Can I be forced into arbitration instead of court to pursue an indemnity claim?

Yes, if the purchase agreement contains a valid arbitration clause covering indemnity disputes. Ontario's Arbitration Act generally requires a court to stay its own proceedings and direct the parties to arbitration where they have validly agreed to resolve their disputes that way, with only narrow exceptions, so an arbitration clause in a signed purchase agreement is typically enforceable rather than something a party can simply ignore by filing in court instead.

Many purchase agreements use a layered approach to dispute resolution rather than sending every disagreement to the same forum: financial calculation disputes, such as a working capital adjustment or an earn-out calculation, are often referred first to an independent accountant whose determination on the accounting question is treated as final, while broader legal disputes, including most indemnity claims for breach of representations, go to arbitration or court exactly as the agreement specifies. Which forum actually applies to a given indemnity claim depends on how the specific dispute-resolution clause is worded, so it is worth reviewing that clause closely before assuming litigation is available.