“The Arbitration Act entrenches the primacy of arbitration proceedings over judicial proceedings once the parties have entered into an arbitration agreement: Cityscape Richmond Corp. v. Vanbots Construction Corp. 2001 CanLII 24155 (ON CA), [2001] O.J. No. 648, at para 19 (“Cityscape”); Haas v. Gunasekaram, 2017 ONCA 744, at para 12 (“Haas”); and TELUS Communications Inc. v. Wellman, 2019 SCC 19, at 63. Arbitration clauses are to be given a large, liberal and remedial interpretation to effectuate the dispute resolution goals of the parties: Ibid, at para 19.
The courts have limited ability to intervene in disputes that fall under the Arbitration Act, as provided for in Section 6 of the Act which states that:
6. No 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 and unfair treatment of parties to arbitration agreements; and
4. To enforce awards.
As held by Trafford, J. in Cityscape,
“this legislation provides a forceful statement signalling a shift in public policy and attitude towards the resolution of disputes in civil matters through consensual dispute resolution mechanisms. See Ontario Hydro v. Dennison Mines Limited, [1992] O.J. No. 2948 (Blair, J.). The Act is designed to encourage parties to resort to arbitration as a method of resolving their disputes in commercial and other matters and to required them to hold to that course once they have agreed to do so….
Section 8(2) of the Act empowers the arbitral tribunal to determine any questions of law that arise during the arbitration. Section 17(1) of the Act empowers the tribunal to decide questions of its own jurisdiction including questions respective the existence or validity of the arbitration agreement itself. Section 31gives the tribunal broad powers to decide disputes in accordance with the law and equity and makes reference to the power to order specific performance, injunctions and other equitable remedies.
Similarly, the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, noted that s. 6 of the Arbitration Act, “signals that courts are generally to take a “hands off” approach to matters governed by the Arbitration Act.”
Section 7(1) of the Arbitration Act directs courts to give effect to arbitration agreements. This section of the Act sets the general rues that the court “shall” stay a proceeding covered by an arbitration agreement. Section 7(1) provides:
“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”. [emphasis added]
Subsection 17(1) of the Arbitration Act bestows upon arbitral tribunals the power to determine any questions as to the existence and validity of the arbitration agreement, also known as the principle of competence-competence: Section 17(1) of the Arbitration Act states, (1) “An 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; (2) if 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 valid.” This section of the Act reinforces the legislation’s clear intent to promote and support arbitration clauses.
As set out in Haas, the analytical framework following by courts in determining whether a stay under Section 7 of the Arbitration Act ought to be ordered, is as follows:
1. Is there an Arbitration Agreement?
2. What is the subject matter of the dispute?
3. What is the scope of the arbitration agreement?
4. Does the dispute arguable fall within the scope of the arbitration agreement?
5. Are there grounds on which the court should refuse to stay the action?”