Is the arbitrator's decision final and binding?

Region: Ontario Answer # 501

In an arbitration, the disputants present their case or cause before an arbitrator who is a neutral third party. The arbitrator makes a decision as to who is right or wrong and what relief will be awarded to the aggrieved party. Although a decision or award of an arbitrator is usually binding and enforceable, as would be a court order, it is important to consult the appropriate legislation. The three sources of legislation that may apply are:

  1. Provincial domestic arbitration legislation;
  2. International commercial arbitration legislation, or
  3. Federal commercial arbitration legislation.

In Ontario, domestic arbitration legislation allows for appeals. Also, a party can apply to a court to have an arbitration award set aside if:

  • A party entered into the arbitration agreement while under a legal incapacity;
  • The arbitration agreement is invalid or has ceased to exist;
  • The 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 composition of the tribunal was not in accordance with the arbitration agreement;
  • The subject matter of the dispute is not capable of being the subject of arbitration under Ontario Law;
  • 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;
  • The procedures followed in the arbitration did not comply with the Arbitration Act;
  • An arbitrator has committed a corrupt or fraudulent act or there is a reasonable apprehension of bias;
  • The award was obtained by fraud; or
  • The award is a family arbitration award that is not enforceable under the Family Law Act.

Sometimes, however, the parties may wish to go through a process similar to an arbitration process but do not wish the decision of the arbitrator to be final and binding. In such cases, the goal is to have the neutral third party make a non-binding assessment of each party’s respective rights and make an evaluation of the compensation. In such cases, it is probably best to refer to the process as an “evaluation” rather than an arbitration; and to refer to the individual making the evaluation as a neutral third party rather than an arbitrator. Avoiding the words “arbitration and arbitrator” will help to avoid misunderstanding or being drawn inadvertently into some legislative arbitration framework.

In the case of an evaluation, the parties usually present written material and documents to the neutral “evaluator” for his or her review. The evaluation is non-binding and is usually used to assist the parties in reaching a settlement.

It should be understood that there are no limits to the design of dispute resolution processes. While one may be called an arbitration and another an evaluation or assessment, in fact, upon closer scrutiny, they may not differ much from one another except for the fact that in the former case the decision is binding and in the latter it is not.

For legal assistance with an arbitration, you should consult a lawyer.



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