On a recent motion before the Court of Appeal in Paulpillai Estate v. Yusuf, 2020 ONCA 655 (CanLII), Jamal J.A. clarifies that a party needs to bring a motion if it wants the proceeding to be referred to arbitration.
In the underlying decision, Paulpillai v. Yusuf, 2020 ONSC 851 (CanLII), the motion judge noted that the responding parties “have maintained in their affidavit evidence that the matter should have proceeded by way of arbitration, but at no time did they bring a motion seeking to stay these proceedings or to compel the Applicants to proceed by way of arbitration”. Accordingly, the motion judge found that the responding parties have waived their right to seek to have the issues in the action determined by way of arbitration.
In agreement with the motion judge, Jamal J.A., writing for the Court of Appeal, clarifies that, even though (a) there was an arbitration clause in the underlying partnership agreement in dispute and (b) the responding parties maintained in their affidavit material that the matter should have proceeded to arbitration, unless there is a motion before the court seeking to stay a proceeding or to compel the parties to proceed by way of arbitration, a judge will not refer the proceeding to arbitration.
In citing the motion judge, the Court of Appeal concurs that section 7(1) of the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Act”) makes it clear that an action can only be stayed by way of a motion. Therefore, if you wish for your matter to proceed by way of arbitration, you need to actually bring a motion for such relief. Stating that the matter should proceed to arbitration in your motion record is not enough. Do not just assume that a court will stay the proceeding for you, you have to bring the motion to stay!
The Court of Appeal further opines that even if a motion judge refuses to stay the court proceeding and refer the matter to arbitration, an appellate court would lack jurisdiction to hear the appeal because of section 7(6) of the Act. Therefore, appealing such decisions is futile.
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