Ontario’s Court of Appeal clarifies that a 30‑day reference in a standard-form multi‑tier dispute resolution clause is a minimum resolution period, not a strict deadline, and confirms that arbitrators decide scope where jurisdiction is at least arguable.

Facts

J.P. Thomson Architects Ltd. (“Thomson”) provided architectural services to the Greater Essex County District School Board (the “Board”) under contracts incorporating GC18, a standard Ontario Association of Architects multi-tier dispute resolution clause. It should be noted that multi-tier dispute resolution clauses are common in many industries, including franchise agreements, senior executive employment agreements and corporate transactions such as share purchase agreements.

GC18 provides that “any dispute between the parties arising out of or relevant to this Agreement which cannot be resolved by the parties within thirty (30) days of the dispute arising, shall be referred to mediation, upon the request of either party.”

After 15 months of correspondence over performance and fees, Thomson requested mediation. The Board refused, asserting that no dispute existed within the prior 30 days. The Board later resisted arbitration on the same basis.

Thomson applied to the Ontario Superior Court of Justice for an order to appoint an arbitrator pursuant to the dispute resolution clause and subsection 10(1) of the Arbitration Act, 1991. The Application Judge dismissed the application as out of time, interpreting GC18 as imposing a strict 30-day deadline to request mediation. The Court found this interpretation supported the clause’s purpose of providing “an alternative mechanism to deal with disputes between the parties promptly when they arise.”

Decision

The Court of Appeal unanimously allowed the appeal, ordering mediation to be held within 60 days and preserving the right to arbitrate, if the matter remained unresolved.

Applying the correctness standard of review to the interpretation of a standard-form clause, the Court held that GC18’s 30-day reference sets a minimum waiting period before mediation—not a forfeiture deadline or limitation period. This interpretation aligned with the clause’s text, staged structure, and commercial purpose. A contrary reading would compel parties into serial notices or risk extinguishing ADR rights, undermining the clause’s design and business sense.

The Court also reaffirmed the competence-competence principle: where it is at least arguable that a dispute falls within an arbitration agreement, the arbitrator—not the court—determines scope and jurisdiction in the first instance.

Analysis

This decision carries several significant implications for arbitration practice due to the prevalence of multi-tier dispute resolution clauses.

First, this case shows courts will likely resist rigid interpretations of multi-tier clauses that convert facilitative timelines into traps for forfeiture. Grounding its reasoning in text, structure, and commercial reasonableness, the Court promotes functional dispute design: parties must attempt resolution for at least 30 days before escalating, but they do not lose ADR rights by missing a non-existent mediation “deadline.” For clients, this reduces gamesmanship over timing and preserves the integrity of tiered ADR processes.

Second, the judgment reinforces the “arguable case” approach to stays and arbitrability disputes. When it is reasonably arguable that the scope of the matter is subject to arbitration, scope questions are to be decided by the arbitrator in the first instance, not the court, unless the question is a pure question of law or a question of mixed fact and law requiring only a superficial review of the record.

J.P. Thomson Architects Ltd. v. Greater Essex County District School Board, 2025 ONCA 378