Are any types of dispute considered non-arbitrable? What is the approach used in determining whether or not a dispute is arbitrable?
Arbitration is not allowed in matters that are not, by law, potentially capable of amicable settlement between the parties. For example, matters that would give rise to criminal charges that cannot be waived cannot be subject to arbitration. Also family law matters are not arbitrable. Transfer of title to real property is not arbitrable.
Austrian law determines that in principle all proprietary claims are arbitrable (section 582 ACCP). Non-proprietary claims are still arbitrable, however, if the parties are entitled by law to settle these claims.
The law expressly excludes the arbitrability of claims in family law matters as well as in certain disputes regarding tenancy law. Also social security law claims are not arbitrable.
Consumer related and some employment related matters are in principle arbitrable.
However, the arbitration agreement may only validly be concluded after the dispute has arisen. This de facto excludes the ‘arbitrability’ in such matters.
A limited number of types of disputes may not be resolved via arbitration. Parties are, however, free to arbitrate anti-trust and intellectual property disputes, for example. Those disputes that cannot be resolved through arbitration include those relating to:
• Civil status and capacity of natural persons.
• Divorce and judicial separation of spouses.
In addition, disputes involving certain categories of public authorities and entities cannot be arbitrated.
In principle, certain types of consumer and employment disputes also cannot be resolved through arbitration.
However, the Court of Cassation has held that this provision does not apply in the same way to international arbitration (Court of Cassation, First Civil Chamber, 5 January 1999, No. 96-21.430, Zanzi). For example, in the case of an international employment contract containing an arbitration clause, the French courts considered the arbitration clause not to be null and void but that the employee was nevertheless not prevented from initiating a claim before the French Employment Courts (as would normally be the case with a valid arbitration clause) (Court of Cassation, Social Chamber, 16 February 1999, No. 96-40.643).
Under the Arbitration Act, provided that it is not exclusively submitted by a special law to the State courts or to compulsory arbitration, all persons may enter into arbitration agreements relating to disputes regarding economic interests. Given this, all commercial disputes can be subject to arbitration. Previous laws have also admitted arbitration in formerly unthinkable areas such as enforcement proceedings, administrative and tax law. Nevertheless, the Law that admitted enforcement proceedings through institutionalised arbitration – a truly innovative feature of Portuguese legal framework – was revoked in 2013.
Disputes that do not involve economic interests can be submitted to arbitration procedures provided that the parties are entitled to conclude a settlement on the right in dispute.
As a matter of principle, all disputes are arbitrable, unless there is a legal provision which states otherwise.
As far as national arbitration is concerned, the following matters are exempt from arbitration, according to the Civil Procedure Code: civil status litigation, litigation with respect to legal capacity of persons, inheritance litigation, matters arising out of or in connection with family relations, as well as litigation regarding rights that the parties cannot dispose of (eg in labour and employment law matters where the law expressly provides that a party cannot waive the legal rights established in their favour, criminal matters - except for civil aspects arising in connection thereto).
Regarding international arbitration, a dispute can be referred to arbitration provided that:
• it is of a patrimonial nature;
• it deals with rights the parties may freely dispose of (this excludes, among others, disputes over personal civil status and legal capacity, inheritance and family matters and labour law disputes); and
• it falls outside the exclusive jurisdiction of the courts pursuant to the law of the seat of arbitration.
While the procedural rules regulating domestic proceedings may still occasionally raise questions regarding the capacity of public and state-owned bodies to conclude arbitration agreements, no such limitations are imposed in respect of international arbitration. Thus, international arbitration parties may not seek to evade arbitration to which they have previously agreed by invoking internal law provisions that purport to prohibit entering into arbitration agreements.
A dispute is considered non-arbitrable if the subject matter is not capable of being settled by agreement between the parties. This is the case e.g. if the relief requested would be illegal, criminal, or constitute pactum turpe. A dispute is also likely non-arbitrable in cases where third party’s consent is required and in some aspects as far as it concerns rights in rem. Furthermore, a claim for relief, which can exclusively be granted by a court or a state authority, is non-arbitrable. Such cases include declaration of bankruptcy, taxation, existence and validity of patents, certain competition law disputes such imposition of fines, ordering a company to cease and desist activities harmful to competition, and granting clearance for acquisitions of businesses.
The general rule under the CPC is that arbitration is permissible in resolving disputes where “conciliation” is permissible, ie where the power to dispose of the right(s) in dispute rests solely with the concerned private parties, absent a higher or parallel State interest. Therefore, matters in relation to which conciliation is not permissible are non-arbitrable. Such matters are typically those involving public policy considerations. Classifying a matter as pertaining to public policy is within the power of UAE courts in interpreting the law, but there are well-known examples of non-arbitrable matters in the UAE which can provide guidance to parties. Those include:
- matters listed in Article 3 of the UAE Civil Code which pertain to public policy (eg the circulation of wealth, personal status, and rules and foundations upon which the UAE society is founded);
- matters listed in Article 733 of the UAE Civil Code (eg the cancellation of a debt by another debt);
- commercial agency and distributorship disputes;
- criminal matters, including issues of forgery; and
- labour disputes.
An ongoing debate exists concerning the arbitrability of certain types of real estate disputes. In 2012, the Dubai Court of Cassation held that disputes relating to issues of registration of properties in the real estate register in Dubai in the context of off-plan sales of units were non-arbitrable on public policy grounds. Courts in Abu Dhabi and Dubai later clarified that this restriction on arbitrability is limited to disputes relating to the “registration” of real estate property only, not to issues pertaining to parties’ rights under any contract dealing with real estate.
Under the DIFC Arbitration Law, the only disputes that are not arbitrable are disputes relating to employment or consumer contracts for the supply of goods and services (other than residential disputes). Exceptions to the non-arbitrability of such disputes exist where:
- the employee or consumer provides its written consent to submitting the dispute to arbitration after the dispute has arisen;
- the dispute is referred to arbitration by the employee or consumer; or
- the DIFC Court permits the referral to arbitration on the grounds that it is satisfied that the referral to arbitration will not be detrimental to the interests of the employee or consumer.
The ADGM Arbitration Regulations do not set out any matters that are not arbitrable.
In international arbitration, art. 177 para 1 PILA and the case law of the Swiss Federal Tribunal provide for a broad definition of disputes deemed arbitrable as any dispute of financial interest, i.e. any claim that ultimately pursues an economic purpose, may be subject of an arbitration procedure. Thus, also monetary claims in family and inheritance law, monetary claims relating to intellectual property and competition as well as antitrust law are deemed arbitrable in Switzerland.
In contrast, matters concerning the legal status (e.g. marriage, separation, divorce, matrimony, paternity, adoption etc.) and some matters relating to insolvency law (opening of bankruptcy proceeding, arrest etc.) are deemed non-arbitrable.
The definition of arbitrability in Swiss domestic arbitration is more restrictive than its understanding in Swiss international arbitration. Pursuant to art. 354 CCP, a dispute may only be submitted to an arbitral tribunal if the parties are free to dispose over the rights and duties in question. In particular and contrary to the situation in international arbitration, labor law disputes in a domestic context are solely arbitrable if the respective arbitration agreement was concluded a minimum of one month after the end of the employment relationship (art. 341 para 1 Swiss Code of Obligations). In addition, labor law rights confirmed by the Swiss Code of Obligations as non-waivable will also not be deemed arbitrable in a domestic context.
An arbitral tribunal with seat in Switzerland will apply Swiss law to determine the arbitrability of a dispute, regardless of the law that applies to the underlying agreement.
Yes, in theory. Arbitration agreements contrary to public policy are not determinable by arbitration (section 10 of the Act). To date, no such disputes have been identified. The High Court confirmed over 25 years ago that competition law disputes are arbitrable in New Zealand (Attorney-General v Mobil Oil NZ Ltd  2 NZLR 649 (HC)).
Malaysia has taken a broad approach to arbitrability as reflected in section 4, AA which has, thus far, been untested in Malaysian courts. However, the Malaysian Court of Appeal indicated that fraud is arbitrable under Malaysian law.
One may identify potentially non-arbitrable disputes based on the facts of the case, the framing of the claim, and the relief sought. Typically, disputes concerning matters of public policy, such as custody disputes and illegal contracts, may not be arbitrated. Claims impacting a wide class of non-parties, as in the case of minority shareholder oppression claims, are potentially non-arbitrable. Similarly, that a claim may only be remedied by an exclusively judicial relief may indicate that the dispute is non-arbitrable.
Because the FAA contains no restrictions on the disputes that may be arbitrated, the United States permits arbitration in a wider range of disputes than most countries. Indeed, any dispute of a civil or commercial nature between individuals or corporate entities can be arbitrated. Consumer, employment, antitrust, franchise and civil rights claims are all arbitrable in the United States.
However, agreements to arbitrate are subject to the restraints of fundamental public policy. A party resisting the enforcement of an arbitration agreement must therefore demonstrate that Congress specifically intended that the claim not be arbitrable. Gilmer v. Interstate/Johnson Lane Corp, 500 U.S. 20, 26 (1991).
The IAA provides that a dispute which the parties have agreed to submit to arbitration will be arbitrable unless it is contrary to public policy to do so or the subject matter of the dispute is not capable of settlement by arbitration under the laws of Singapore. IAA, Section 11; IAA, First Schedule, Article 34(2).
Guidance on what may be a non-arbitrable matter can be drawn from decisions of the Singapore courts. For example:
- the Singapore Court of Appeal has held that certain disputes that arise upon the onset of insolvency, including transaction avoidance and wrongful trading, would not be arbitrable. Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore)  SGCA 21 (Singapore Court of Appeal); and
- the Singapore High Court has held that claims of minority oppression under Section 216 of the Singapore Companies Act would ‘straddle the line’ between arbitrability and non-arbitrability, and indicated that many if not most of the minority oppression claims would be non-arbitrable. Silica Investors Ltd v Tomolugen Holdings Ltd and others  3 SLR 815 (Singapore Court of Appeal).
Yes, can’t be submitted to arbitration the litigious that deal with inalienable rights, so it is necessary that the dispute involves property disposable rights, in accordance with Article 1 of Law nº 9.307/96.
A right is disposable when it may or may not be freely exercised by the holder without cogent rule imposing compliance with the precept, under penalty of nullity or annulment of the act practiced with his infringement. Thus, are disposable those assets that can be freely sold or traded, because they are uncumbered and because the alienor has full legal capacity to do so.
In general, are not under the scope of the disposable right issues relating to Family Law (in particular the status of persons, such as affiliation, parental rights, marriage, alimony), those relating to Succession Law, those whose object things out of the trade, the natural obligations, those relating to Criminal Law, among many others, since these matters are off limits that can act the autonomy of the will of the litigants.
However, these conclusions aren’t sufficient to exclude absolutely of the scope of the arbitration any demand that involves Family Law or Criminal Law, because the proprietary consequences both in one case as in the other may be subject of extrajudicial solution. That is, if it is true that a demand which concerns the right to provide and receive alimony comes out right, it is no less true that the value of the allowance can be freely agreed upon by the parties (and this makes this an arbitrable issue).
Thus, are arbitrable the causes that deal with matters in respect of which the State does not create specific reserve under the guard of the fundamental interests of the community, and since that the parties can freely dispose about the asset on which they litigate.
Criminal and divorce matters are not arbitrable. Generally, all commercial matters are arbitrable, although some Canadian jurisdictions impose restrictions for consumer protection and employment matters. Depending on the jurisdiction, some other matters are also considered non-arbitrable.
In Panama, matters governed by Criminal Law, Labor Law, Consumer Law or Family Law are considered non-arbitrable.
As a general rule, the matters that cannot be subject to negotiation and disposition of rights and obligations, and that cannot be waived by the parties, cannot be referred to arbitration.
Yes they are. Art. 2 of the Arbitration Law provides that disputes related to non-disposable matters by the parties cannot be arbitrated.
Principally, the disputes arising from the areas which the parties cannot dispose on them without constraint, are accepted as non-arbitrable. Likewise, the arbitration in Turkish law is seen as a continuation of the freedom of will and contract of the parties. Therefore, according to the Local Law, disputes in relation to the in rem rights of immovable properties located in Turkey or the disputes which are not subject to the parties’ wills are non-arbitrable. Despite the commercial disputes are arbitrable under Turkish law, the administrative, criminal, family, labor or bankruptcy law issues are considered as non-arbitrable. The Turkish local courts and the Court of Appeals are generally intended to apply Turkish laws to the disputes; and to consider the disputes in relation to the public order are non-arbitrable.
If the parties to an arbitration agreement have chosen a seat in Germany, the arbitrability of their dispute is determined pursuant to section 1030 ZPO. As a general rule, any pecuniary claim may become the subject matter of an arbitration agreement. An arbitration agreement regarding nonpecuniary claims has legal effect insofar as the parties to the dispute are entitled to conclude a settlement regarding the subject matter of the dispute (section 1030 (1) ZPO).
German law is generally “arbitration friendly” and allows for a broad application of arbitration agreements. It makes exceptions only where it sees a need to protect certain rights and legal interests. In those cases, the German legislator reserved the state courts a decision monopoly. For example, legal disputes arising in the context of a tenancy relationship for residential space in Germany are per se nonarbitrable (section 1030 (2) ZPO). Pursuant to section 1030 (3) ZPO, further stipulations according to which disputes may not be subjected to arbitration proceedings may be found outside the Tenth Book. For example, laborlaw related disputes are also nonarbitrable (sections 101 et seqq. ArbGG).
Under Italian law disputes concerning the following are not arbitrable: rights which the parties cannot dispose of (e.g. rights strictly pertaining to the individual such as marriage, citizenship, parenthood and nationality) and those that cannot be arbitrated under specific laws (e.g. employment disputes, disputes regarding tax issues, disputes reserved to the administrative courts).
The question of whether a dispute is arbitrable is decided under Italian law.
Almost all commercial disputes are arbitrable, save for a few exceptions such as (a) breach of statutory employment rights, (b) insolvency and (c) criminal matters.
The Arbitration Act does not apply to arbitration under an agreement relating to the terms or conditions of employment or the remuneration of any employees and to an arbitration concerning trade disputes under Section 70 of the Industrial Relations Act 1946.
The Arbitration Act does not apply also to arbitrations conducted by a property arbitrator appointed under Section 2 of the Property Values (Arbitration and Appeals) Act 1960.
Lastly, the Arbitration Act provides that consumer disputes are only arbitrable at the election of the consumer where the arbitration agreement contains terms that has not been individually negotiated and where the dispute involved a claim for an amount not exceeding €5,000.
In principle disputes concerning proprietary or non-proprietary rights, except for child/spousal support cases, are arbitrable, if they could be the subject of a court settlement.
Thus, in determining whether a dispute is arbitrable, the settleability criterion will be applied.
In general, that a dispute lacks arbitrability when the public interest or interests of third parties are at stake. It is accepted that the following disputes lack arbitrability:
- Disputes over personal rights of individuals (e.g. defamation)
- Disputes over entries in public registers
- Certain non-monetary family matters.
Arbitrability of disputes involving the validity of corporate resolutions is controversial.
Criminal matters, matrimonial and family matters, disputes concerning minors and disputes with public policy implications are non-arbitrable in Cyprus. In addition, recent Cypriot caselaw has adopted the existing common law approach that a Tribunal will have limited powers to make orders which affect the status of a Cyprus Company such as a winding up order or rectification of a company’s register of members, though the substantive dispute may be arbitrable regarding its disputed facts.