Arbitration Agreement.[1]  The undersigned agree that in the event any dispute, controversy, claim, question or difference (a “dispute”) shall arise out of or relating to this Agreement or the breach, termination or invalidity thereof, the Parties hereto shall use their best endeavours to settle such dispute.  They shall consult and negotiate with each other, in good faith and considering their mutual interests, to reach a just and equitable solution satisfactory to both Parties.  If they do not reach a solution within a period of thirty (30) days, then upon notice by either Party to the other, the disputes shall be finally resolved by arbitration in accordance with the provisions of the Arbitrations Act (Ontario) (the”Act”), and the following provisions shall apply to the arbitration:

 

(a)                Either party may commence the arbitration by notice demanding arbitration of the disputes which shall be submitted to a single arbitrator who shall be Werner Keller.[2] However, if he does not accept the appointment, then the parties may agree upon another arbitrator, or either party may apply to the court to appoint the arbitrator.  The parties acknowledge that each party is directly liable to the arbitrator to pay one-half of his fees and disbursements; however, the arbitrator may, in awarding costs, order one party to reimburse the other party for part or all of that party’s shares of the fees and disbursements of the arbitrator;[3]

 

(b)               We agree to abide by and perform all directions and awards given and made by the arbitrator, and judgment may be entered in any court having jurisdiction to enforce such decisions. The parties agree that such decisions of the arbitrator are final and binding and no appeal to a court is allowed on any grounds including any question of law, except as provided in sections 46 and 48 the Act.[4] Thus, the disputes shall not be made the subject matter of any action in any court by either Party unless the dispute has been first submitted to arbitration and finally determined by the arbitrator.  Any such action commenced thereafter shall only be for the purpose of enforcing the decision of the arbitrator.  In any such action, the decision of the arbitrators shall be conclusively deemed to determine the rights and liabilities as between the Parties to the arbitration in respect of the matters in dispute;

 

We agree that the arbitration proceedings shall not be open to the public or the media, and further agree that the proceedings shall only be attended by persons whose presence, in the opinion of the arbitrator is reasonably necessary for the proceedings. All evidence presented, documents produced and submissions made in the arbitration proceedings shall be kept confidential,[5] and the parties further agree to keep the outcome of the arbitration strictly confidential, except as may be necessary to implement or enforce the arbitrator’s award or as required by applicable laws or by order of the court.

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[1] This agreement takes much of a court’s usual jurisdiction and assigns it to an arbitrator with limited court intervention because arbitration can resolve disputes more efficiently, and thus more economically and quickly.

[2] The parties can choose an arbitrator with necessary experience. In court, the assigned judge may be unfamiliar with the business or technical issues; thus, potentially increasing the risk of unpredictable outcomes.

[3] Typically, arbitrators require the payment of a retainer at the beginning of the arbitration process.  Parties do not pay the court for the judge’s time.

[4] One advantage of arbitration is that you can, by contract, significantly reduce rights of appeal.  The Arbitration Act provides that you may not contract out of the right of a party to bring an application for judicial review; however the grounds are quite limited to issues like exceeding jurisdiction under the arbitration agreement or bias or unfair or unequal procedural treatment by the arbitrator or an award obtained by fraud.

[5] With limited exceptions, court proceedings are open to the public and not confidential.  By using this arbitration agreement, parties can keep the dispute resolution private, thereby preserving economic interests and business relationships.  Expanding the scope of potential appeals to court would reduce confidentiality and privacy protection available through arbitration.

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