CITATION: Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership,  
2022 ONSC 894  
COURT FILE NO.: CV-20-637621-0000  
DATE: 20220208  
ONTARIO  
SUPERIOR COURT OF JUSTICE  
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BETWEEN:  
ELECTEK POWER SERVICES INC.  
Applicant  
Alan Mark and Christopher I.R. Morrison,  
for the Applicant  
- and –  
Pam Pengelley for the Respondent  
GREENFIELD ENERGY CENTRE  
LIMITED PARTNERSHIP  
Respondent  
) HEARD: January 12, 2022  
PERELL, J.  
REASONS FOR DECISION  
Table of Contents  
A.  
B.  
C.  
D.  
E.  
Introduction and Overview .................................................................................................. 2  
Methodology........................................................................................................................ 4  
Procedural Background........................................................................................................ 4  
Standard of Review.............................................................................................................. 5  
Evidentiary Background ...................................................................................................... 7  
The Witnesses and the Evidentiary Record ......................................................................... 7  
The Lost Videorecording..................................................................................................... 9  
Factual Background ........................................................................................................... 10  
The Contractual Relationship between Greenfield and Electek ........................................ 10  
The Incident ....................................................................................................................... 17  
The Submission to Arbitration........................................................................................... 18  
F.  
2
The Arbitrators’ Decision .................................................................................................. 19  
The Jurisdiction of Arbitrators........................................................................................... 21  
Introduction........................................................................................................................ 21  
Contract Formation ............................................................................................................ 21  
The Procedural Jurisdiction to Determine the Arbitrator’s Jurisdiction............................ 24  
(a) Stay Motions............................................................................................................... 24  
(b) Declarations and Injunctions pursuant to s. 48 of the Arbitration Act, 1991 ............. 27  
G.  
(c) Application for Interpretation under Rule 14.05(3)(h) of the Rules of Civil Procedure  
27  
(d) The Appointment of Arbitrator(s) .............................................................................. 28  
(e) Section 17 (8) Application.......................................................................................... 28  
(f)  
Section 46 Application ............................................................................................... 29  
(g) Appeals ....................................................................................................................... 30  
The Competence-Competence Principle............................................................................ 31  
The Substantive Law about the Jurisdiction of Arbitrators to Decide Disputes................ 32  
(a) Introduction ................................................................................................................ 32  
(b) The Existence of an Arbitration Agreement............................................................... 34  
(c) The Legality of the Arbitration Agreement................................................................ 34  
(d) The Independent Agreement Principle....................................................................... 35  
(e) The Interpretation of Arbitration Agreements............................................................ 37  
Critique of the Arbitration Panel’s Decision ..................................................................... 38  
Is There a Binding Arbitration Agreement between Greenfield and Electek? .................. 40  
Summary and Conclusion.................................................................................................. 45  
H.  
I.  
J.  
A. Introduction and Overview  
Electek Power Services Inc. (“Electek”) brings an application pursuant to s.17(8) of the  
Arbitration Act, 1991.1 Electek seeks an Order setting aside a preliminary question” decision by  
a panel of Arbitrators. As an answer to a preliminary question, the Arbitrators decided that they  
had jurisdiction to decide the dispute between Electek and Greenfield Energy Centre Limited  
Partnership (“Greenfield”). Electek applies to have the Arbitrators’ decision set aside.  
1 S.O. 1991, c. 17.  
 
3
By way of overview, the problem in the immediate case arises in the following way:  
a.  
In 2009, in the context of making a sales pitch to provide goods and services to  
Greenfield, which operates an electricity power plant for industries in Sarnia, Ontario,  
Electek, which operates a high voltage equipment business in Sarnia, signed a document  
entitled “Purchase Order General Terms and Conditions” (“POGTC”). The POGTC  
contains an arbitration agreement.  
b.  
No purchase orders were issued by Greenfield in 2009, and the first purchase order  
occurred in 2011. Hundreds of purchase orders followed.  
c. In the contracting that occurred after 2011, Greenfield made its purchases of goods  
and services from Electek: (a) by issuing a Purchase Order that does not annex the  
POGTC; and (b) by signing Electek’s Timesheet, which includes terms and conditions of  
sale. Greenfield’s Purchase Orders state that the purchase order is governed by the “Terms  
and Conditions already agreed upon between the parties of this purchase order.” The  
Electek Timesheets, unlike the Greenfield Purchase Orders, does annex the terms and  
conditions of sale.  
d.  
Sometimes, Greenfield’s Purchase Orders were issued before the goods and  
services were supplied. Other times, the Purchase Orders were issued after the goods and  
services were supplied. In any event, Electek’s Timesheet was always signed. Electek’s  
Timesheet includes a provision that states: “by approving this project Timesheet, you  
agree that you have read, understand, and accept [Electek’s] terms and conditions.”  
Electek’s terms and conditions do not include an arbitration agreement.  
e.  
In the contracting that occurred after 2011, Electek had forgotten about the 2009  
POGTC. In contrast, Greenfield remembered the POGTC and believed that it governed  
the relationship between the contracting parties. Subjectively, after 2011, the parties’  
subjective contractual intention was that of ships passing in a foggy night. The ultimate  
legal problem of the immediate case is whether - objectively - the arbitration agreement  
in the POGTC governed the contractual relationship between the parties.  
f.  
In 2018, Electek was hired to provide emergency services on transformer GSU #3  
at Greenfield’s electricity power plant. Electek provided the services, then Greenfield  
signed an Electek Timesheet, issued a Purchase Order, and received an invoice from  
Electek for $49,720.  
g.  
Electek’s work is alleged to have caused $10 million of damages to Greenfield’s  
power plant. In 2020, Greenfield claimed compensation from Electek. Greenfield  
submitted the dispute to arbitration. Electek disputed the submission to arbitration.  
Electek asked the Arbitrators to answer a preliminary question about their jurisdiction. In  
2021, the Arbitrators unanimously held that they had jurisdiction to decide the dispute.  
h.  
The Arbitrators treated the arbitration provision in the POGTC as a separate  
contract from the contract in which it was imbedded. The Arbitrators decided that the  
2009 POGTC arbitration provision was a valid submission to arbitration to govern the  
dispute about the 2018 contract for goods and services. Otherwise, the Arbitrators  
expressly did not decide what terms and conditions applied to the 2018 contract for goods  
and services that is the subject of the dispute between Greenfield and Electek.  
This is a hearing de novo. For the reasons that follow, I set aside the Arbitrators’ decision.  
4
B. Methodology  
Electek’s application pursuant to s.17(8) of the Arbitration Act, 1991 raises complex legal  
problems. My methodology for solving those legal problem is as follows:  
First, I shall describe the procedural background to the application now before the court.  
Second, I shall discuss, the manner of exercising my own jurisdiction on this application.  
I shall explain why the immediate application is a de novo hearing of the evidence that was  
before the Arbitrators.  
Third, I shall describe the evidentiary background, and I shall address a problem about a  
lost videorecording of the testimony at the arbitration hearing.  
Fourth, I shall discuss the factual background. I shall describe: (a) the history of the  
contracting between Greenfield and Electek; (b) the incident that gave rise to the dispute  
between the parties; (c) the chronology of the submission to arbitration; and (d) the  
Arbitrators’ decision.  
Fifth, I shall analyze and explain the law about the jurisdiction of arbitrators including: (a)  
the general principles of contract formation; (b) the procedural law associated with an  
arbitrator’s jurisdiction; (c) the competence-competence principle; and (d) the four critical  
substantive law principles about the jurisdiction of arbitrators that will be determinative of  
the jurisdictional problem of the immediate case.  
Sixth, I shall critique the decision of the Arbitrators in the immediate case.  
Seventh, I shall apply the law about the jurisdiction of arbitrators to the facts of the  
immediate case and answer the question of whether there is a binding arbitration agreement  
between Greenfield and Electek and whether the Arbitrators had jurisdiction to decide the  
dispute between the parties.  
Eighth, I shall summarize and conclude this decision.  
C. Procedural Background  
The procedural background to the application now before the court is the following.  
On February 6, 2020, Greenfield delivered a Notice of Arbitration.  
In February 2020, Electek delivered a Response to Arbitration Application.  
On March 6, 2020, Electek commenced an Application in the Superior Court pursuant to  
s.48 of the Arbitration Act, 1991 for a declaration that the arbitration commenced by Greenfield is  
invalid.  
On March 16, 2020, Electek brought a motion in the Superior Court for an order for an  
interim stay of the arbitration until the hearing of Electek’s application pursuant to s.48 of the  
Arbitration Act, 1991.  
On June 15, 2020, while the Court was operating under emergency protocols because of  
the Covid-19 pandemic, Electek sought to schedule its motion for an interim stay of the arbitration.  
Justice Myers made the following endorsement:  
   
5
Counsel concede the matter is not a short application. An urgent hearing is not one for  
which booking in December is sought. The court is not able to hear complex, lengthy  
matters yet [because of the operations protocols of the Covid-19 pandemic] absent urgency.  
The competence-competence principle suggests the panel should rule on its jurisdiction  
without prejudice to Electek’s right to raise the issue thereafter. This is especially the case  
where significant facts are in dispute. There is no short crisp ruling of law that could save  
significant trial expense either here or there. Start there. We’ll be here when you get back.  
In the summer of 2020, Electek asked the Arbitration Panel, which was comprised of Earl  
A. Cherniak Q.C., William G. Horton, and J. Brian Casey, to rule whether the Arbitrators had  
jurisdiction to resolve the dispute between Greenfield and Electek.  
An arbitration hearing took place on February 3, 4, 5, and 8, 2021. It was a Zoom hearing  
recorded by the International Centre for Dispute Resolution (“ICDR”).  
The Arbitrators released their decision on March 5, 2021.  
On August 16, 2021, Electek brought an application pursuant to s.17(8) of the Arbitration  
Act, 1991 for an Order setting aside the Arbitrators’ decision.  
D. Standard of Review  
Electek’s application is brought pursuant to s.17(8) of the Arbitration Act, 1991.  
The parties disagree about the standard of review to be applied by the court on an  
application pursuant to. s.17(8). To resolve this disagreement, it is necessary to consider all of s.17.  
Section 17 states:  
Jurisdiction of Arbitral Tribunal  
Rulings and objections re jurisdiction  
Arbitral tribunal may rule on own jurisdiction  
17 (1) An 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.  
Independent agreement  
(2) If the arbitration agreement forms part of another agreement, it shall, for the purposes of a ruling  
on jurisdiction, be treated as an independent agreement that may survive even if the main agreement  
is found to be invalid.  
Time for objections to jurisdiction  
(3) A party who has an objection to the arbitral tribunal’s jurisdiction to conduct the arbitration  
shall make the objection no later than the beginning of the hearing or, if there is no hearing, no later  
than the first occasion on which the party submits a statement to the tribunal.  
Party’s appointment of arbitrator no bar to objection  
(4) The fact that a party has appointed or participated in the appointment of an arbitrator does not  
prevent the party from making an objection to jurisdiction.  
 
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Time for objections, exceeding authority  
(5) A party who has an objection that the arbitral tribunal is exceeding its authority shall make the  
objection as soon as the matter alleged to be beyond the tribunal’s authority is raised during the  
arbitration.  
Later objections  
(6) Despite section 4, if the arbitral tribunal considers the delay justified, a party may make an  
objection after the time limit referred to in subsection (3) or (5), as the case may be, has expired.  
Ruling  
(7) The arbitral tribunal may rule on an objection as a preliminary question or may deal with it in  
an award.  
Review by court  
(8) If the arbitral tribunal rules on an objection as a preliminary question, a party may, within thirty  
days after receiving notice of the ruling, make an application to the court to decide the matter.  
No appeal  
(9) There is no appeal from the court’s decision.  
In the immediate case, as noted above, after Greenfield commenced an arbitration, Electek  
brought an application to the court to stop the arbitration, but relying on the competence-  
competence principle, Justice Myers suggested that the matter of the arbitrators’ jurisdiction be  
decided by the Arbitrators.  
Electek took up this suggestion, and after four days of argument, the Arbitrators decided  
that they did have jurisdiction. Electek now returns to the court pursuant to s.17(8), to “make an  
application to the court to decide the matter.”  
It is Electek’s submission that the s.17(8) application is a hearing de novo using the  
evidence submitted to the Arbitrators. With one problem, discussed below, about a lost  
transcription of video and audio evidence, Greenfield agrees on the evidentiary record for the  
s.17(8) application. Greenfield, however, submits that the s.17(8) application is in the nature of a  
judicial review application governed by the principles of appellate and judicial review and in  
particular by the principles of judicial review set out by the Supreme Court of Canada in Canada  
(Minister of Citizenship and Immigration) v. Vavilov.2  
Greenfield, however, is incorrect. The case law establishes that s.17(8) of the Arbitration  
Act, 1991 applications and the matching provision under the International Commercial Arbitration  
Act, 20173 are hearings de novo.4  
In this regard, keeping in mind that s.11(1) of Ontario’s International Commercial  
Arbitration Act, 2017 is the same as s. 17(8) of Ontario’s Arbitration Act, 1991, in The Russian  
2 2019 SCC 65.  
3 S.O. 2017, c. 2, Sched. 5.  
4 Hornepayne First Nation v Ontario First Nations (2008) Ltd., 2021 ONSC 5534; The Russian Federation v.  
Luxtona Limited, 2021 ONSC 4604; Lululemon Athletica Canada Inc. v. Industrial Colour Productions Inc, 2021  
BCCA 428  
7
Federation v. Luxtona Limited,5 Justice Corbett stated at paragraph 22:  
22. The court is “to decide the matter” It is not “to review the tribunal's decision". "The matter",  
referenced in both art. 16(1) of the Model Law and s.11(1) of the [International Commercial  
Arbitration Act, 2017] is the issue of the tribunal's jurisdiction. This is clear language conferring  
original jurisdiction on the court to adjudicate the question of the tribunal's jurisdiction. This  
language is not qualified by a privative clause or terms of reference for the application. The court's  
task is entirely described by the phrase “decide the matter”.  
What is now before the court is a normal application under the Rules of Civil Procedure. It  
is not an appeal.  
The only procedural difference about this application is that the appeals from it are  
circumscribed by the appeal provisions of the Arbitration Act, 1991.  
a.  
If a court dismisses an application under the Arbitration Act, 1991: (a) because of  
the competence-competence principle; or (b) because it decides that the arbitrator has  
jurisdiction, then an appeal of that decision is barred by the appeal provisions of the Act.6  
b.  
If a court concludes that a dispute is not subject to arbitration, then an appeal is not  
barred by the appeal provisions of the Arbitration Act, 1991. Where there is no arbitration  
agreement, the Arbitration Act, 1991 has no application, and it follows that if the court  
has decided that the Act is not applicable, then the prohibition against an appeal is equally  
not applicable.7  
Having regard to my decision that there is no arbitration agreement in the immediate case,  
my decision de novo can be appealed.  
E. Evidentiary Background  
The Witnesses and the Evidentiary Record  
The matter now before the court is Electek’s application pursuant to s.17(8) of the  
Arbitration Act, 1991 to set aside the preliminary question decision of the Arbitrators that they had  
jurisdiction to decide the dispute between Greenfield and Electek. The evidence for this application  
is a composite of evidence that was proffered before, during, and after the arbitration hearing.  
As noted above, before the immediate matter, Electek had brought an application pursuant  
5 2021 ONSC 4604 (Div. Ct.).  
6 See sections: 7(2), 10(2), 15 (6), 16(4) and 17(9). Ontario Medical Assn. v. Willis Canada Inc., 2013 ONCA 745;  
Radewych v. Brookfield Homes (Ontario) Ltd., 2007 ONCA 721; SLMSoft.com Inc. v. First Ontario Credit Union  
Ltd., [2003] O.J. No. 912 (C.A.), aff’g [2002] O.J. No. 3984 (S.C.J.) If the court grants a stay pursuant to s. 7 (2) of  
the Arbitration Act, 1991, then an appeal of that decision is barred by s. 7 (6): Toronto Standard Condominium  
Corp. No. 1628 v. Toronto Standard Condominium Corp. No. 1636, 2020 ONCA 612.  
7 Toronto Standard Condominium Corp. No. 1628 v. Toronto Standard Condominium Corp. No. 1636, 2020 ONCA  
612; Haas v. Gunasekaram 2016 ONCA 744; Ontario Medical Assn. v. Willis Canada Inc., 2013 ONCA 745;  
Griffin v. Dell Canada Inc., 2010 ONCA 29, 98 O.R. (3d) 481, leave to appeal refused, [2010] S.C.C.A. No. 75;  
Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642; ,Smith Estate v.  
National Money Mart Co., 2008 ONCA 746, leave to appeal refused, [2008] S.C.C.A. No. 535; Woolcock v.  
Bushert, [2004] O.J. No. 4498 (C.A.); Mantini v. Smith Lyons LLP (2003), 64 O.R. (3d) 505 at para. 17, (C.A.),  
leave to appeal ref’d [2003] S.C.C. No. 344; Huras v. Primerica Financial Services Ltd., [2000] O.J. No. 3772  
(C.A.); Simmons v. London (City), [1997] O.J. No. 3073 (Gen. Div.); Deluce Holdings Inc. v. Air Canada (1992), 12  
O.R. (3d) 131 (Gen. Div.).  
   
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s.48 of the Arbitration Act, 1991 to have the arbitration stopped. Justice Myers declined to stay the  
arbitration even on an interim basis, and Electek asked the Arbitrators to rule on their jurisdiction.  
The parties delivered evidentiary statements for the hearing before the Arbitrators and the  
hearing proceeded as a virtual hearing with four days of examinations and cross-examinations.  
The parties have now returned to this Court, and the evidence for Electek’s application  
pursuant to s.17(8) consists of: (a) the evidence that the parties filed on the initial motion that was  
considered by Justice Myers; (b) the evidence both parties proffered for the hearing before the  
Arbitrators; (c) transcripts and video recordings of the hearing before the Arbitrators; (d) the  
Arbitrators’ decision; (e) several affidavits filed for the purposes of the s.17(8) application; (f) a  
joint documentary brief; and (g) compendia.  
More precisely, the evidence for the application now before the court consists of the  
following:  
a.  
Max Autio provided a Statement dated September 27, 2020. Mr. Autio is a retired  
employee of Greenfield. From 2011 to mid-2013, he was the Chief Operating Engineer  
and Operations & Maintenance Manager at Greenfield. He was employed by the facility  
operator Ethos Energy (then known as Wood Group). He was examined and cross-  
examined at the arbitration hearing.  
b.  
Lynne Ballard provided Statements dated July 23, 2020 and September 27, 2020.  
Ms. Ballard is currently employed by BC Hydro. She is a former employee of Greenfield,  
and she worked for it for seven years between 2007 and 2014. She was Plant Service  
Administrator/Purchaser, with a major role in implementing Greenfield’s procurement  
policies. She was examined and cross-examined at the arbitration hearing.  
c.  
Charles Batrouny provided an affidavit dated September 12, 2021; i.e., after the  
arbitration hearing. Mr. Batrouny is a lawyer with Cozen O’Connor LLP, Greenfield’s  
lawyers. He was in attendance for the four days of hearings before the Arbitrators. He  
was cross-examined on his affidavit for the purposes of the application pursuant to s.17(8)  
of the Arbitration Act, 1991.  
d.  
Hudson Chalmers delivered an affidavit dated August 16, 2021; i.e., after the  
arbitration hearing. Mr. Chalmers is a lawyer with Will Davidson LLP, the lawyers for  
Electek. He was in attendance for the four days of hearings before the Arbitrators. He was  
cross-examined on his affidavit for the purposes of the application pursuant to s.17(8) of  
the Arbitration Act, 1991.  
e.  
Richard Dejonghe delivered a Statement dated July 24, 2020. From September  
2009 to November 2010, he was the Plant Manager at Greenfield, where he was employed  
by the facility operator, Ethos Energy. He was examined and cross-examined at the  
arbitration hearing.  
f.  
Rajesh Desai delivered a Statement dated August 4, 2020. Mr. Desai is a Lead  
Operator at Greenfield, which is to say that he is the operator in charge during a work  
shift. He was examined and cross-examined at the arbitration hearing.  
g.  
Brad Gray delivered an affidavit dated June 11, 2020 and a Statement dated  
August 21, 2020. Mr. Gray was the Chief Operating Officer (“COO”) and Vice President  
of Operations for Electek from 2009 to 2011. He was examined and cross-examined at  
9
the arbitration hearing.  
h. Marinela Kraju delivered an affidavit dated March 16, 2020; i.e., before the  
arbitration hearing. Ms. Kraju is an associate lawyer for Will Davidson LLP, the lawyers  
for Electek.  
i.  
C. David Lamoureaux delivered a Statement dated July 24, 2020. Mr.  
Lamoureaux is the Regional Managing Counsel for Calprine Corporation which along  
with Mitsui & Co. Ltd. own Greenfield.  
j.  
Shane Maddeford delivered an affidavit dated June 12, 2020. Mr. Maddeford is  
Electek’s Director of Technical Services. He performed the work that has given rise to  
the dispute between the parties. He was examined and cross-examined at the arbitration  
hearing.  
k.  
Alex Palimaka delivered an affidavit dated July 6, 2020. He also delivered  
Statements dated August 21, 2020 and October 7, 2020. Mr. Palimaka is Electek’s  
General Legal Counsel. He is also an Electek Vice President. He was examined and cross-  
examined at the arbitration hearing.  
l.  
Lorne Reddy delivered a Statement dated September 30, 2020. Mr. Reddy is the  
Facility Manager at Greenfield, a position he has held since August 2015. He was  
examined and cross-examined at the arbitration hearing.  
m. Tim Valleau delivered Statements dated July 23, 2020 and September 29, 2020.  
Mr. Valleau is the Maintenance and TA Planner at Greenfield’s power plant. He is  
employed by Ethos Energy which operates the plant on behalf of its owners. He was  
examined and cross-examined at the arbitration hearing.  
n.  
Joe Vandenboom delivered Statements dated August 20, 2020 and October 9,  
2020. Mr. Vandenboom was Director of Operations at Electek. Mr. Vandenboom was  
examined and cross-examined at the Arbitration hearing.  
The Lost Videorecording  
As required by the arbitration rules of the ICDR, the hearing was video recorded. For the  
arbitration, each witness produced a sworn statement as evidence-in-chief and they were examined  
and cross-examined at the hearing, which was a videoconference recorded on Zoom.  
However, the recording of February 4, 2021 (Day 2) of the hearing was lost. On that day,  
Mr. Autio for Greenfield, Ms. Ballard for Greenfield, Mr. Maddeford for Electek, and Mr. Valleau  
for Greenfield were examined and cross-examined.  
Mr. Chalmers attended the arbitration hearing as one of the lawyers representing Electek.  
For the purposes of Electek’s application pursuant to s.17(8) of the Arbitration Act, 1991, Mr.  
Chalmers delivered a 114-paragraph affidavit dated August 16, 2021 reporting on the missing  
cross-examination based on his recollection and on notes made at the hearing by him and Electek’s  
lawyers.  
Mr. Batrouny attended the arbitration hearing as one of the lawyers representing  
Greenfield. For the purposes of responding to Electek’s application pursuant to s.17(8) of the  
Arbitration Act, 1991, Mr. Batrouny delivered a 55-paragraph, 20-exhibit affidavit dated  
 
10  
September 12, 2021, amongst other things, reporting on the missing cross-examination based on  
his recollection and on notes made at the hearing by him and Greenfield’s lawyers.  
For the purposes of Electek’s application pursuant to s.17(8) of the Arbitration Act, 1991,  
Greenfield took the position that Mr. Chalmers’ affidavit should be struck as inadmissible hearsay.  
I agree, and, therefore, in reaching my own decision in this matter, I shall not rely on Mr. Chalmers’  
or Mr. Batrouny’s report of the testimony of Mr. Autio, Ms. Ballard, Mr. Maddeford, and Mr.  
Valleau.  
In any event, as the following discussion of the factual background will reveal, what all of  
the witnesses, including Mr. Autio, Ms. Ballard, Mr. Maddeford, and Mr. Valleau, subjectively  
thought: (a) about the contractual intentions of Greenfield and Electek, respectively; and (b) about  
what Greenfield and Electek, respectively, knew or ought to have known about what were the  
terms and conditions of the contract or contracts between Greenfield and Electek misses the point  
that the task for the court is to determine objectively whether a consensus ad idem was reached  
about an arbitration agreement and whether a valid and enforceable arbitration agreement was  
established to provide the Arbitrators with jurisdiction to decide the dispute between Greenfield  
and Electek. The subjective beliefs of the parties’ witnesses are not determinative. Moreover, what  
the documents reveal and what the conduct of the parties revealed is the place to find the objective  
truth in the case at bar.  
F. Factual Background  
The Contractual Relationship between Greenfield and Electek  
Greenfield is an Ontario limited partnership. It carries on business in Ontario operating an  
electricity power plant. It operates a power generating plant in Sarnia, Ontario. The plant, the  
Greenfield Energy Centre, became operational in 2008.  
Electek is an Ontario corporation that services high voltage electrical equipment. It was  
founded by Joe Vandenboom in 2002. In 2007, Electek was purchased by Bluewater Power  
Distribution Co. Mr. Vandenboom became an employee. Brad Gray, Bluewater’s VP of  
Operations became Electek’s COO.  
Greenfield had elaborate and detailed policies and procedures for procuring goods and  
services. Greenfield’s policies and procedures directed that vendors could only become authorized  
to contract with Greenfield if they agreed to Greenfields contractual terms and conditions. Those  
terms and conditions were set out in a document entitled “Purchase Order General Terms and  
Conditions” (“POGTC”).  
Greenfield’s policy was that it would not contract with a vendor unless the vendor had been  
assigned a vendor number and a vendor number would not be assigned unless the vendor had  
signed the POGTC.  
For present purposes the following provisions of the POGTC, which among other things  
included an arbitration agreement, are pertinent.  
   
11  
GEC PURCHASE ORDER GENERAL TERMS AND CONDITIONS  
IMPORTANT READ CAREFULLY  
Definitions  
“Buyer” shall mean the entity identified as such on the face of the purchase order to which these  
terms and conditions are referenced and incorporated into.  
“Purchase Order” shall mean the signatory document that specifies the specific purchase to be made  
by Buyer, all attachments, referenced specifications, and the General Terms and Conditions.  
[…]  
“Seller” shall mean the entity identified as such on the face of the purchase order to which these  
terms and conditions are referenced and incorporated and which will provide or perform the Scope  
of Work.  
"Services" shall mean all services including but not limited to all performances provided and, all  
equipment and material supplied in connection with the Purchase Order.  
“Scope of Work” shall mean the provision of the goods, materials, equipment, parts or services as  
specified in and in accordance with the written purchase order and any attachments or amendments  
and these General Terms and Conditions.  
1. ACCEPTANCE: PURCHASE ORDER CONSTITUTES ENTIRE AGREEMENT  
This Purchase Order constitutes Buyer’s offer and may be accepted by Seller only in accordance  
with the terms hereof. Any acceptance herein of an offer of Seller, or any confirmation herein of a  
prior agreement between Buyer and Seller or any confirmation herein of a prior agreement between  
Buyer and Seller is expressly made conditional on Seller’s agreement to the additional or different  
terms contained herein. Seller may accept this Purchase Order by commencement of Scope of Work,  
shipment of goods, or furnishing of services hereunder. Dispatch of Seller’s acknowledgment form  
or other written document will also act as an acceptance if it agrees with this Purchase Order with  
respect to the description, amount, price and time of delivery of the goods or services ordered.  
Notwithstanding any waiver in any instance, or any oral agreement, or any instructions terms and  
conditions that may be contained in any quotation, acknowledgement, invoice or other written  
document of Seller, no addition to, waiver for the future or modification of, any of the provisions  
herein contained shall be of any force or effect unless made in writing and executed by Buyer.  
2 CHANGES  
[…]  
3. PRICE  
[…]  
4. SHIPPING  
[…]  
5. TIME OF THE ESSENCE  
[…]  
6 DELIVERY/TITLE  
[…]  
7. RIGHT OF INSPECTION AND REJECTION  
[…]  
8. ASSIGNMENT  
[…]  
9. GOVERING LAW  
[…]  
10 WARRANTY  
12  
[…]  
11. PROJECT SITE  
[…]  
12. INVOICES  
[…]  
13.DOCUMENT  
[…]  
14. PATENT INDEMNITY  
[…]  
15. INDEMNITY AND INSURANCE  
[…]  
16. COMPLIANCE WITH LAWS  
[…]  
17. CHEMICAL SUBSTANCE IDENTIFICATION  
[…]  
15 [sic]. SAFETY AND HEALTH PROGRAMS  
[…]  
17. [sic]  
[…]  
18. CONFIDENTIALITY/TRADE SECRETS  
[…]  
19. WAIVER  
[…]  
20. CONSEQUENTIAL DAMAGES  
[…]  
21. DISPUTE RESOLUTION  
The parties agree than any and all disputes or controversies that may arise between the parties arising  
out of or related to this Agreement shall be determined by binding arbitration. Any such arbitration  
shall be determined before the American Arbitration Association (“AAA”) in accordance with AAA  
rules then in effect with each party nominating one arbiter and the two arbiters nominating a third,  
and that any arbitration proceedings shall be held in Toronto, Ontario. Judgment upon arbitration  
awards may be entered in any court, provincial or federal, having jurisdiction.  
22. CURRENCY  
[…]  
The evidence from several of Greenfields employees and from several of Greenfield’s  
authorized vendors revealed that goods and services were provided to Greenfield in accordance  
with the POGTC.  
The evidence from several of Greenfield’s employees and from several of Greenfield’s  
authorized vendors was that an authorized vendor methodology was a custom of the trade in the  
“Chemical Valley” area of Sarnia, which was the location of numerous power generation facilities.  
They testified that the practice of authorizing vendors and of establishing a master contract to  
govern and stipulate the terms and conditions for purchases (purchase orders) was a standard, well-  
known, and routine practice in Sarnia.  
Mr. Palimaka for Electek disagreed about whether master contracts were the custom of the  
trade, and he stated in his reply Statement as follows:  
2. Electek-Sarnia has 78 industrial customers of which we currently have 14 customers with Master  
Service Agreements. All other customers receive our Terms and Conditions with our Quote or  
Timesheet, or they provide a Purchase Order in advance with their own Terms and Conditions. None  
of our customers use the process which Greenfield is alleging was followed in this case, of having  
13  
Electek sign Purchase Order Terms and Conditions and having those Terms and Conditions govern  
the relationship between the parties for an undefined period of time.  
3. The process of contractor qualification for many of our customers is, in fact, managed by third  
party service providers, such as ISNetworld and Avetta. In order to become qualified under either  
program, Electek is required to submit very similar information to that required by Greenfield under  
its Contractor Qualification Package, which is referenced and attached to Exhibit L of Joe  
Vanderboom's [sic] Responding Statement, dated August 20, 2020. At this point in time, 17 of  
Electek's customers use ISNetworld and 6 customers use Avetta for contractor qualification.  
In 2008, Electek approached Greenfield and offered its services. The Plant Administrator  
at the time was Lynne Ballard. In accordance with Greenfield’s policies and procedures, it was  
Ms. Ballard’s routine practice to provide vendors a copy of the POGTC.  
On December 18, 2008 Greenfield and Electek met and although Ms. Ballard was not at  
the procurement discussions, she testified that she told Mr. Vandenboom of Electek that Greenfield  
required purchase orders that were governed by a document entitled Purchase Order General  
Terms and Conditions (POGTC).  
Mr. Vandenboom does not recall the conversation. Mr. Vandenboom and Mr. Gray  
attended the meeting, which was to solicit work for Electek. Neither had any recollection of the  
POGTC being discussed at the initial meeting between Greenfield and Electek. There is no  
evidence that Electek’s terms and conditions for contracting were discussed. The purpose of the  
meeting was to market Electek as a potential supplier of high voltage goods and services to  
Greenfield and the details of the contracting, if any, were left for further discussion.  
After the meeting on December 18, 2008, Shana-Rhea Gould, who is an Operation Project  
Coordinator at Bluewater, sent Ms. Ballard an email message and others at Greenfield additional  
information about Electek, including its standard rate schedule. However, Electek’s terms and  
conditions for contracting were not included in this correspondence.  
At some time in February or March 2009, Greenfield gave Electek a copy of the POGTC.  
Ms. Ballard’s evidence is that Mr. Vandenboom was the intermediary who got the POGTC to Mr.  
Gray and then presumably to Ms. Gould. There is documentary evidence that Ms. Gould reviewed  
the POGTC in February or early March 2009.  
On March 4, 2009, Brad Gray signed the POGTC, and he emailed it to Greenfield. In his  
testimony for the arbitration hearing, he admitted reading the POGTC and having the authority to  
sign it. In 2020, he testified that he could not recall signing the POGTC. His reconstructed thought  
was that he signed the POGTC for anticipated imminent work for a specific job that ultimately  
was not procured. There is no evidence about what that specific project might have been.  
Mr. Vandenboom did not know how or why Mr. Gray signed the POGTC. Mr. Palimaka,  
Electek’s in-house legal counsel, did not know how or why Mr. Gray signed the POGTC. Mr.  
Palimaka did not review it before it was signed. Mr. Palimaka testified that he was not aware of  
the existence of any master contract between Greenfield and Electek.  
There is evidence that Mr. Gray had Ms. Gould review the POGTC before March 4, 2009,  
when it was sent to Greenfield, because she sent the following email message to Mr. Gray on  
March 3, 2009:  
I’ve read through the document. My only concerns are under the Safety & Health Program section.  
It states that if we are found to be non-compliant with their H&S performance requirements that  
14  
work will cease (no big deal) but also that no payment shall be due when we are in non-compliance.  
It also states that we are responsible for occupational health monitoring and sampling to determine  
levels of exposure to our employees. They are also requesting us to carry Disease coverage on our  
insurance for $3M. I am not sure if we carry this coverage now.  
Ms. Gould who is still employed by Bluewater did not provide any evidence for the  
arbitration hearing.  
Electek was not retained for services in 2009, or 2010. There is evidence that in October  
2009, Greenfield bid for a contract to install soft-starters on plant motors (900 hours of work), but  
nothing came of the bid. The bid was prepared by Barbara Fan, an Electek Engineer, who would  
have had to attend at the plant to prepare the bid. Ms. Fan did not provide evidence at the arbitration  
hearing.  
Documentation for other bids for work by Electek between 2002 to 2011 has been lost.  
In 2011, Electek renewed its efforts to market its services to Greenfield. By this time, Mr.  
Gray was no longer at Electek. He ended his employment with Electek in June 2011, but he did  
consulting work for Bluewater from time to time thereafter.  
In the summer of 2011, Mr. Vandenboom contacted Max Autio, Greenfield’s Chief  
Operating Engineer. They met on July 26, 2011, and Electek provided Greenfield with a rate sheet  
upon which there was the notation “all work will be performed in accordance with the terms and  
conditions on the reverse of the Electek customer Timesheet. The Timesheet terms and conditions  
does not include a submission to arbitration provision.  
On August 8, 2011, in response to Greenfield’s invitation to submit a proposal to do work,  
Electek submitted a bid to Ms. Ballard. The bid indicated that work was to be performed in  
accordance with Electek’s standard terms and conditions.  
Around this time, Mr. Palimaka was given a copy of the POGTC with Ms. Ballard’s  
business card attached. He did not recall who gave it to him, but he assumed it was Mr.  
Vandenboom. Mr. Palimaka made some notes on the POGTC. However, claiming solicitor and  
client privilege, Electek did not produce Mr. Palimaka’s annotations on the POGTC. During cross-  
examination, Mr. Palimaka said that Mr. Vandenboom told him that Greenfield’s terms and  
conditions were intended to cover all future work. Unaware of the POGTC signed by Mr. Gray in  
2009, Mr. Palimaka deposed that the POGTC was never signed by Electek after he reviewed it in  
2011.  
The 2011 bid was accepted, and Electek provided services on August 10, 2011. Ms.  
Ballard, whose responsibilities included rejecting contracts that did not include Greenfield’s  
contract terms and conditions, did not reject Electek’s quote and the work went forward. Greenfield  
did not issue a Purchase Order, and it paid for the services in accordance with Electek’s rate sheet  
fees. Electek was not advised that the POGTC applied.  
After 2011, Greenfield issued Purchase Orders without annexing the POGTC. Rather,  
Greenfield issued Purchase Orders that stated in a boxed alert that the Purchase Order was  
governed by the “Terms and Conditions already agreed upon between the parties of this purchase  
order.” Visualize:  
15  
After the 2011 first contracting, Electek continued to provide services to Greenfield. It  
submitted quotes with the notation “all work will be performed in accordance with the terms and  
conditions on the reverse of the Electek customer Timesheet” or similar notation.  
Annually, Electek provided Greenfield with rate sheets, i.e., a price list for Electek’s goods  
and services. The rate sheet set out Electek’s terms and conditions for providing goods and  
services. On its written quotes for work, Electek indicated that its work was performed in  
accordance with Electek’s standard terms and conditions, which were set out in the quote itself.  
Annually, Greenfield provided Electek with a contractor qualification package including  
references to the procurement documents that were to be signed by Electek. There is no reference  
to the POGTC in the qualifications package although some of the procurement documents reflect  
terms of the POGTC. The contracting package itself, however, does not expressly reference the  
POGTC and did not include a copy of it.  
Electek denies that the POGTC was a master contract, and apart from the POGTC, there  
was no master contract between Greenfield and Electek.  
Electek had lost its institutional memory of Mr. Gray signing the POGTC, and on an annual  
basis it provided Greenfield with a rate sheet, a price list for its goods and services. The Timesheet  
noted that all work would be performed pursuant to the “terms and conditions on the reverse side  
of the Electek Customer Timesheet.” Before or after work was performed, Electek would provide  
Greenfield with a Timesheet, Greenfield invariably signed the Timesheets. Electek was told and  
complied with a directive that its invoices refer to Greenfield’s purchase order number.  
For present purposes, the following provisions from Electek’s Terms and Conditions are  
pertinent:  
TERMS AND CONDITIONS  
ELECTEK POWER DISTRIBUTION CORPORATION  
General Terms and Conditions  
The following terms and conditions of sale shall apply to any sale of goods or services by Electek  
Power Services Inc. (hereinafter called "Electek") and acceptance of these terms and conditions is  
an express condition of such sale. Purchaser shall be deemed to have full knowledge of the terms  
and conditions herein and such terms and conditions shall be binding.  
1. GENERAL  
In the event of any conflict or inconsistency between the terms and conditions of sale herein and the  
terms and conditions contained in the Purchaser's order or in any other form issued by Purchaser,  
16  
whether or not any such form has been acknowledged or accepted by Electek, Electek's terms and  
conditions herein shall prevail. No waiver, alteration or modification of these terms and conditions  
shall be binding upon Electek unless made in writing and signed by a duly authorized representative  
of Electek.  
2. QUOTATIONS  
Unless otherwise stated, Electek's quotation shall be null and void unless accepted by Purchaser  
within thirty (30) days from the date of the quotation. All quoted prices are based on the current  
exchange rates, tariffs and costs of manufacture. Unless otherwise stated in the quotation, quoted  
prices are subject to change by Electek with or without notice until Purchaser's acceptance.  
Customary methods of transportation shall be selected by Electek and such transportation will be at  
Purchaser's expense.  
3. TAXES  
[…]  
4. DELIVERY  
[…]  
5. HEALTH AND SAFETY  
[…]  
6. FORCE MAJEURE  
[…]  
7. TITLE  
[…]  
8. LIMITATION OF LIABILITY  
[…]  
9. WARRANTY  
[…]  
10. INSTALLATION  
[…]  
11. HANDLING OF PCBs  
[…]  
12. RETURNED GOODS  
[…]  
13. TERMS OF PAYMENT  
[…]  
14. CHANGES AND CANCELLATION  
Orders accepted by Purchaser and not subject to changes or cancellation by Purchaser, except with  
Electek’s written consent. In such cases where Electek authorizes changes or cancellation, Electek  
reserves the right to charge Purchaser with reasonable costs based upon expenses already incurred  
and commitments made by Electek, including, with limitation, any labour done, material purchased  
and also including Electek’s usual overhead and reasonable profit and similar cancellation charges  
with Electek’s suppliers.  
15. THE AGREEMENT  
An acceptance and official confirmation of Purchaser's order by Electek shall constitute the  
complete agreement, subject to the terms and conditions of sale herein set forth, and shall supersede  
all previous quotations, orders or agreements. The law of the Province of Ontario shall govern the  
validity, interpretation and enforcement of these terms and conditions of sale and of any contract of  
which these terms and conditions are a part.  
In 2015, Electek made its Timesheets digital. For Greenfield to approve Electek’s work, a  
computer software prompt stated, “by approving this project Timesheet, you agree that you have  
17  
read, understand, and accept the terms and conditions.” There was a hyperlink to Electek’s terms  
and conditions.  
Greenfield accepted this manner of contracting where it would submit Purchase Orders  
before or after work was performed and where it would sign Electek’s Timesheets.  
By February 2018, Electek had performed over a hundred work assignments for  
Greenfield. From 2011 to 2018, Electek’s services were procured by a call-out, by a written  
request, or by an accepted bid. Greenfield only rarely provided a Purchase Order before Electek  
performed the work. More than 150 Greenfield Purchase Orders were issued, a few of which were  
issued before the work was done, but most Purchase Orders were issued after the work was  
complete. Electek provided Greenfield with its rate sheet and a Timesheet indicating the work  
performed. As already noted above, the Timesheet stated that Greenfield accepted Electek’s terms  
and conditions. Greenfield routinely signed the Timesheets.  
At no time between 2009 to 2018 was a POGTC annexed to any of Greenfield’s Purchase  
Orders issued for Electek. Greenfield, however, believed that Electek was bound by Mr. Gray’s  
signature in 2009 on the POGTC. After 2009, on no occasion was Electek orally told that POGTC  
applied. Mr. Gray had left his job with Electek, and from 2011 to 2018, Electek was not conscious  
of the POGTC.  
The Incident  
On February 10, 2018, at 4:55 a.m. a transformer relay opened. This indicated a fault  
condition at transformer G3 (“GSU #3”), which was manufactured by Pauwels Canada Inc.  
Greenfield made an urgent call to Electek to perform emergency services. No Purchase  
Order was issued on the 10th. Shane Maddeford of Electek took the telephone call from Greenfield.  
When Electek was called out on February 10, 2018, there was no specific tender or Purchase Order  
for the emergency work, and the price that was subsequently charged for the work was in  
accordance with the current rate sheet that included reference to Electek’s terms and conditions.  
On February 10, 2018, Mr. Maddeford went to Greenfield’s plant. He made a  
recommendation, and the transformer was re-energized. The transformer failed immediately.  
Greenfield alleges that the re-start triggered a catastrophic failure causing more than $10 million  
in damages.  
On February 12, 2018, Mr. Maddeford prepared a Timesheet for Electek’s already  
performed work.  
On February 14, 2018, Greenfield issued a purchase order for the work performed on  
February 10, 2018. The purchase order was #GEC-WGTS-11829. The Description of the work  
was “ESTIMATED TIME AND MATERIAL FOR ELECTRICAL SUPPORT FOR GSU #3  
FAULT INSPECTION AND REPAIRS. NOTES OR SPECIAL INSTRUCTIONS:  
ELECTRICAL SUPPORT FOR GSU #3 FAULT WO#30452*2.The price was $44,000 plus  
HST of $5,720 for a total of $49,720.  
The Purchase Order was issued by Henry N. Nader of Greenfield. The Purchase Order did  
not include a copy of the POGTC. The Purchase Order referenced terms and conditions “already  
agreed upon between the parties of this purchase order.” The Purchase Order stated: “’‘Purchase  
order number and P.O. line item numbers are required on invoice and all packing slips.’ Please  
 
18  
sign purchase order and fax back to 519-867-337.” Electek did not sign the purchase order and fax  
it back to Greenfield.  
On February 20, 2018, Mr. Valleau of Greenfield approved Electek’s Timesheet for the  
GSU #3 work. He did this by electronically clicking the box that stated that Electek’s terms and  
conditions applied. In his Reply Statement for the Arbitration hearing, Mr. Valleau’s evidence was  
that he did not appreciate what he was doing other than approving work in accordance with the  
POGTC. Mr. Valleau stated:  
Paragraph 28 of Joe Vandenboom's statement includes a screenshot of a box saying "Approve  
Project Timesheet". I would always just click "Approve" to approve the Timesheet. I never took in  
the fact that I was being asked to change any T&Cs [terms and conditions] to which Electek had  
agreed as an authorized vendor. I never thought or intended to do anything otherwise, and I never  
clicked on a link to T&Cs. I did not think that my approving their time was anything but that. After  
reading Joe's affidavit, out of curiosity, I went back to a timesheet email in my inbox to confirm that  
this box actually appeared. I see that it does. I clicked "Cancel" to see what happens. It simply closes  
the window and I see the screen requesting that I "Approve" the time. In other words, the only way  
I can approve the time is to click "Approve" twice. If I do not do this, the timesheet will not get  
approved and Electek will not get paid. My understanding is that [Greenfield’s] T&Cs are  
paramount and govern our vendor relationship; I would not expect that my approving their  
timesheets could in any way impact or change this.  
Electek’s position is that the reference in Greenfield’s Purchase Order that it identified to  
terms and conditions “already agreed upon between the parties” is to Electek’s terms and  
conditions and not the terms and conditions in the POGTC.  
Greenfield subsequently hired Electek to perform some of the repairs consequent to the  
transformer failure.  
In March 2018, Electek prepared its invoice, which was sent to Greenfield. The invoice  
referenced purchase order #GEC-WGTS-11829.  
The Submission to Arbitration  
Two years passed after the incident of February 2018. On February 6, 2020, Greenfield  
brought a Notice of Arbitration against Electek relying on the arbitration agreement contained in  
the POGTC.  
By Notice of Arbitration dated February 6, 2020, delivered to the ICDR, Greenfield  
commenced an arbitration against Electek, claiming damages for negligence, misrepresentation,  
and breach of contract by Electek with respect to work performed on transformer GSU #3.  
On February 10, 2020, Electek delivered an Answer to the Notice of Arbitration stating  
there was no valid agreement to arbitrate. Electek denied all of Greenfield’s allegations. Electek  
specifically advised it did not attorn to this arbitration proceeding and it reserved all its rights.  
Almost immediately, Electek brought an application in the Ontario Superior Court of  
Justice to stop the arbitration proceeding.  
On May 1, 2020, the ICDR appointed Earl A. Cherniak Q.C., William G. Horton, and J.  
Brian Casey as the arbitral tribunal.  
On June 15, 2020, during the pandemic, the Electek Notice of Application was triaged by  
Justice Myers, who made the endorsement set out above, redirecting the parties back to the  
 
19  
Arbitrators: “There is no short, crisp ruling of law that would save significant trial expense either  
here or there. Start there. We’ll be here when you get back.”  
Electek requested the Arbitrators to decide the issue of its jurisdiction over the dispute.  
Electek filed witness statements from: (a) Brad Gray, dated June 11, 2020 and August 21,  
2020; (b) Shane Maddeford, dated June 12, 2020; (c) Alex Palimaka, dated July 6, 2020, August  
21, 2020 and October 7, 2020; and (d) Joe Vandenboom, dated August 20, 2020.  
Greenfield filed witness statements from: (a) Max Autio, dated September 27, 2020; (b)  
Lynn Ballard, dated July 23, 2020 and September 27, 2020; (c) Rick Dejonghe, dated July 24,  
2020; (d) Rajesh Desai, dated August 4, 2020; (e) David Lamoreaux, dated July 24, 2020; Lorne  
Reddy, dated September 30, 2020; and (f) Tim Valleau, dated July 23, 2020 and September 29,  
2020.  
The preliminary hearing was held by Zoom video conference on February 3, 4, 5 and 8,  
2021 during which each witness was examined and cross-examined and counsel made opening  
and closing submissions.  
The Arbitrators’ Decision  
On March 5, 2021, the Arbitrators released their award and they decided that they had  
jurisdiction over the dispute. In their award, the Arbitrators stated:  
34. The Dispute Resolution Clause contained in the POGTC is to be treated as an independent  
agreement that may survive even if the remaining terms of POGTC are ultimately found to be invalid  
or inapplicable to the Work. In other words, to the extent issues as to validity or applicability of the  
POGTC are within the scope of the agreement to arbitrate and are in contention, the arbitration  
clause is applicable. In our view, the Greenfield claim does relate to the POGTC and that is therefore  
within the scope of the arbitration agreement contained within the Dispute Resolution Clause.  
35. Whether or not Mr. Vandenboom and Mr. Gray were of the belief the POGTC was not to apply  
to all jobs, including the Work, is to be determined in the arbitration. It is not relevant to the validity  
of the Dispute Resolution Clause itself. There is nothing in the clear language of the arbitration  
agreement to suggest it was only to be applicable to one job, or that it was applicable only in cases  
where the purchase order specifically makes reference to the POGTC. On the contrary, in the  
Dispute Resolution Clause “The parties agree that any and all disputes or controversies that may  
arise between the parties arising out of or related to this Agreement shall be determined by binding  
arbitration.” (Underlining added)  
36. It is clear from the evidence that the POGTC was signed by Mr. Gray on the understanding that  
it was required in order for Electek to get any work from Greenfield. The extent to which the  
language of the POGTC respecting its other terms requires it be referenced in all purchase orders or  
that it was job specific need not be determined at this stage of the arbitration. Our sole task is to  
determine if the POGTC contained a valid arbitration agreement that is broad enough to cover the  
present dispute between the parties.  
37. Electek has argued that the POGTC is not an enforceable agreement because it has no effect  
until it is attached to a PO and, on its own, lacks essential provisions as to such matters as the scope  
of the work to be done and price citing Bawitko Investments Limited v Kernels Popcorn Limited.8  
This is not an argument that is applicable to the arbitration agreement before us. The arbitration  
agreement in the Dispute Resolution Clause speaks generally of a dispute between the “parties” not  
8 [1991] O.J. No. 495 (C.A.).  
 
20  
to a “Buyer” and “Seller” as used in the other provisions of the POGTC. It speaks of “any and all”  
disputes respecting the POGTC.  
38. Electek also argued that the arbitration agreement is essentially unfair because the Dispute  
Resolution Clause in the POGTC was not specifically drawn to the attention of Electek, citing  
Brentwood Plastics Inc. v Topsyn Flexible Packaging Ltd.9 and Morgan Trust Company of Canada  
v Falloncrest Financial Corporation et al.10 In the former case, the original agreement did not  
contain an arbitration clause, but such a clause was added to an invoice for the goods. There is no  
basis for the argument here. The POGTC was given to Electek to consider at its own convenience  
and was independently reviewed by a senior officer of Electek before it was signed and faxed to  
Greenfield. The Dispute Resolution Clause was as prominent in the document as any other clause.  
Unlike the case of Dynatec Mining Limited v PCL Civil Constructors (Canada) Inc.,11 this is not a  
case where the agreement to arbitrate was incorporated by reference. The agreement to arbitrate is  
in the Dispute Resolution Clause and forms an integral part of the POGTC. The subsequent  
applicability of the POGTC to particular work may be disputed, as it clearly is for the Work in  
question in this case, but this does not affect the existence, validity or scope of the Dispute  
Resolution Clause which calls for the resolution of the issue of applicability by arbitration. Given  
that we are not deciding the issue of applicability of the POGTC to the Work in question at this  
stage, we do not need to consider the various cases cited by Electek on that point.  
[…]  
40. As Greenfield is arguing the POGTC applies to the Work and Electek is arguing that it does not,  
there is a dispute “arising out of or related to” the POGTC and it “shall be determined by binding  
arbitration.”  
[…]  
42. In our view, unless subsequently revoked, rendered null and void, or invalid, there is a valid  
enforceable arbitration agreement covering this dispute, and this tribunal has jurisdiction to decide  
the claim.  
43. Electek argues that, even if the Work was governed by a purchase order to which the POGTC  
applied, Greenfield had accepted Electek’s Terms and Conditions when its personnel clicked on the  
“Approve” button on Electek’s electronic form, thus ending the legal effect of the Dispute  
Resolution Clause, at least for this job.  
44. There are two problems with this argument. First, as stated above, the arbitration agreement, for  
the purposes of jurisdiction is to be treated as a separate agreement from the other terms of the  
POGTC. It is not sufficient to argue the POGTC is invalid or inapplicable, it must be shown the  
arbitration agreement is invalid or inapplicable. Unless that can be shown, the question of invalidity  
or non-applicability of the POGTC for the Work are matters to be decided by the tribunal when the  
merits are before us.  
45. The “Approve” button clearly referenced the hours worked for the specific job. It does not  
contemplate or suggest it is intended to alter the Dispute Resolution Clause between the parties. A  
simple approval of the work done cannot be taken as an intention to suspend or nullify a separate  
arbitration agreement. By clicking the “Approve” button, at its highest, Greenfield may have been  
accepting different terms and conditions for the particular work. That is a matter of contention which  
does not relate to our jurisdiction and which we do not here decide. However, Greenfield could not  
be taken to have agreed to remove the Dispute Resolution Clause that governs any and all disputes  
9 2014 MBQB 97.  
10 [2006] O.J. No. 4603 (C.A.)  
11 [1996] O.J. No. 29 (Gen. Div.).  
21  
between the parties relating to the POGTC. Something much more than a reference to Electek’s  
Terms and Conditions for this one particular work would be needed.  
46. A second problem with Electek’s argument at this stage is that even if accepted, Electek’s Terms  
and Conditions are not exclusive and all encompassing. They are applicable only to the extent the  
terms and conditions of Greenfield’s Terms and Conditions are in conflict with or inconsistent with  
Electek’s Terms and Conditions. Electek’s Terms and Conditions make no mention of any dispute  
resolution process. The Dispute Resolution Clause in the POGTC is not inconsistent with anything  
in Electek’s Terms and Conditions. It can be read with Electek’s Terms and Conditions  
harmoniously and without any inconsistency.  
47. The tribunal finds the arbitration agreement has not been invalidated or rescinded by Electek’s  
Terms and Conditions, even if they are later found to be applicable to the dispute in this arbitration.  
48. In our view, Greenfield’s claim, including liability, the applicability or inapplicability of the  
POGTC to the Work in light of events subsequent to the signing of the POGTC, the course of  
business dealings and the precise documentation relating to the Work, is a substantive matter within  
the jurisdiction of the tribunal to decide.  
Disposition  
49. For the reasons set out herein, Electek’s motion for a declaration that the Dispute Resolution  
Clause contained in the POGTC does not apply to this dispute is dismissed. We have jurisdiction to  
decide the claim. We make no finding at this stage in the proceedings as to the applicability of the  
other terms contained in the POGTC to the Work at issue.  
G. The Jurisdiction of Arbitrators  
Introduction  
There is a complex and special body of law that governs the jurisdiction of arbitrators to  
decide disputes. There are three intertwined and interactive branches to this body of law. The first  
branch is the general law of contract that is associated with arbitration agreements. The second  
branch is the special procedural and statutory law for determining the jurisdiction of arbitrators.  
The third branch is the special substantive law about the jurisdiction of arbitrators that has  
developed from the general law of contract and the special procedural and statutory law. As the  
discussion below will reveal, the procedural and statutory law is the main source of the substantive  
law that governs the jurisdiction of arbitrators.  
In this part of my Reasons for Decision I will discuss, the three branches of the complex  
general and special law that governs the jurisdiction of arbitrators.  
Contract Formation  
An arbitration agreement is a contract. Contract law is at the heart of the special law about  
the jurisdiction of arbitrators. General contract law about the formation, interpretation,  
performance, and enforcement of contracts explains the special law about the jurisdiction of  
arbitrators.  
A contract does not come into existence until there has been a definite offer and an  
     
22  
unconditional acceptance of the offer communicated to the offeror.12 An enforceable contract also  
requires consideration.13 A contract requires a consensus ad idem, “a meeting of the minds” on the  
essential terms of the bargain.14 A party’s signature is one way of manifesting consent where it is  
reasonable for the party relying on the signed document to believe that the signer really did  
assent.15  
For an agreement to be legally binding, there must be sufficient certainty that the parties  
have agreed as to its essential terms.16 To be a good contract, there must be a concluded bargain  
and a concluded contract is one which settles everything that is necessary to be settled by  
agreement between the parties.17 An agreement to agree or an agreement to negotiate an agreement  
is not enforceable.18  
The common law adheres to an objective theory of contract formation under which a  
subjective mutual consensus is neither necessary nor sufficient for the creation of an enforceable  
contract and a person may be bound by contractual obligations that she did not intend subjectively  
to assume. The approach of the common law is to examine objectively how a party’s words and  
conduct would appear to a reasonable person in the position of the other party as constituting an  
offer, an acceptance, communication of acceptance, or agreement about the terms of an  
agreement.19  
When a contract is to be found in a series of communications between the parties and not  
in a formal note or memorandum signed as evidence of the contract, "the whole of that which has  
12 Can. Dyers Assn. Ltd. v. Burton (1920), 47 O.L.R. 259 (H.C.J).  
13 Foakes v. Beer (1884), 9 App. Cas. 605, [1881-5] All E.R. Rep. 106 (H.L.); Eastwood v. Kenyon (1840), 11 Ad.  
& El. 438, 113 E.R. 482 (Q.B.).  
14 Bawitko Investments Ltd. v. Kernels Popcorn Ltd., [1991] O.J. No. 495 (C.A.).  
15 Stone v. Polon, [2006] O.J. No. 2981 (C.A.); Tilden Rent-a-Car Co. v. Clendenning (1978), 18 O.R. (2d) 601  
(C.A.).  
16Georgian Windpower v. Stelco, 2021 ONSC 3759 at paras. 1212-125; Bidell Equipment LP v. Caliper Midstream  
GP LLC, 2019 ABQB 296, aff’d 2020 ABCA 478, leave to appeal to S.C.C. ref’d [2021] S.C.C.A. No. 72; Jamshidi  
v. Dependable Mechanical Systems Inc., 2018 ONSC 7101; Di Battista v. Di Battista Farms Ltd., 2012 ONCA 721  
at para. 14; Consultate Ventures Inc. v. Amico Contracting & Engineering (1992), Inc., 2007 ONCA 324; Bawitko  
Investments Ltd. v. Kernels Popcorn Ltd., [1991] O.J. No. 495 at para. 21 (C.A.); Canada Square Corp. v.  
Versafoods (1981), 34 O.R. (2d) 250 at para. 30 (C.A.); Bahamaconsult Ltd v Kellogg Salada Canada Ltd. (1976),  
15 O.R. (2d) 276 (C.A.), leave to appeal to SCC refused, [1976] 2 S.C.R. vii.  
17 Georgian Windpower v. Stelco, 2021 ONSC 3759 at paras. 1212-125; G. Scammell & Nephew, Ltd. v. Ouston,  
[1941] A.C. 251at p. 269 (H.L.); May & Butcher v. The King, [1934] 2 K.B. 17.  
18 Cedar Group Inc. v. Stelco Inc. [1995] O.J. No. 3998 (Gen. Div.), aff’d [1996] O.J. No. 3974 (C.A.); Walford v.  
Miles, [1992] 2 A.C. 128 (H.L.).  
19 Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp. 2020 SCC 29; Chartbrook Ltd. v. Persimmon  
Homes Ltd., [2009] 1 A.C. 1101 at para. 39 (H.L.); UBS Securities Canada Inc. v. Sands Brothers Canada Ltd.2007  
ONCA 405, leave to appeal to SCC refused, 32173, [2007] S.C.C.A. No. 386; Repap British Columbia Inc. v.  
Electronic Technology Systems Inc. 2002 BCSC 539; Scotsburn Co-operative Services Ltd. v. W. T. Goodwin Ltd.,  
[1985] 1 S.C.R. 54, at p. 63; Tywood Industries Ltd. v. St. Anne-Nackawic Pulp & Paper Co. Ltd. (1979), 25 O.R.  
(2d) 89 (H.C.); Grant v. Province of New Brunswick (1973), 6 N.B.R. (2d) 95 (S.C. (App. Div.); Saint John Tug  
Boat Co. v. Irving Refining Ltd., [1964] S.C.R. 614; Hobbs v. Esquimalt and Nanaimo Railway Co. (1899), 29  
S.C.R. 450; Smith v. Hughes (1871), L.R. 6 Q.B. 597.  
23  
passed between the parties must be taken into consideration.20  
The test is objective, and the offer, acceptance, consideration, and terms may be inferred  
from the parties' conduct and from the surrounding circumstances. The classic statement of the  
objective theory comes from Smith v. Hughes,21 where Blackburn, J. stated:  
If, whatever a man's real intention may be, he so conducts himself that a reasonable man would  
believe that he was assenting to the terms proposed by the other party, and that other party upon that  
belief enters into [a] contract with him, the man thus conducting himself would be equally bound as  
if he had intended to agree to the other party's terms.  
In UBS Securities Canada Inc. v. Sands Brothers Canada Ltd.22 at paragraph 2, the Court  
of Appeal explained the objective test for contract formation by adopting the comments of  
Professor Waddams in The Law of Contracts (5th ed.), at page 103, where he stated:  
The principal function of the law of contracts is to protect reasonable expectations engendered by  
promises. It follows that the law is not so much concerned to carry out the will of the promisor as  
to protect the expectation of the promisee. This is not, however, to say that the will of the promisor  
is irrelevant. Every definition of contract, whether based on agreement or on promise, includes a  
consensual element. But the test of whether a promise is made, or of whether assent is manifested  
to a bargain, does not and should not depend on an inquiry into the actual state of mind of the  
promisor, but on how the promisor's conduct would strike a reasonable person in the position of the  
promisee.  
The point made by Professor Waddams was made by Lord Pearce in Henry Kendell and  
Sons v. William Lillico and Sons Ltd.23 at p. 113, where he stated:  
The court's task is to decide what each party to an alleged contract would reasonably conclude from  
the utterances, writings or conduct of the other.  
Thus, a determination as to whether a concluded agreement exists does not depend on an  
inquiry into the actual state of mind of one of the parties or on the parole evidence of one party’s  
subjective intention.24  
In performing its task of determining objectively whether the parties have reached an  
agreement on the fundamental terms of their bargain, the court should not be too quick to hold that  
there is not the degree of certainty in any of the contract’s essential terms needed for a binding  
contract.25 This does not mean that the court is to make a contract for the parties or to go beyond  
the words used by the parties, but it means that if satisfied that there was an ascertainable and  
definitive intention to contract with a definite meaning, the court will do its best to make sense of  
20 Tywood Industries v St Anne-Nackawic Pulp & Paper Co (1979), 25 O.R. (2d) 89 (H.C.J.); Lindsey v. Heron &  
Co., [1921] O.J. No. 75, (S.C. (App. Div.); North-west Transportation Co. v. McKenzie (1895), 25 Can. S.C.R. 38  
at p. 40.  
21 (1871), L.R. 6 Q.B. 597 at p. 607.  
22 2007 ONCA 405, leave to appeal to SCC refused, [2007] S.C.C.A. No. 386.  
23 [1969] 2 A.C. 31 (H.L.).  
24 Peres v. Moneta Porcupine Mines Inc., 2021 ONSC 5798 at para. 29; Olivieri v. Sherman, 2007 ONCA 491;  
Lindsey v. Heron & Co., [1921] O.J. No. 75 (S.C. (App. Div.)).  
25 Rubenstein Bros. (Ontario) Ltd. v. Capmor Capital Corp. (c.o.b. Capmor Capital Leasing), [1994] O.J. No. 186 at  
para. 39 (Gen. Div.); Canada Square Corp. Ltd. v. VS Services Ltd. (1981), 34 O.R. (2d) 250 at p. 262 (C.A.).  
24  
the contract.26  
Whether a communication is a definite offer or is a pre-offer, an “invitation to treat” that  
is not capable of acceptance depends on the language used and the particular circumstances.27 An  
acceptance of an offer must be unqualified and unconditional and if the recipient of the offer signs  
it with material changes, it is a counter-offer and not an acceptance.28 An offer may be accepted in  
the manner to be implied from or found in the nature of the offer and the surrounding  
circumstances, and the offeror may specify the time and the manner of acceptance.29  
Before a court will conclude that a contract has been established, it must be satisfied that  
the parties have concluded their negotiations and settled the fundamental terms of their bargain.30  
If the essential terms are complete, the court will give effect to the contract and the failure to parties  
to agree on minor matters will not invalidate the contract.31  
Misunderstandings, errors, and other irregularities that may arise during the contract  
formation process are generally addressed through the doctrines of mistake, misrepresentation,  
frustration, non est factum, illegality, unconscionability, and through the remedies of rectification  
and rescission.32  
The Procedural Jurisdiction to Determine the Arbitrator’s Jurisdiction  
The matter of determining whether an arbitrator has jurisdiction comes to the court in seven  
ways as described below. The seven procedural ways of determining whether an arbitrator has  
jurisdiction are: (a) stay motions; (b) applications for declarations and injunctions pursuant to s.48  
of the Arbitration Act, 1991; (c) applications for interpretations of the arbitration agreement  
pursuant to rule 14.05 of the Rules of Civil Procedure; (d) applications for the appointment of  
arbitrators; (e) applications pursuant to s.17(8) of the of the Arbitration Act, 1991; (f) applications  
pursuant to s.46 of the Arbitration Act, 1991; and (g) appeals of arbitration awards.  
Some but not all of these procedural means are influenced by the competence-competence  
principle, discussed in detail below. This principle directs that subject to certain exceptional  
circumstances, the court respects that arbitrators have the competence to determine whether they  
have the competence (i.e. the jurisdiction) to decide whether they can decide a dispute.  
(a) Stay Motions  
The first way that a court may determine the jurisdiction of an arbitrator is pursuant to s.7  
of the Arbitration Act, 1991. Pursuant to s.7, when a party brings a court action, his or her  
opponents may bring an application to have the civil action stayed on the ground that the parties  
26 Canada Square Corp. Ltd. v. VS Services Ltd. (1981), 34 O.R. (2d) 250 at p. 262 (C.A.); G. Scammell & Nephew,  
Ltd. v. Ouston et al., [1941] A.C. (H.L.); Hillas & Co. Ltd. v. Arcos (1932), 147 L.T. 503 (H.L.).  
27 Can. Dyers Assn. Ltd. v. Burton (1920), 47 O.L.R. 259 (H.C.); North Vancouver v. Tracey (1903), 34 S.C.R. 132.  
28 Bergman v. Burns (1982), 36 O.R. (2d) 4 (H.C.); Shackleton v. Hayes, [1965] 2 O.R. 250 (C.A.), aff’d [1954] 4  
D.L.R. 81 (S.C.C.); (H.C.); Beer v. Lee (1913), 29 O.L.R. 255 (C.A.); Cole v. Sumner (1900), 30 S.C.R. 379.  
29 Ross v. T. Eaton Co. (1992), 11 O.R. (3d) 115 (C.A.); Schiller v. Fisher, [1981] 1 S.C.R. 593; MacIntyre v.  
Commerce Capital Mtge. Corp. (1981), 34 O.R. (2d) 104 (H.C.); Real Estate Centre Ltd. v. Ouellette (1974), 47  
D.L.R. (3d) 568 (N.B.C.A.); Parkette Apartments Ltd. v. Masternak [1965] 2 O.R. 350 (H.C.).  
30 G. Scammell & Nephew Ltd. v. Ouston, [1941] A.C. 251 (H.L.); Murphy v. McSorley, [1929] S.C.R. 542.  
31 Murphy v. McSorley, [1929] S.C.R. 542.  
32 Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp. 2020 SCC 29.  
   
25  
have agreed that their dispute be arbitrated. The court’s jurisdiction to stay a civil action and allow  
the arbitration to proceed is set out in s.7 of the Arbitration Act, 1991, which states:  
Stay  
7(1) 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 the motion of another party to the arbitration agreement, stay the proceeding.  
Exceptions  
(2) However, the court may refuse to stay the proceeding in any of the following cases:  
1. A party entered into the arbitration agreement while under a legal incapacity.  
2. The arbitration agreement is invalid.  
3. The subject-matter of the dispute is not capable of being the subject of arbitration under  
Ontario law.  
4. The motion was brought with undue delay.  
5. The matter is a proper one for default or summary judgment.  
Arbitration may continue  
(3) An arbitration of the dispute may be commenced and continued while the motion is before the  
court.  
Effect of refusal to stay  
(4) If the court refuses to stay the proceeding,  
(a) no arbitration of the dispute shall be commenced; and  
(b) an arbitration that has been commenced shall not be continued, and anything done in  
connection with the arbitration before the court made its decision is without effect.  
Agreement covering part of dispute  
(5) The court may stay the proceeding with respect to the matters dealt with in the arbitration  
agreement and allow it to continue with respect to other matters if it finds that,  
(a) the agreement deals with only some of the matters in respect of which the proceeding  
was commenced; and  
(b) it is reasonable to separate the matters dealt with in the agreement from the other  
matters.  
No appeal  
(6) There is no appeal from the court’s decision.  
In the context of deciding the stay application, the court may decide that the arbitrator has  
or may have jurisdiction to decide the parties’ dispute, in which case, the court will grant a stay of  
the civil action, and it will remit the case to the arbitrator. Pursuant to the competence-competence  
principle on the stay motion, the court may decide to let the arbitrator rule on his or her own  
jurisdiction to decide the dispute.  
26  
Or, in the context of deciding the stay application, the court may decide that the arbitrator  
does not have jurisdiction, in which case it will not stay the action. In defined circumstances, the  
court may not stay the civil action for statutorily defined reasons, such as the case is suitable for a  
summary judgment in which cases, practically speaking, the court will decide the dispute and the  
arbitrator’s jurisdiction, if any, is preempted.  
Under the Arbitration Act, 1991, the exceptions to granting a stay and the application of  
the competence-competence principle are that the court may refuse to stay its own proceedings:  
(1) if a party entered into the arbitration agreement while under a legal incapacity; (2) if the  
arbitration agreement is invalid; (3) if the subject matter of the dispute is not capable of being the  
subject of arbitration under Ontario law; (4) if the motion was brought with undue delay;33 or (5)  
if the matter is a proper one for default or summary judgment.34  
In Haas v. Gunasekaram,35 the Court of Appeal set out a five-part analytical framework  
for determining whether an action should be stayed for arbitration: (1) Is there an arbitration  
agreement? (2) What is the subject matter of the dispute? (3) What is the scope of the arbitration  
agreement? (4) Does the dispute arguably fall within the scope of the arbitration agreement? (5)  
Are there grounds on which the court should refuse to stay the action?  
Earlier cases about s.7(1) of the Arbitration Act, 1991 had summarized the approach to take  
when deciding whether an action should be stayed as first interpreting the arbitration provision,  
second analyzing the claim to determine whether it is encompassed by the arbitration provision  
and third, if so, then the court must allow the arbitration to proceed, unless one of the exceptions  
in s.7(2) applied to the circumstances of the case.36 In the seminal case of Heyman v. Darwins  
Ltd.,37 discussed below, Lord Macmillan stated at p. 370:  
Where proceedings at law are instituted by one of the parties to a contract containing an arbitration  
clause and the other party, founding on the clause, applies for a stay, the first thing to be ascertained  
is the precise nature of the dispute which has arisen. The next question is whether the dispute is one  
which falls within the terms of the arbitration clause.  
33 Allied Accounting & Tax Services Ltd. v. Pacey, 2017 ONSC 4388; Bouchan v. Slipacoff (2009), 94 O.R. (3d)  
741; MDG Kingston Inc. v. MDG Computers Canada Inc., 2008 ONCA 656; Lansens v. Onbelay Automotive  
Coatings Corp., [2006] O.J. No. 5470 (S.C.J.); ABN Amro Bank of Canada v. Krupp Mak Maschinenbau GmbH  
(1994), 21 O.R. (3d) 511 (Gen. Div.).  
34 Arbitration Act, 1991, S.O. 1991, c. 17, s. 7(2). Smith v. National Money Mart Co., [2008] O.J. No. 2248 (S.C.J.),  
aff’d on other grounds [2008] O.J. No. 4327 (C.A.), leave to appeal refused [2008] S.C.C.A. No. 535; Dewshaf  
Investments Inc. v. Buckingham Hospitality, [2005] O.J. No. 6190 (S.C.J.), var’d [2006] O.J. No. 1724 (C.A.); 407  
ETR Concession Co. v. Ontario (Minister of Transportation), [2004] O.J. No. 4516 (S.C.J.); Sigfussion Northern  
Ltd. v. Cantera Mining Ltd., [2003] O.J. No. 1040 (C.A.); Kanitz v. Rogers Inc., [2002] O.J. No. 665 (S.C.J.);  
Kallaur v. Baranick, [1996] O.J. No. 2135 (Gen. Div.); Ottawa Rough Riders Inc. v. Ottawa (City), [1995] O.J. No.  
3797 (Gen. Div.).  
35 2016 ONCA 744 at para. 17. See also: Pezo v. Pezo, 2021 ONSC 5406; Leon v. Dealnet Capital Corp., 2021  
ONSC 3636 (Master); Gupta v. Lindal Cedar Homes Ltd. 2020 ONSC 6333; Grandfield Homes (Kenton) Ltd. v.  
Chen 2020 ONSC 5230; Leeds Standard Condominium Corp. No. 41 v. Fuller, 2019 ONSC 3900; Rhinehart v.  
Legend 3D Canada Inc., 2019 ONSC 3296.  
36 MDG Kingston Inc. v. MDG Computers Canada Inc., 2008 ONCA 656 at para. 14; Stone v. Polon, [2006] O.J.  
No. 2981 (C.A.); Woolcock v. Bushert, [2004] O.J. No. 4498 (C.A.); Mantini v. Smith Lyons LLP (2003), 64 O.R.  
(3d) 505 at para. 17, (C.A.), leave to appeal ref’d [2003] S.C.C. No. 344; T1T2 Limited Partnership v. Canada  
(1994), 23 O.R. (3d) 66 (Gen. Div.); International Semi-Tech Microelectronics Inc. v. Provigo Inc. (1990), 75 O.R.  
(2d) 724 (Gen. Div.); Heyman v. Darwins Ltd. [1942] A.C. 356 (H.L.).  
37 [1942] A.C. 356 at p. 370 (H.L.).  
27  
(b) Declarations and Injunctions pursuant to s. 48 of the Arbitration Act, 1991  
The second way that a court may determine the jurisdiction of an arbitrator to decide a  
dispute is pursuant to s.48 of the Arbitration Act, 1991. Pursuant to s.48, when a litigant brings an  
arbitration, his or her opponent may apply under s.48 for a declaration that the arbitration  
agreement is invalid and to enjoin the submission to arbitration. The court’s jurisdiction to declare  
the arbitration agreement invalid and to enjoin the arbitration is set out in s.48 of the Arbitration  
Act, 1991, which states:  
Declaration of invalidity of arbitration  
48 (1) At any stage during or after an arbitration, on the application of a party who has not  
participated in the arbitration, the court may grant a declaration that the arbitration is invalid  
because,  
(a) a party entered into the arbitration agreement while under a legal incapacity;  
(b) the arbitration agreement is invalid or has ceased to exist;  
(c) the subject-matter of the dispute is not capable of being the subject of arbitration under  
Ontario law; or  
(d) the arbitration agreement does not apply to the dispute.  
Injunction  
(2) When the court grants the declaration, it may also grant an injunction against the  
commencement or continuation of the arbitration.  
In the context of deciding the declaration/injunction motion, the court may rule on the  
arbitrator’s jurisdiction. The analytical framework for deciding whether to enjoin the arbitration  
mirrors the analysis used for a stay motion, described above. Pursuant to the competence-  
competence principle, the court may decide to let the arbitrator rule on his or her own jurisdiction  
to decide the dispute and thus refuse to enjoin the arbitration.  
(c) Application for Interpretation under Rule 14.05(3)(h) of the Rules of Civil  
Procedure  
The third way that a court may determine the jurisdiction of an arbitrator is similar to the  
second way and arises when a party initiates an arbitration and one of the other parties named in  
the arbitration brings an application pursuant to rule 14.05(3)(d) of the Rules of Civil Procedure  
for an interpretation of the alleged arbitration agreement. Rule 14.05(3)(g) also empowers the court  
to grant an injunction. Rules 14.05(3)(d) and (g) state:  
14.05(3) A proceeding may be brought by application where these rules authorize the  
commencement of a proceeding by application or where the relief claimed is,  
[…]  
(d) the determination of rights that depend on the interpretation of a deed, will, contract or  
other instrument, or on the interpretation of a statute, order in council, regulation or  
municipal by-law or resolution;  
[…]  
   
28  
(g) the court may determine the jurisdiction of an arbitrator when a litigant brings an  
arbitration and his or her opponent brings a civil action for a declaration that the arbitration  
agreement is invalid and to enjoin the submission to arbitration.  
In the context of deciding the application under rules 14.05(3)(d) and (g), the court may  
rule on the arbitrator’s jurisdiction. The analytical framework for deciding whether to enjoin the  
arbitration mirrors the analysis used for a stay motion. Pursuant to the competence-competence  
principle, the court may decide to let the arbitrator rule on his or her own jurisdiction to decide the  
dispute and thus refuse to enjoin the arbitration.  
(d) The Appointment of Arbitrator(s)  
The fourth way that a court may determine the jurisdiction of an arbitrator is pursuant to  
s.10 of the Arbitration Act, 1991, which authorizes the court to appoint arbitrator(s). Section 10  
states:  
Appointment of arbitral tribunal  
10(1) The court may appoint the arbitral tribunal, on a party’s application, if,  
(a) the arbitration agreement provides no procedure for appointing the arbitral tribunal; or  
(b) a person with power to appoint the arbitral tribunal has not done so after a party has  
given the person seven days notice to do so.  
No appeal  
(2) There is no appeal from the court’s appointment of the arbitral tribunal.  
More than one arbitrator  
(3) Subsections (1) and (2) apply, with necessary modifications, to the appointment of individual  
members of arbitral tribunals that are composed of more than one arbitrator.  
Chair  
(4) If the arbitral tribunal is composed of three or more arbitrators, they shall elect a chair from  
among themselves; if it is composed of two arbitrators, they may do so.  
On an application for the appointment of an arbitrator, the Court must ascertain the nature  
of the dispute and whether it falls within the scope of the relevant arbitration agreement.38 Once  
again, the jurisdictional analysis is similar to the analysis used for a stay motion, and if an arbitrator  
is appointed, once again, the court may decide to allow the arbitrator to determine his or her  
jurisdiction to decide the dispute between the parties.  
(e) Section 17 (8) Application  
The fifth way that a court may determine the jurisdiction of an arbitrator is pursuant to  
s.17(8) of the Arbitration Act, 1991. Section 17(8) becomes available, among other things, when  
a party to an arbitration asks the arbitrator as a preliminary question to rule on his or her own  
38 Greenfield Ethanol Inc. v. Suncor Energy Products Inc., [2007] O.J. No. 3104 at para. 4 (S.C.J.), aff’d 2007  
ONCA 823; Huras v. Primerica Financial Services Ltd., [2001] O.J. No. 3318 at paras. 8 to 10 (C.A.).  
   
29  
jurisdiction to decide the dispute. If the arbitrator rules on his or her own jurisdiction as a  
preliminary matter, then pursuant to s.17(8) of the Arbitration Act, 1991, a party may make an  
application to the court to decide the matter. As the discussion above revealed, the s.17(8)  
application is a review de novo.  
Sections 17(8) and (9) state:  
Review by court  
(8) If the arbitral tribunal rules on an objection as a preliminary question, a party may, within thirty  
days after receiving notice of the ruling, make an application to the court to decide the matter.  
No appeal  
(9) There is no appeal from the court’s decision.  
On an application under s.17(8), the jurisdictional analysis is similar to that used on a stay  
application, except the court cannot avoid deciding the matter of the arbitrator’s jurisdiction by the  
competence-competence principle.  
For the purposes of the immediate case, as will be described in detail below, the issue of  
the jurisdiction of the Arbitrators arises in the context of an application pursuant to s.17(8) of the  
Arbitration Act, 1991. Thus, in the immediate case, the competence-competence principle is not a  
factor. In the immediate case, the Arbitrators have ruled on jurisdiction, and now it is the court’s  
turn to do so de novo.  
(f) Section 46 Application  
The sixth way that a court may determine the jurisdiction of an arbitrator is pursuant to  
s.46 of the Arbitration Act, 1991. Section 46 is available when a party brings an arbitration, the  
arbitrator makes an arbitral award, and then the opponent challenges the arbitrator’s award  
pursuant to s.46 of the Arbitration Act, 1991, which states:  
Setting aside award  
46 (1) On a party’s application, the court may set aside an award on any of the following grounds:  
1. A party entered into the arbitration agreement while under a legal incapacity.  
2. The arbitration agreement is invalid or has ceased to exist.  
3. 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.  
[…]  
5. The subject-matter of the dispute is not capable of being the subject of arbitration under  
Ontario law.  
[…]  
On an application under s.46, the jurisdictional analysis is similar to that used on a stay  
application, except the court cannot avoid deciding the matter of the arbitrator’s jurisdiction by the  
competence-competence principle.  
 
30  
(g) Appeals  
As the discussion of the substantive law below will reveal, the jurisdiction of arbitrators is  
essentially a matter of interpreting the arbitration agreement. As a juridical matter, the  
interpretation of contracts is an issue of mixed fact and law.39 Pursuant to s.45 of the Arbitration  
Act, 1991, depending on the arbitration agreement, a party to an arbitration agreement may have a  
right to appeal an arbitrator’s award. Thus, appeals may provide a vehicle for the court to rule on  
an arbitrator’s jurisdiction.  
Section 45 of the Arbitration Act, 1991 states:  
Appeals  
Appeal on question of law  
45(1) If the arbitration agreement does not deal with appeals on questions of law, a party may appeal  
an award to the court on a question of law with leave, which the court shall grant only if it is satisfied  
that,  
(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal;  
and  
(b) determination of the question of law at issue will significantly affect the rights of the  
parties.  
Idem  
(2) If the arbitration agreement so provides, a party may appeal an award to the court on a question  
of law.  
Appeal on question of fact or mixed fact and law  
(3) If the arbitration agreement so provides, a party may appeal an award to the court on a question  
of fact or on a question of mixed fact and law.  
Powers of court  
(4) The court may require the arbitral tribunal to explain any matter.  
Idem  
(5) The court may confirm, vary or set aside the award or may remit the award to the arbitral tribunal  
with the court’s opinion on the question of law, in the case of an appeal on a question of law, and  
give directions about the conduct of the arbitration.  
[…]  
In the context of appeals, the court’s analysis of the arbitrator’s jurisdiction will apply the  
substantive law developed for stay motions, except the court cannot avoid deciding the matter of  
the arbitrator’s jurisdiction by the competence-competence principle.  
39 Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53.  
 
31  
The Competence-Competence Principle  
As noted above, for some of the procedural branches for a court to determine the  
jurisdiction of arbitrators, the court may apply what is known as the competence-competence  
principle. Thus, for example, on a stay application, pursuant to the competence-competence  
principle, the court may allow the arbitrator to determine whether he or she has jurisdiction to  
decide the dispute between the parties to the arbitration agreement.  
Pursuant to the competence-competence principle, subject to its exceptions, the court  
should allow the arbitrator to determine whether he or she has jurisdiction to decide the dispute.  
Under s.17(1) of the Arbitration Act, 1991, which is based a treaty known as the Model Law on  
International Commercial Arbitration, arbitrators have the power to rule on their own jurisdiction.  
Under what is known as the competence-competence principle, if there is an arguable or prima  
facie case that the arbitrator has jurisdiction, the court should defer the issue of jurisdiction to the  
arbitrator.40  
The general rule of the competence-competence principle is that a challenge to the  
arbitrator’s jurisdiction should be first resolved by the arbitrator. The exceptions to the general rule  
are where the challenge is based solely on question of law. If the challenge to the arbitrator’s  
jurisdiction raises questions of mixed fact and law, the court should refer the challenge to the  
arbitrator unless the questions of fact require only superficial consideration of the documentary  
evidence in the record.41 The competence-competence principle was summarized by the Supreme  
Court of Canada in Rogers Wireless Inc. v. Muroff,42 as follows:  
[W]hen an arbitration clause exists, any challenges to the jurisdiction of the arbitrator must first  
be referred to the arbitrator. Courts should derogate from this general rule and decide the question  
first only where the challenge to the arbitrator’s jurisdiction concerns a question of law alone.  
Where a question concerning jurisdiction of an arbitrator requires the admission and examination  
of factual proof, normally courts must refer such questions to arbitration. For questions of mixed  
law and fact, courts must also favour referral to arbitration, and the only exception occurs where  
answering questions of fact entails a superficial examination of the documentary proof in the  
record and where the court is convinced that the challenge is not a delaying tactic or will not  
prejudice the recourse to arbitration.  
The issue of whether an arbitrator has jurisdiction is a matter of contract formation and  
interpretation and the interpretation of a contract is a question of mixed fact and law,43 and thus  
pursuant to the competence-competence principle, the court should defer to the arbitrator unless  
40 Trade Finance Solutions Inc. v. Equinox Global Ltd., 2018 ONCA 12; Haas v. Gunasekaram 2016 ONCA 744;  
Ciano Trading & Services C.T. & S.R.L. v. Skylink Aviation Inc., 2015 ONCA 89; Harrison v. UBS Holding Canada  
Ltd., 2014 NBCA 26; Ontario Medical Assn. v. Willis Canada Inc., 2013 ONCA 745, aff’g 2013 ONSC 2253;  
Ontario v. Imperial Tobacco Canada Ltd., 2011 ONCA 525; Jean Estate v. Wires Jolley LLP, 2009 ONCA 339;  
Dancap Productions Inc. v. Key Brand Entertainment Inc., 2009 ONCA 135; Dell Computer Corp. v. Union des  
consommateurs, 2007 SCC 34; Dalimpex Ltd. v. Janicki (2003), 64 O.R. (3d) 737 (C.A.).  
41 Heller v. Uber Technologies Inc., 2020 SCC 16 at para. 34; Haas v. Gunasekaram, 2016 ONCA 744 rev’g 2015  
ONSC 5083; Blind Spot Holdings Ltd. v. Decast Holdings Inc., 2014 ONSC 1760 at paras. 2022; Ontario Medical  
Assn. v. Willis Canada Inc., 2013 ONCA 745 at paras. 20–23, aff’g 2013 ONSC 2253; Seidel v. TELUS  
Communications Inc., 2011 SCC 15; Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 at paras. 84–  
86.  
42 2007 SCC 35 at para. 11.  
43 Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53.  
 
32  
the interpretative question can be answered based on a superficial examination of the documentary  
proof in the record.  
In numerous cases under the Arbitration Act, 1991, courts have applied the competence-  
competence principle and dismissed applications to stay court actions and so have allowed  
arbitrators to determine whether a valid arbitration agreement exists and to interpret the agreement  
to determine whether the particular dispute between the parties falls within the scope of the  
arbitration provision.44  
The competence-competence principle statutorily overrules an aspect of Heyman v.  
Darwins Ltd.,45 discussed below, the foundational case about the jurisdiction of arbitrators. There  
is a proposition in Heyman v. Darwins Ltd. that the arbitrator has no jurisdiction if the arbitration  
agreement was void ab initio and thus the arbitrator has no jurisdiction to rule on his or her own  
jurisdiction. This proposition arises from the judgment of Viscount Simon, L.C., where he stated:  
If the dispute is whether the contract which contains the clause has ever been entered into at all, that  
issue cannot go to arbitration under the clause, for the party who denies that he has ever entered into  
the contract is thereby denying that he has ever joined in the submission. Similarly, if one party to  
the alleged contract is contending that it is void ab initio (because, for example, the making of such  
a contract is illegal), the arbitration clause cannot operate, for on this view the clause itself is also  
void.46  
However, under Ontario law, the question of whether or not the parties have entered into a  
binding and valid arbitration agreement is capable of being the subject of arbitration and an  
arbitrator is empowered to determine whether a valid arbitration agreement exists, in which case  
the arbitrator will be deciding whether or not he or she has the jurisdiction to adjudicate the dispute  
between the parties.47  
The Substantive Law about the Jurisdiction of Arbitrators to Decide Disputes  
(a) Introduction  
Turning to the special substantive law that defines the authority or jurisdiction of  
arbitrators, apart from some statutes that require parties to submit their disputes to arbitration, the  
jurisdiction or authority of an arbitrator to decide the law and the facts of a dispute is entirely a  
matter of contract.  
The Arbitration Act, 1991 stipulates the nature of arbitration agreements, which may be  
44 Ontario Medical Assn. v. Willis Canada Inc., 2013 ONCA 745, aff’g 2013 ONSC 2253; Ontario First Nations  
Limited Partnership v. Ontario Lottery and Gaming Corp., 2013 ONSC 4166; Kolios v. Vranich, 2012 ONCA 269;  
Robert v. Markandu, 2012 ONSC 6891; Nazarinia Holdings Inc. v. 2049080 Ontario Inc. (c.o.b. J.W. Car Care),  
2010 ONSC 1766, aff’d [2010] O.J. No. 4674 (C.A.), leave to appeal to S.C.C. ref’d. [2010] S.C.C.A. No. 500;  
2162683 Ontario Inc. v. Flexsmart Inc., 2010 ONSC 6493; Dancap Productions Inc. v. Key Brand Entertainment  
Inc., 2009 ONCA 135; MDG Kingston Inc. v. MDG Computers Canada Inc., 2008 ONCA 656; Jacob v. Beamish,  
[2008] O.J. No. 4175 (S.C.J.); T.J. Whitty Investments Corp. v. Tagr Management Ltd., [2004] O.J. No. 3523  
(S.C.J.); AMEC E & C Services Ltd. v. Nova Chemicals (Canada) Ltd., [2003] O.J. No. 2663 (S.C.J.); Dalimpex Ltd.  
v. Janicki (2003), 64 O.R. (3d) 737 (C.A.).  
45 [1942] A.C. 356 (H.L).  
46 [1942] A.C. 356 at p. 366 (H.L).  
47 IMG Canada Ltd. v. Melitta Canada Inc. [2001] O.J. No. 2331 (S.C.J.); Ontario v. Abilities Frontier Co-operative  
Homes Inc. [1996] O.J. No. 2586 at paras. 36-41 (Gen. Div.), leave to appeal refused [1997] O.J. No. 238 (C.A.).  
   
33  
oral or in writing. Arbitration agreements may be an independent agreement or be part of another  
agreement. Section 5 of the Arbitration Act, 1991 states:  
Arbitration agreements  
5(1) An arbitration agreement may be an independent agreement or part of another agreement.  
Further agreements  
(2) If the parties to an arbitration agreement make a further agreement in connection with the  
arbitration, it shall be deemed to form part of the arbitration agreement.  
Oral agreements  
(3) An arbitration agreement need not be in writing.  
Scott v. Avery” clauses  
(4) An agreement requiring or having the effect of requiring that a matter be adjudicated by  
arbitration before it may be dealt with by a court has the same effect as an arbitration agreement.  
Revocation  
(5) An