What happens if a matter is litigated and, at some time during the litigation, a party realizes that there is an arbitration clause that may apply to the matter being litigated?
Surprisingly this is not a matter dealt with significantly in case law.
Today's Superior Court decision in
Engels v. Merit Insurance Brokers Inc., 2007 CanLII 6455 dealt squarely with this question. In Engels, the defendant had filed a notice of intent to defend and served a jury notice and then sought to rely on an arbitration clause to stay the litigation.
Subsection 7(2) of the Arbitration Act, 1991, S.O. 1991, c. 17, provides that the court may refuse to stay the proceedings where the motion was brought with undue delay. This suggests that a party who relies on an arbitration clause should advance that position at the earliest possible opportunity.
The Court found that the clause in this matter was not to be enforced writing:
"It is not appropriate to ride the litigation horse down the road until it become inconvenient to do so and then try to mount the arbitration horse. "
James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4
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