Is the principle of competence-competence recognised in your country?
International Arbitration (3rd edition)
The arbitration tribunal in the first instance rules on all these jurisdictional issues (competence-competence). The arbitration clause is deemed separate from the underlying agreement for this purpose. At the end of the arbitration, a party can bring an action in court for nullity of the arbitration award on the basis of lack of jurisdiction. In all cases, jurisdictional challenges must be recorded in the arbitration process before submissions on the merits. Otherwise, the party bringing these challenges can be deemed to have waived its right to challenge.
In France, the principle of competence-competence is widely recognised and applied (Article 1448, CCP). Application of the principle means that:
- In the first instance, the arbitral tribunal has jurisdiction to rule on its own jurisdiction.
- A French court must decline jurisdiction in the presence of an arbitration agreement and let the arbitral tribunal decide.
However, this principle does not mean that national courts can never have a say on the jurisdiction of an arbitral tribunal. Before the constitution of the tribunal, a court can accept jurisdiction if the arbitration agreement is manifestly void or manifestly not applicable. The threshold for this test is very high, and French judges decide the issue on a prima facie basis (see Court of Cassation, First Civil Chamber, 7 June 2006, No. 03-12.034). Any ambiguity is resolved in favour of the tribunal’s power to decide the issue.
French courts can also review the issue of the tribunal’s jurisdiction at the setting-aside stage. In such a case, the court will review the issue de novo and its review will not be bound by the factual and legal findings of the tribunal.
According to article 16 of Law 101/1987 the principle of competence-competence is recognized in Cyprus.
Yes, the principle of competence-competence is recognized in the Czech Republic. Under section 15 (1) of the Arbitration Act, arbitrators are entitled to rule on their own jurisdiction.
An objection by the parties can be raised according to section 15 (2) until the commencement of the proceedings, i.e the first action in the proceedings.
The principle of competence-competence is recognized under Romanian law.
Yes, under Act on Arbitration the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.
As for jurisdictional objections before the tribunal, tribunal may rule on them as a preliminary issue, or in the award on the merits.
If the tribunal rules on jurisdiction as a preliminary issue, each party may request the competent court to decide on jurisdiction within 30 days from receipt of the decision on jurisdiction. Decision of the court on the matter is subject to no appeal.
Alternatively, after the tribunal renders the award, the courts can review the existence of grounds for jurisdictional objection only in a procedure of setting aside or annulment of the award.
No. Pursuant to Article 20 of the Arbitration Law, the tribunal’s jurisdiction will be determined by the arbitration institution or the court. The decision rendered by the court shall prevail if one party resorts to the arbitration institution while the other to the court.
a. According to the Danish Arbitration Act 2005 the Arbitral Tribunal decides on its own competence.
The principle of competence-competence is incorporated in Article 1180 § 1 CPC, according to which an arbitral tribunal may rule on its own jurisdiction, including the existence, validity or effectiveness of the arbitration agreement.
If the tribunal issues a separate decision upholding its jurisdiction, then either party may seek a ruling from the court within two weeks from service of the decision. Initiation of a proceeding before the court does not stay the arbitration proceedings. The decision of the court is subject to interlocutory appeal.
If the tribunal rules that it lacks jurisdiction, there is no recourse to the courts available. Such decision is binding on the court, which in such case is not allowed to dismiss the claim based on assertion of the arbitration agreement.
The principle of competence-competence applies to arbitral tribunals based on art. 178 para 1 PILA.
Swiss court practice has established principles favouring arbitration over state court litigation, at least where the parties have agreed on arbitration seated in Switzerland. When a state court's jurisdiction is contested based on the existence of an arbitration agreement, Swiss court practice directs any state court seized to refer the matter for review to the arbitral tribunal stipulated in the arbitration agreement in question, if the arbitration agreement on its face appears to be valid and capable of being performed by the parties. This is referred to as the negative effect of competence-competence, which applies in Switzerland with regard to arbitral tribunals seated in Switzerland. Thus, if an arbitration agreement provides for arbitration seated in Switzerland, a state court (wrongly) seized by a party must even in case of doubt refrain from reviewing the arbitration agreement (i.e. its validity and scope) and refer the matter to arbitration.
UAE - Federal
Article 19 of the UAE Arbitration Law provides for the principle of ‘Kompetenz-Kompetenz’ by providing that the Arbitral Tribunal may rule on any plea as to its jurisdiction.
The Arbitral Tribunal’s ruling may form part of the answer of a ‘preliminary question’ or as part of the final arbitral award.
Should the Arbitral Tribunal decide the issue of jurisdiction as a ‘preliminary question’, this decision may be appealed within 15 days of notice of that decision. The appropriate court will then issue its decision within 30 days. The decision of the court is not subject to appeal.
DIAC Rules (Article 6) also expressly confer power on an Arbitral Tribunal to determine its own jurisdiction.
UAE – Free-zone Jurisdictions
The DIFC Arbitration Law
An Arbitral Tribunal may rule on its own jurisdiction (Article 23).
Should the Arbitral Tribunal rule in favour of its own jurisdiction as part of a preliminary question, this decision (‘subject to any process agreed between the parties’) can be appealed by any party to the DIFC Court of First Instance.
This appeal must be made within 30 days of receipt of the decision of the Arbitral Tribunal, and the arbitral process shall not be stayed pending the outcome of the appeal.
The decision of the DIFC Court of First Instance on the jurisdiction of the Arbitral Tribunal is not subject to appeal.
Article 23 of the DIFC-LCIA Arbitration Rules also provides the Arbitral Tribunal with authority to rule on its own jurisdiction and authority.
The Arbitral Tribunal may decide upon any challenge to its jurisdiction through either an arbitral award as to its jurisdiction or later within the arbitral award as to the merits of the dispute.
An arbitration pursuant to the DIFC-LCIA Arbitration Rules (Article 23.5) shall treat the parties as having agreed not to apply for relief from a state court or other legal authority regarding the jurisdiction or authority of the Arbitral Tribunal.
The parties relinquish such rights after the constitution of the Arbitral Tribunal, except:
by ‘prior agreement in writing of all parties to the arbitration’; or
with ‘prior authorisation of the Arbitral Tribunal, or
following the’ Arbitral Tribunal’s ‘award on the objection to its jurisdiction or authority’.
Unless the parties have agreed otherwise, an Arbitral Tribunal may rule on its own ‘substantive jurisdiction’ pursuant to the ADGM Regulations (Regulation 24).
The Arbitral Tribunal’s determination may be challenged through the processes agreed by the parties or in accordance with the ADGM Regulations.
The Arbitral Tribunal’s response to a challenge may be answered as either a ‘preliminary question’ or as part of its award on the merits, unless the parties have agreed on how the Arbitral Tribunal should decide such a challenge.
The Court may determine the question of the ‘substantive jurisdiction’ of the Arbitral Tribunal, upon the application by a party to the arbitration, on notice to the other party.
A party may, however, ‘lose it right to object’ pursuant to Regulation 10.
The application to the Court to determine the question of the Arbitral Tribunal’s ‘substantive jurisdiction’ will not be considered unless:
‘(a) it is made with the agreement in writing of all the other parties to the proceedings’; or
‘(b) it is made with the permission of the Tribunal’’ (Regulation 26)
The Court must, however, be satisfied that:
its decision will save substantial costs;
there was no delay in making the application; and
there is good reason why the Court should decide this matter.
Should this application be made without the agreement of the parties, the grounds for the Court deciding the matter shall be contained within the application.
The decision of the Court shall not be subject to appeal, and unless agreed otherwise by the parties, proceedings shall not be stayed pending the Court’s decision.
Yes, the 1996 Act recognises the principle of competence-competence (s.30(1)).
Yes. Article 20(1) of the Law of Arbitration provides that "the arbitration tribunal shall decide on any pleas related to its jurisdiction, including those based on absence of an arbitration agreement, expiry or nullity of such agreement or non-inclusion of the dispute subject-matter in the agreement."
The FAA does not address the issue of a tribunal’s competence to determine its own jurisdiction. U.S. courts, however, have recognized the principle of competence-competence when there is clear and unmistakable evidence that the parties intended for the arbitral tribunal to determine its own jurisdiction. See AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649 (1986). Some courts have held that the incorporation of institutional rules that provide for the arbitrator to determine its own jurisdiction is akin to the parties directly addressing the issue in their agreement. See e.g. Terminex Intern. Co. v. Palmer Ranch Ltd., 432 F.3d 1327 (11th Cir. 2005).
Austrian arbitration law recognises the principle of “competence-competence”. Thus, the arbitral tribunal may rule on a party’s challenge to the arbitral tribunal’s own jurisdiction. Lack of jurisdiction of the arbitral tribunal may be raised as a ground to set aside an arbitral award. If such proceedings are initiated, the question of jurisdiction will be reviewed by the Austrian Supreme Court.
By the provisions of section 12(1) of the ACA, an arbitral tribunal is competent to rule on questions pertaining to its own jurisdiction and on any objections with respect to the existence or validity of an arbitration agreement. An objection that the arbitral tribunal lacks jurisdiction must be raised no later than the time of submission of the points of defence, and a party is not precluded from raising such plea by reason that he or she has appointed, or participated in the appointment of, an arbitrator.
Furthermore, an objection that the arbitral tribunal is exceeding the scope of its authority can be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the proceedings. However, an arbitral tribunal shall rule on any such objections either as a preliminary question or in an award on the merits, and such ruling is final and binding. The ACA makes no provision for circumstances in which parties can be precluded from raising jurisdictional objections.
Even though the ACA does not specifically state that a court can determine the issue of an arbitral tribunal’s jurisdiction, it is not precluded from doing so if any of the parties approaches it. This is particularly so where an arbitrator proceeds with arbitration even where circumstances exist that could give rise to justifiable doubts as to his or her impartiality or independence (section 8(3)(a) ACA).
Further, the court can be asked to determine the issue of jurisdiction and competence of an arbitral tribunal after the award has been made and proceedings have been commenced in such instances seeking to set aside or refuse the recognition and enforcement of arbitral awards. Arbitrators exceeding their mandate have been held to constitute misconduct on the part of the tribunal for which an award may be set aside under section 30 of the ACA. See Taylor Woodrow Ltd v GMBH (1991) 2 NWLR (Pt. 175) 604.
Yes, it is. Art. 18 (1) LAV determines that the arbitral tribunal may decide upon its own jurisdiction even if for such is necessary to determine the existence, validity, efficacy or applicability of the arbitration agreement or of the agreement in which is inserted.
The LAV also embraces the “negative effect of the arbitration agreement”. Art. 5 (1) determines that the State court in which is submitted a lawsuit relating to an issue covered by the arbitration agreement should, at request of the Respondent (lodged until the moment that it should submit its first memorial regarding the substance of the cause), dismiss the case, except if the arbitration agreement is clearly null, if it is or became inoperative, or is incapable of being enforced.
Both the ICA and DAA recognise the competence-competence principle in line with the wording of Article 16 of the UNCITRAL Model Law.
Yes. Article 16 of the Model Law deals with the competence of an arbitral tribunal to rule on its jurisdiction. In circumstances where the existence of an arbitration clause is not in dispute, the Irish courts will be very slow to interfere with the arbitrator's ruling on his own jurisdiction having regard to the competence-competence principle
The principle of competence-competence is recognized in Norway. The arbitral tribunal rules on its own jurisdiction, including objections with respect to the existence or validity of the arbitration agreement.
If the arbitral tribunal rules that it has jurisdiction, each party may, within one month of having received that ruling, bring the issue before the courts. The arbitral tribunal may continue the arbitral proceedings and determine the dispute even though the issue of the arbitral tribunal’s jurisdiction is pending before the courts.
Yes - section 1040 (1) sentence 1 ZPO empowers the arbitral tribunal to rule on its own jurisdiction as well as on the existence or validity of the arbitration agreement. Should the arbitral tribunal issue an interim decision on an objection regarding its competence, the party may, however, apply for a court decision within one month after having received the interim decision in writing, section 1040 (3) ZPO. Furthermore, any decision of an arbitral tribunal to decide on its own jurisdiction is of course subject to review in potential enforcement or setting-aside proceedings.
The principle of competence-competence is complemented by section 1040 (1) sentence 2 ZPO which stipulates the principle of separability according to which an arbitration clause shall be treated as a separate agreement. Consequently, the arbitral tribunal may examine the validity of the arbitration clause independent of the other terms of the contract. Apparently, both principles (competence-competence and separability) are interdependent and aim at enabling the parties to obtain at least preliminary assurance about the jurisdiction, even though the state court retains the last word, particularly if one of the arbitral parties intends to contest the tribunal's decision on its jurisdiction.
The Croatian Arbitration Act expressly provides that the arbitral tribunal is authorized to decide on its jurisdiction, including any objections regarding the validity or existence of the arbitration agreement.
The ICAL does recognize the principle of competence-competence, as its Article 16(1) states that the arbitral tribunal may decide on its own competence, even regarding exceptions that may arise relating to the existence or validity of the arbitration agreement. This principle is also found in Article 16 of the Rules of International Commercial Arbitration of CAM Santiago, on the same terms as in the ICAL.
In domestic arbitration there are no rules that explicitly confirm the principle of competence-competence. Notwithstanding this, the principle is recognized by courts and arbitral decisions.
Consequently, in the event that a party commences an arbitral proceeding in apparent breach of an arbitration agreement, the matter shall be submitted to the decision of the arbitral tribunal, which is the authority entitled by law to rule on its own competence.