclusion from the company, were arbitrable (¶ 29).

The Court of Appeal in Haas approved that reading at ¶ 29, describing clauses that call for the arbitration of disputes “relating to” an agreement as having been “generously interpreted to enjoy ‘a wide compass’,” an interpretation “consistent with the legislative policy … which favours arbitration over litigation where the parties so provide by agreement.” For the narrower “arising out of or in connection with” wording, the court applies the test adopted from the Alberta Court of Appeal in Kaverit Steel, which asks whether either party relies on the existence of a contractual obligation as a necessary element to create the claim or to defeat it (Haas at ¶ 32, quoting Matrix Integrated Solutions). In a shareholder dispute, that test is almost always met, because the rights the oppressed shareholder says were disregarded are the rights the agreement gave him vis-à-vis his partners.

The same reasoning reaches complaints framed around a party’s conduct as a director or officer rather than as a shareholder. In Blind Spot Holdings Ltd. v. Decast Holdings Inc., 2014 ONSC 1760, [2014] O.J. No. 1300 (S.C.J.) (“Blind Spot”), Brown J. gave no effect to the argument that an arbitration clause in a shareholders’ agreement did not apply because the complaints concerned the respondents’ conduct as officers and directors. The agreement “dealt extensively with the powers of the signatory shareholders and their principals as officers and directors of the Company, so complaints about the exercise of those powers, including ones couched in the language of the oppression remedy under OBCA s. 248,” arguably constituted disputes relating to the implementation of the agreement (Blind Spot at ¶¶ 10 and 28, as quoted in McGuinness and Coombs, Canadian Business Corporations Law, 4th ed., vol. 3 (“McGuinness”) at ¶ 23-713).

The arbitrability of oppression claims

Shareholders, and some of their counsel, often believe that an oppression claim is a creature of statute that belongs to the court and cannot be sent to a private tribunal. Ontario law rejected that belief in 2000 and has not wavered since. In Armstrong v. Northern Eyes Inc. (2000), 48 O.R. (3d) 442 (Div. Ct.), aff’d [2001] O.J. No. 1085 (C.A.) (“Armstrong”), the Divisional Court held that shareholders may by agreement choose arbitration as the sole means of resolving their disputes and, absent extraordinary circumstances, oust the court’s oppression jurisdiction in the process (Armstrong at ¶ 22). The court restated the strong public policy that parties be held to their arbitration agreements (¶ 25). It declined to import the residual discretion that governs labour arbitration under Weber, because a voluntary private arbitration regime is a different thing, and it found no deprivation of an ultimate remedy where the arbitrator could give an appropriate one (¶¶ 29-36).

Woolcock then settled the point at the Court of Appeal. The respondent relied on Deluce, where Blair J. had refused to stay an oppression application in circumstances the court treated as exceptional. Cronk J.A. held that “the fact that part of the dispute among the parties involves oppressive conduct does not preclude resort to arbitration where the dispute is captured by an arbitration agreement” (Woolcock at ¶¶ 30-33). The leading text states the rule in the same terms. The issue “is not the nature of the complaint (e.g., oppression as opposed to tort or breach of contract), but rather whether the complaint in issue is within the fair scope of the arbitration agreement” (McGuinness at ¶ 23-712).

The limit on the foregoing is narrow. An arbitration clause covering claims arising under a shareholders’ agreement does not reach oppression claims that do not depend on that agreement. Therefore, where the complaint involves expectations arising apart from the agreement, the court may refuse the stay (McGuinness at ¶ 23-713, citing Bouchan v. Slipacoff (2009), 94 O.R. (3d) 741 (S.C.J.)). It is our position that, in a closely held company whose shareholders’ agreement governs management, employment, remuneration, share transfers and exit, that category is small. The reasonable expectations an oppression claim protects are, for the most part, the expectations the agreement recorded.

The non-signatory corporation and the respondent who litigated first

The 2025 Commercial List decision in Gerges, affirmed by the Divisional Court in 2026 ONSC 1720, shows two (2) limits on the clause.

The first limit is the corporation itself. Two (2) equal shareholders of a pair of pharmacies had unanimous shareholders’ agreements with arbitration provisions requiring “any dispute or difference between the Shareholders” to be arbitrated, and “Shareholder” was defined to exclude the corporation. When one of them applied for leave under s. 246 of the OBCA to bring derivative actions in the names of the pharmacies, the other argued that the proposed actions had to be arbitrated. Dietrich J. held that claims brought on behalf of the corporations did not, on the face of the clause, fall within a provision confined to disputes between the shareholders, and that the third Peace River prerequisite was therefore not met (Gerges at ¶¶ 51-60). The Divisional Court agreed, observing that the argument “ignores that shareholders and corporations are separate entities” (2026 ONSC 1720 at ¶¶ 41-45). A related holding company with no shareholders’ agreement at all was not bound by anything either. Competence-competence did not assist the argument, because the question could be answered on the face of the agreements. Therefore, if the corporation is to be bound, it signs the agreement, and the clause says so.

The second limit is waiver. The respondents in Gerges never brought a s. 7 motion. They accepted service, delivered responding materials, attended a case conference, consented to an order, participated in cross-examinations and raised the clause for the first time in their factum. The court applied Azam v. Multani Custom Homes Ltd., 2022 ONSC 6536, for the proposition that a party who is aware of an arbitration provision and yet fully and actively participates in the court process has waived its right to rely on the provision and has attorned to the court’s jurisdiction (Gerges at ¶¶ 56-58; 2026 ONSC 1720 at ¶¶ 47-49). The fourth technical prerequisite (i.e., that the moving party has not taken a step in the proceeding) exists for this reason, and paragraph 4 of s. 7(2) of the Act, undue delay, is the statutory form of the same idea. In that regard, the party who wants arbitration moves for the stay before it defends on the merits, and says so in its first communication with the other side. A party cannot reliably recover the clause after six (6) months of litigating as if it did not exist.

The arbitration provisions in Gerges expressly preserved the parties’ right to go to court for the detention, preservation and inspection of property and for interim injunctions, and counsel conceded that the application for a court-appointed inspector was outside the clause (Gerges at ¶¶ 25 and 28). That tracks s. 8 of the Act, which keeps the court’s powers over interim injunctions, the preservation of property and the appointment of receivers available in aid of an arbitration. A shareholder who needs a Mareva order or an inspector on a Friday afternoon is not kept out of court by the clause, and a well-drafted clause says so.

Allegations of fraud and claims in tort

The other route around an arbitration clause is to plead that the agreement was induced by fraud, or to frame the claim in tort. Haas closed both routes. Mr. Haas said he had been induced to invest in a restaurant venture by fraudulent misrepresentations about its projected return, its management and its capitalization, and that his claims in deceit and negligent misrepresentation fell outside the shareholders’ agreement. The motion judge agreed with him. The Court of Appeal reversed and identified three (3) errors. The motion judge had assumed that tort claims fall outside an arbitration agreement, had assumed that a fraud claim vitiates the agreement, and had failed to advert to the law’s policy of enforcing arbitration agreements and letting arbitrators decide the scope of their own authority (Haas at ¶ 31). Most of the alleged misrepresentations, on examination, were complaints about the other parties’ performance of their obligations under the agreement (¶ 26). Allegations of fraud do not take the dispute away from the arbitrator; indeed, the court held that “in cases involving arbitration agreements, fraud does not necessarily vitiate everything. It is a matter of interpretation” (¶ 39), and that the court “should lean against a result that undermines arbitration agreements” (¶ 36).

Haas also answered the argument that an awkward appointment mechanism makes the clause invalid under paragraph 2 of s. 7(2) of the Act. A clause drafted for two (2) parties that had to accommodate several was not inoperable, because the fallback appointment by a Superior Court judge still worked (¶¶ 46-49). A motion for a partial stay under s. 7(5) is also premature until the arbitrator has decided jurisdiction (¶ 44).

The arbitrator’s remedial powers

The remedial question should concern a shareholder more than any of the foregoing. Section 248(3) of the OBCA allows the court to make any order it thinks fit, and it lists more than a dozen, including orders restraining the conduct complained of, amending the articles or a unanimous shareholder agreement, directing the corporation or another person to purchase the complainant’s shares, compensating an aggrieved person, varying or setting aside a transaction, and winding the corporation up. An arbitrator is not a court. Can an arbitrator make those orders?

The Act answers part of the question. Section 31 directs the tribunal to decide the dispute “in accordance with law, including equity,” and provides that the tribunal “may order specific performance, injunctions and other equitable remedies.” Section 50(7) deals with the case where an award gives a remedy the court would not grant in similar circumstances. The court may grant a different remedy requested by the applicant, or remit the award to the tribunal for a different remedy, and enforcement is not refused on that ground. The practice answers the rest. Arbitrators in shareholder disputes do find oppression, fix the fair value of the shares and order compensation, and the courts enforce the result. In Chemical Vapour Metal Refining Inc. v. Terekhov, 2018 ONSC 7037 (Commercial List) (“Chemical Vapour”), the oppression, alter ego and fraudulent conveyance claims had been referred to an arbitrator by a consent order made when the company’s side moved to stay the shareholder’s action under the clause in the shareholders’ agreement. The arbitrator found that the principal had misrepresented the state of the company’s affairs, treated a shareholders’ resolution as a sham, found him personally liable as a director for the oppression and awarded damages equal to the fair value of the shares, roughly US$995,000. Hainey J. dismissed the application to set the award aside and enforced it. His Honour noted that by consenting to the referral the applicants had submitted to the arbitrator’s jurisdiction, and that the court will not entertain jurisdictional objections that were not raised, or not raised properly, before the arbitrator (Chemical Vapour at ¶¶ 21 and 25-30).

The older cases carry a caution, and it is the reason we draft the clause the way we do. In Armstrong, the arbitrator had ruled that the oppression remedy is a statutory rather than an equitable remedy, and that without words in the shareholders’ agreement conferring the power, he could not grant s. 248 relief (Armstrong at ¶ 11). The Divisional Court held the shareholder to the arbitration agreement in the circumstances, on the basis that the arbitrator could give an appropriate remedy within his mandate. McGuinness contemplates the same gap, noting that oppression relief may still be sought from the court once the arbitrator has made the necessary findings of fact, “where intervention by a court is necessary to obtain a remedy that an arbitrator cannot award” (McGuinness at ¶ 23-712). A two-stage proceeding of that kind doubles the cost and the delay. The way to avoid it is to state in the clause that the tribunal may grant any relief the Superior Court could grant under s. 248 of the OBCA, including a buy-out at fair value, compensation and rectification of the corporate records, and, if the clause is silent, to agree the point on the record at the first procedural conference. An objection to the tribunal’s jurisdiction must be made no later than the beginning of the hearing, and an objection that the tribunal is exceeding its authority must be made as soon as the matter is raised (s. 17(3) and (5) of the Act). As such, a party that sits silent through the hearing and complains about the remedy afterwards will get nowhere.

Practical considerations

For the shareholder who has been locked out, the clause is a choice of forum that was made for him when the business was formed, and in our experience it is often the better forum for the dispute he now has. A commercial arbitrator with corporate experience can be appointed within weeks. The hearing can be scheduled within months rather than years. The proceeding is private, which is important when the business has customers and lenders watching. The tribunal can order the same buy-out the court would order, provided the point is settled early. Interim relief from the court remains available. What the clause takes away is the ability to run the dispute in the Superior Court as an application with a public record and a right of appeal, and a shareholder who wants those things should negotiate them out of the agreement before signing it. Litigating around the clause afterwards rarely works.

For the shareholder on the receiving end of an application, the advice concerns timing. The stay motion is brought first, before any step on the merits, and the letter that accompanies it says that the respondent is proceeding under the arbitration agreement and will treat the court proceeding as stayed. The motion should also deal with the parts of the claim that are outside the clause, if any, by asking for a partial stay under s. 7(5) or by inviting the applicant to agree that everything go to the arbitrator. A respondent who delivers a statement of defence, attends a cross-examination and then discovers the clause has, in all likelihood, lost it.

For both sides, the agreement itself deserves a careful reading before anyone sues. The questions are (i) who the parties are, and whether the corporation is one of them; (ii) what words define the scope, and whether they reach claims against the other side as directors and officers; (iii) whether the clause carves out injunctions, receivers and inspectors; (iv) whether the clause confers the s. 248 powers on the tribunal; and (v) whether it excludes or widens appeals under s. 45 of the Act. Each of those answers changes the strategy, and the time to learn them is before the application is issued.

How we can help

Grigoras Law acts for shareholders, directors and corporations in oppression and shareholder disputes, in the Superior Court and before arbitral tribunals seated in Toronto. We bring and resist stay motions under s. 7 of the Act, act as counsel through the arbitration itself, and apply to enforce or set aside the award at the end. If your shareholders’ agreement has an arbitration clause and the relationship has reached the point where someone is going to sue, the forum question should be answered at that juncture, before the first document is filed. Our arbitration practice and our shareholder disputes practice are described on the pages linked here, and the guide to what happens when a commercial dispute starts covers the first weeks. For the clause itself, our page on shareholder agreements covers the arbitration provision alongside the other terms. For a matter of your own, the intake form is the way to reach the firm.

This article is general information about the law of Ontario as of October 2026 and is not legal advice. Every dispute turns on the words of the particular agreement and on the facts, and the stay decision under s. 7(6) of the Act cannot be appealed, so the forum question deserves advice before any proceeding is commenced.

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