When Is Arbitration Available?
An agreement to refer or submit disputes to arbitration may be made before a dispute arises or after a dispute has arisen.
Arbitration Clause and Standalone Agreement to Submit Disputes to Arbitration
An agreement to arbitrate typically appears as an arbitration clause in a contract in relation to which a dispute has arisen. However, resolving disputes by arbitration may be possible even if the parties have not included an arbitration clause in the contract – if they agree to submit disputes to arbitration by a standalone arbitration agreement.
This way the parties to a dispute can agree to submit a dispute to arbitration even if they did not include an arbitration clause in the contract, if any, in dispute. This option provides the parties with the advantages of arbitration as a presumptively private and confidential, efficient, faster and therefore less expensive way to resolve disputes.
Statutory Authority for Standalone Arbitration Agreement
This standalone agreement to submit disputes to arbitration is recognized by stature in Ontario in both the Arbitration Act, 1991, S.O. 1991, c. 17 and the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5, and in Canada under the Commercial Arbitration Act R.S.C., 1985, c. 17 (2nd Supp.)
In particular:
-subsection 5(1) of the Arbitration Act provides:
5 (1) An arbitration agreement may be an independent agreement or part of another agreement. 1991, c. 17, s. 5 (1).
– Chapter II. Arbitration Agreement, Article 7 of each of the International Commercial Arbitration Act and, with minor modification, the Commercial Arbitration Act, since both incorporate the UNCITRAL Model Law, provide:
Definition and form of arbitration agreement
(1) “Arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
Choosing to Arbitrate
So, when faced with disputes, parties can in almost all instances, agree to submit their disputes to arbitration, even when an arbitration clause was not included in the underlying contract, if any. Existing litigation can be moved to arbitration by the agreement of the parties.
If you are seeking the appointment of an arbitrator for a commercial, business, contract, franchise, distribution, construction, employment, reinsurance dispute, please contact the Arbitrator’s Assistant at Gilbertson Davis LLP Arbitration and Mediation Chambers, at info@gilbertsondavis.com or by telephone on 416979 2020, extension 238.
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