Arbitration not blocked because agreement giving basis to arbitration challenged

Kolios v. Vranich, 2012 ONCA 269 holds an arbitrator 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:

[1]          The appeal challenges the decision of the motion judge dismissing the appellants' motion to stay the respondents' litigation on the basis that certain shareholder agreements contained a clause providing for arbitration of all disputes.  In our view, the appeal must be allowed and the respondents' litigation stayed pursuant to s. 7(1) of the Arbitration Act, S.O. 1991, c. 17, which 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 a motion of another party to the arbitration agreement, stay the proceeding.

[2]          The respondents resist arbitration arguing that the parties never reached an agreement concerning the contents of Schedule G (Shareholder Loans) to the shareholder agreements.  In their view, the parties never reached an agreement, including any arbitration agreement. 
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[6]          Third, s. 17(1) of the Arbitration Act provides that "[a]n 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."