Arbitration clause

Arbitration can be faster and more confidential than litigation, which appeals to both sides of a business sale who would rather not have a dispute play out in public where customers, employees or competitors can see it. That confidentiality and speed are the clause’s main selling points on a deal of this size.

The mistake people actually make

Agreeing to arbitration without checking who pays for it and how the arbitrator is selected. Arbitrators charge by the hour, and the parties usually share that cost alongside their own legal fees. On a smaller dispute, arbitration can end up costing more per dollar in controversy than a modest court claim would have, which quietly defeats the reason the clause was chosen in the first place.

The Ontario and Quebec difference

Ontario governs its arbitration procedure through the province’s own Arbitration Act, 1991, while Quebec — a civil-law jurisdiction — addresses arbitration through provisions in its Code of Civil Procedure rather than a stand-alone arbitration statute. The mechanics of enforcing an arbitration clause, and of appealing or setting aside an award, can differ by province even when the clause itself reads identically.