Arbitration is an adversarial, evidence-based process a court must mandatorily stay a competing lawsuit for. Expert determination asks an expert for a number based on their own investigation, with no hearing, reviewable only on narrow common-law grounds.
Short answer
An arbitration clause commits the parties to a hearing-based, adversarial process governed by the Arbitration Act, 1991, and a court must mandatorily stay a competing lawsuit on a matter it covers; an expert-determination clause instead asks a named expert to reach a figure from their own investigation, with no hearing and no obligation to give reasons, and it is not arbitration at all — so the Act's mandatory stay does not apply to it, though a court can still review it narrowly for fraud, collusion, or acting outside the expert's mandate.
No statute defines “expert determination” or draws the line between it and arbitration; that distinction is a matter of contract interpretation and common law, turning on what the parties actually asked the decision-maker to do. Arbitration submits rival cases to an adversarial, evidence-based process resulting in a reasoned decision. Expert determination relies on the decision-maker's own expertise and investigation to reach a figure, with no hearing and no obligation to give reasons.
The Arbitration Act, 1991, S.O. 1991, c. 17, s.7(1), shows what machinery an arbitration clause carries that an expert-determination clause never mentions: “the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding.” Shall — not may. Section 7(2) lists the only grounds on which a court may refuse the stay — a closed list, and a claim being about fraud in the underlying deal is not on it, so an arbitration clause is not avoided just by pleading fraud.
Neither that mandatory stay nor s.45's leave-based appeal on a question of law has anything to attach to where the clause never described a hearing, never provided for submissions or evidence, and never required reasons — that is the shape of an expert determination, regardless of what the parties' own counsel called it. It is still reviewable, just on a narrower common-law standard: a court will interfere only for fraud, collusion, or a departure from the expert's mandate — not because the expert may have gotten the accounting wrong.
The label on the clause does not control. What controls is whether it describes an adversarial hearing (arbitration, with s.7's mandatory stay available) or simply asks an expert to investigate and produce a number (expert determination, reviewable only for fraud, collusion or exceeding the mandate). A working-capital dispute referred to “an independent accountant” with no hearing provided for is almost always the second.
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