October 2009
Introduction
One of the best known concepts and founding principles of international commercial arbitration is the doctrine of competence-competence, known by the French as competence de la competence whilst the German label is Kompetenz/Kompetenz. Simply, this doctrine gives the arbitrators power to rule on their own jurisdiction first, the positive effect, whilst preventing the intervention by national courts to examine the arbitrators’ jurisdiction, known as the negative effect. The reasoning and justification for this doctrine is to prevent obstruction and delay of the arbitral proceedings. In lay terms, it means “nothing more than that arbitrators could, subject to later review, ‘look into their own jurisdiction without waiting for a court to do so’ and need not ‘stop arbitral proceedings to refer a jurisdictional issue to judges’”.[1]
According to John Barceló this doctrine addresses the question, “who decides arbitrability - courts or arbitrators’?”[2] To answer this question Barceló believes it all has to do with timing and divides the court-arbitration process into three stages. Stage 1 “encompasses litigation and whether the court should hear the dispute or send the parties to arbitration”.[3] Stage 2 incorporates the arbitrators’ ability to hear the dispute or decline jurisdiction, whilst stage 3 involves judicial review of the award, either to set-aside or have the award recognised and enforced.[4]
At Stage 1, subject to the parties are location, the court or the arbitrator can decide whether a dispute is arbitrable or is to be heard by the court. However, arbitration-friendly states do limit court intervention at Stage 1. If a party goes directly to stage 2 and the other party challenges jurisdiction of the arbitral tribunal before the court, it is generally accepted that the arbitrator decides this question but it is not uncommon for the court to make a ruling. Once again, who decides would be dependent upon the location of parties and the laws of that state. Usually there is no issue with court intervention at stage 3.
The positive effect of the doctrine is clear and unambiguous. It is the negative effect, that is, whether the arbitral tribunal is the first to decide its own jurisdiction, not the court, which creates controversy. In other words, in order to allow arbitrators to rule on their own jurisdiction at stage 2 as an initial matter, court jurisdiction at stage 1 should be constrained. Barceló believes the challenge is finding the right balance between avoiding arbitration-obstructing tactics at stage 1 and protecting parties from being forced to arbitrate without their legitimate and genuine consent.[5]
Emmanuel Gaillard and Yas Banifatemi submit that the courts should limit review to a prima facie determination that the agreement is not ‘null and void, inoperative or incapable of being performed’.[6] A prima facie determination is one where the court finds that an arbitration agreement exists and that it is valid.[7] In addition, “the arbitrators must be the first judges of their own jurisdiction and that the courts’ control is postponed to the stage of any action to enforce or set aside the arbitral award rendered on the basis of the arbitration agreement.”[8] This is known as the rule of priority.
It is this interpretation of the negative competence-competence doctrine which varies from country to country. Decisions from different jurisdictions relating to this limb of the doctrine are discussed.
The UNCITRAL Model Law[9]
Within the Model Law there are two articles relevant to the negative competence-competence doctrine, articles 8[10] and 16.
It is debateable whether a court under article 8(1) is limited to a prima facie finding or a full judicial determination of the existence and validity of an arbitration agreement. The words “unless it finds that the agreement is null and void, inoperative or incapable of being performed” create confusion. These words are similar to article II(3) of the New York Convention, so one can interpret these Articles based on the intention of the drafters of the Convention. The New York Convention is drafted on a pro-enforcement basis, so it would be reasonable to conclude that article 8(1) would attract only prima facie scrutiny from the court unless it finds that the agreement is manifestly invalid.
In support of this view, Swiss courts interpret the language used in article II(3) of the New York Convention as requiring only a prima facie verification of the arbitration agreement.[11] Article 16(1)[12] codifies the positive competence-competence doctrine, whereas sub-articles 16(3)[13] and 8(2)[14] provide for a limited negative competence-competence doctrine. One must bear in mind the history of these texts and that these provisions were a result of compromise. Certainly, a court could give an arbitration agreement prima facie scrutiny but the discretion is still present for a full judicial review if so desired. Notwithstanding, in jurisdictions that have adopted the Model Law, courts have interpreted the negative competence-competence principle into article 16.[15]
The Swiss Approach
The positive competence-competence principle is codified within Article 186(1)[16] of the Federal Code on Private International Law 1997 (‘FCPIL’) whilst the negative competence-competence doctrine is contained within article 7.[17]
In Fondation M[18] the Swiss Federal Tribunal distinctly recognised the need to protect the arbitrators’ power to rule on their own jurisdiction without court interference until the arbitrators had made their decision. Even so, any judicial interpretation at a later stage is limited to prima facie review to confirm the existence and validity of the arbitration agreement.[19]
A unique feature of the FCPIL is article 9,[20] relating to lis pendens.[21] Where concurrent proceedings are on foot, Article 9 operates to stay any actions filed after the original suit within the Swiss courts. Article 9 also applies to arbitrations as highlighted in the Swiss Federal Tribunal decision of Fomento.[22] The Court set aside an award where the arbitral tribunal’s seat was in Switzerland, finding that the arbitrator had no jurisdiction to decide a dispute already before the courts of Panama.[23]
This was a violation of article 9(1) and the reasoning that article 9(1) applied to arbitral proceedings included: public policy considerations; since both arbitral awards and court judgments are enforceable in the same way there is an interest to avoid contradictory decisions; and arbitral tribunals, like state courts, are bound by res judicata, so it follows that the closely connected principle of lis pendens should apply in the same way.[24]
Priority is not automatically given to the arbitral tribunal. Pursuant to article 9, jurisdiction is solely and purely based on chronological priority where the first action, petition or claim filed has priority and the requisite jurisdiction, which could be either the court or an arbitral tribunal.
However, Fomento created a presumption that was at odds with Swiss international arbitration, namely, that the rules applicable to the courts are, by analogy applicable to arbitral tribunals conducting arbitration in Switzerland. Fomento paved the way for unscrupulous parties to use tactical manoeuvres where an action is brought in foreign courts prior to the initiation of arbitration, in essence circumventing the arbitral process.[25] The Swiss legislator intervened and modified article 186(1)[26] of the FCPIL which now states:
“The arbitral tribunal shall decide on its own jurisdiction without regard to proceedings having the same object already pending between the same parties before another State court or arbitral tribunal, unless there are serious reasons to stay the proceedings.”
The French Approach
The competence-competence doctrine is a salient feature in French jurisprudence.[27] The negative competence-competence principle is codified within article 1458 of the French Code of Civil Procedure[28] where a French court is incompetent to hear any questions relating to an arbitration agreement if an arbitral tribunal is already constituted. The court must refuse jurisdiction and decline all questions as to the existence, validity and interpretation of the said arbitration agreement.
However, if the arbitral tribunal has not been constituted, the court will be permitted limited scrutiny of the arbitration agreement, namely, whether prima facie there is a valid arbitration agreement. If there is, the dispute is referred to arbitration, where the arbitrators are first to decide any jurisdictional challenges.
Barceló comments that the French approach raises an issue in a case where a genuine challenge is refused a hearing by the court and an arbitrator determines that he or she incorrectly has jurisdiction. It is only at stage 3 that the challenging party can have the award set-aside. However, this raises the question of costs and whether the prevailing party will be able to recover the costs of the arbitration. The party preferring arbitration, who has already incurred the wasted costs of arbitration, also runs the risk of proceeding with the arbitration to find that the award is flawed and will not be recognised or enforced.
The Cour de Cassation confirmed the rule of priority in favour of arbitrators and the application of the negative competence-competence principle in American Bureau of Shipping.[29] Furthermore, the Cour de Cassation held that “the manifest nullity of the arbitration agreement to be the only obstacle to the principle [that an arbitrator is entitled to rule on his own competence] that establishes priority of arbitral competence to the rule on the existence, the validity and the scope of the arbitration agreement.”[30]
The Approach in the United Kingdom
The English Arbitration Act 1996 has codified the negative competence-competence doctrine in sub-section 9(4)[31] along similar terms as Article 8(1) of the Model Law. However, the same issue arises, namely, whether a court conducts a prima facie or full judicial review of the arbitration agreement.
This question can be answered in light of sections 30 – 32, which provide for, inter alia; arbitrators to rule on their jurisdiction (the positive effect);[32] the arbitrator, with the consent of the parties, may approach the court to decide a preliminary point of jurisdiction;[33] and if the parties agree or the tribunal consents, they may petition the court to rule on the substantive jurisdiction of the tribunal.[34] These provisions assist parties so that any concern regarding wasteful proceedings are avoided by requiring an arbitrator to decide jurisdiction followed by rapid court review. This is a more restrictive interpretation of the negative doctrine which allows the court to first rule on jurisdiction issues.
Notwithstanding, the celebrated case of Fiona Trust[35] emphatically reaffirmed the severability of the arbitration agreement and found that the proper approach to section 9 is “to determine on the evidence before the court that [an arbitration agreement] does exist in which case (if the dispute falls within the terms of that agreement) a stay must be granted, in the light of the mandatory ‘shall’ in section 9(4).”[36]
Furthermore, the House of Lords opined:
“[T]he combination of sections 9 and 72[37] of the Arbitration Act shows that it will, in general, be right for the arbitrators to be the first tribunal to consider whether they have jurisdiction to determine the dispute. [A]lthough it is contemplated also by section 72 that a party who takes no part in arbitration proceedings should be entitled in court to ‘question whether there is a valid arbitration agreement’, the court should, in light of section 1(1) of the Act, be very cautious about agreeing that its process should be so utilised. If there is a valid arbitration agreement, proceedings cannot be launched under section 72(1)(a) at all.”[38] [sic]
It would be fair to conclude that unless an application is made pursuant to section 32, a court would be inclined to conduct a prima facie review.
The German Approach
Prior to 1998 the German Arbitration Act contained a unique feature if the parties expressly provided within the arbitration agreement that the arbitrators had the power to decide their own jurisdiction, then this would preclude all judicial review, even at stage 3.[39]
Today, the German Arbitration Act 1998 does not include this unique feature. Sub-sections 1032(1)[40] and (2)[41] allows a German court to decide the arbitrators’ jurisdiction if petitioned before the arbitral tribunal is constituted, closely following the French approach, based on full judicial determination and not merely a prima facie review.[42]
In addition, sub-section 1040(1)[43] codifies the positive competence-competence doctrine, whilst sub-sections 1040(2)[44] and (3)[45] provide for a limited negative competence-competence doctrine where any jurisdictional challenge must be stated in an interim award and is susceptible to review by the German courts within one month of its issue.
The Canadian Approach
The Canadian Supreme Court decision in Dell[46] verified the arbitrators’ power to determine its own jurisdiction first but qualified this general rule by finding that:
“a court should depart from the rule of systematic referral to arbitration only if the challenge to the arbitrator’s jurisdiction is based solely on a question of law, and the court must not, in ruling on the arbitrator’s jurisdiction, consider the facts leading to the application of the arbitration clause. The court must be satisfied that the challenge is not a delaying tactic that will unduly impair the conduct of the arbitration proceedings. This means the court might decide to allow the arbitrator to rule first on his or her competence would be best for the arbitration process”.[47] [sic] [emphasis added]
This reasoning is justified on the basis that courts have the expertise in resolving such questions. Such reasoning is weak and restricts the negative doctrine.
The Approach in the United States
The Supreme Court in Prima Paint[48] held that if the claim for nullity involved fraud in the inducement of the contract in its entirety, then such a decision is for the arbitrator. However, if the claim involved only the arbitration agreement, the court had jurisdiction.
First Options[49] and Howsam[50] are the leading authorities pertaining to the negative competence-competence doctrine. First Options ruled that arbitrability questions, that is, the existence and validity of the arbitration agreement, are for the courts but questions of scope are referred to the arbitrator.[51] Specifically, it is for the State to decide on the validity of an arbitration agreement, unless the parties have expressly agreed otherwise. However, before the arbitration agreement can take effect, the court must find that a valid agreement exists which is determined on a merits based test.
Howsam made the distinction where “procedural arbitrability” issues, in other words, is the issue to be arbitrated within the scope of the arbitration agreement, are for arbitrators at stage 1.[52]
Then the Supreme Court in Buckeye[53] held that “the jurisdiction to rule on the validity of the arbitration agreement is the arbitration tribunals’ when the jurisdictional challenge stems from a nullity action against the contract in its entirety.”[54] It distinguished between two situations: an annulment claim involving only the arbitration agreement; and an annulment claim of the contract in its entirety, which included the arbitration agreement. Any challenge based on the first scenario was not considered by the Court, whilst the second, involving Buckeye, ruled that it was a matter for the arbitrator, not the court.[55]
The US approach does not contain an effective negative competence-competence doctrine, requiring questions of existence and validity of the arbitration agreement to be fully reviewed by courts at stage 1.
The Mexican Approach
Article 1432 of Mexico’s Commercial Code codifies the positive doctrine providing for an arbitral tribunal to rule on its own jurisdiction, including any objections in relation to the existence and validity of the arbitration agreement. The negative doctrine is found in article 1424, where a court is not required to refer the parties to arbitration if the arbitration agreement is null and void, inoperative or incapable of being performed, along similar lines to article 8(1) of the Model Law.[56] One could reasonably conclude that any action before a court would attract a prima facie review of the arbitration agreement.
Unfortunately, this view is not shared by the state courts. Two Circuit Courts issued conflicting judgments relating to the negative doctrine. The Sixth Civil Court for the First Circuit held that the decision on the validity of the arbitration agreement fell under the jurisdiction of the arbitral tribunal;[57] whilst the 10th Civil Court for the First Circuit believed that the right belonged to the court.[58]
In Mexico, contradictions between Circuit Courts may be brought before the Supreme Court to rule on the correct view. The Mexican Supreme Court[59] “took the view that the authority to rule on the validity of the arbitration agreement fell within the purview of the court, not the arbitrator”,[60] ignoring article 1432 and effectively rejecting the doctrine of competence-competence.[61]
The Indian Approach
The Indian Arbitration and Conciliation Act 1996 includes the positive and negative effect at sections 16[62] and 45[63] respectively, which are based on articles 8(1) and 16 of the Model Law. The Indian Supreme Court has delivered three judgments concerning the negative doctrine that cannot be reconciled with one another.
The first, Shin-Etsu[64] held that the courts are to conduct a prima facie review of the arbitration agreement to determine that it is not null and void, inoperative or incapable of being performed. The Court used French and Swiss jurisprudence to support their decision and referred to the language, object and purpose of the Arbitration and Conciliation Act. The Court also opined that “the rule of priority in favour of the arbitrators’ is counterbalanced by the courts’ power to review the existence and validity of the arbitration agreement at the end of the arbitral process.”[65]
About three months later the decision in Patel Engineering[66] was handed down. In it, the court authorised a full judicial review based on the merits of the arbitration agreement, effectively ending the arbitral tribunal’s ability to rule on its own jurisdiction. Any argument that a prima facie review should be applied was dismissed.[67]
Justice Thakker, the sole dissenter, argued that the ability of the court to make a full and final determination of the existence of an arbitration agreement ultimately rendered section 16 futile.[68] Thakker J stated:
“Section 16 does not merely enable the Arbitral Tribunal to rule on its own jurisdiction, but requires it to continue arbitral proceedings and pass an arbitral award [and] allows the aggrieved party to make an application for setting aside the award in accordance with section 34. Section 16 can be described as a ‘self-contained Code’ as regards the challenge to the jurisdiction of the Arbitral Tribunal. As per the scheme envisaged by Parliament, once the Arbitral Tribunal rules that it has jurisdiction, it will proceed to decide the matter on merits and make an award. Parliament has also provided the remedy to the aggrieved party by enacting that he may make an application under section 34[69] of the Act. In the circumstances, the proceedings cannot be allowed to be arrested or interference permitted during the pendency of arbitration proceedings.”[70]
Almost 15 months after Patel Engineering, the Supreme Court delivered another decision, consistent with Shin-Etsu, in Agri Gold.[71] Although the existence of the arbitration agreement was not disputed, the court, obiter dictum, only conducted a prima facie review.
Shin-Etsu and Agri Gold are more in line with Continental European views whilst Patel Engineering follows the English and American approach.
The Chinese Approach
There is no express provision in either the Law of Civil Procedure 1991 or the Arbitration Law 1994 relating to the competence-competence doctrine, be it the positive or negative effect. The only relevant provision is article 20[72] where the parties may request CIETAC[73] to make a decision on the validity of the arbitration agreement. However, if the other party applies to the court for a ruling on the same question at the same time, the court will make the ruling.[74]
Jason Ju finds that this provision has two fundamental flaws: firstly, CIETAC as opposed to the arbitral tribunal makes the decision as to the validity of the arbitration agreement; and secondly, any jurisdictional challenge also includes arbitrability of the dispute and the scope of the arbitration agreement.[75]
In 2005 CIETAC revised its Arbitration Rules so that the power to determine the existence and validity of an arbitration agreement may be delegated to the arbitral tribunal[76] and is given prima facie scrutiny.[77]
The Lebanese Approach
In the case of Lebanon, the positive principle is codified within the Lebanese Code of Civil Procedure (‘LCCP’),[78] however, there is no equivalent provision for the negative doctrine. Notwithstanding, the Lebanese Arbitration Centre’s Arbitration Rules[79] provides a very limited version of the negative doctrine, but sheds no light on the primary question: does the court conduct prima facie scrutiny or a full judicial review?
It is debateable whether a court hearing a petition under article 764(2)[80] is limited to a prima facie finding or a full judicial determination as the words, “the arbitration clause is manifestly void or is insufficient to appoint the arbitrator” creates uncertainty. The reader should be aware that the LCCP was drafted on a pro-enforcement basis, so it would be reasonable to conclude that article 764(2) would attract only prima facie scrutiny by the Lebanese courts unless it finds that the agreement is “manifestly void or is insufficient.”
Although the case of Radio Delta v Interadio SAL[81] was decided by the Beirut Court of First instance, the least significant in Lebanon’s court hierarchy, the finding was heavily inspired by French jurisprudence. It was held that a court is only to examine the validity of an agreement to arbitrate by using prima facie scrutiny. This is now the generally accepted position in Lebanon.
The 1961 Geneva Convention[82]
A version of the negative doctrine was included in article VI(3),[83] although not as aggressive as the French approach. If court proceedings are instituted prior to the establishment of the arbitral tribunal, no negative effect arises. For article VI(3) to be agitated, arbitral proceedings must be instituted. Scrutiny of the arbitration agreement is limited to prima facie review unless there are good and substantial reasons to the contrary, such as a null and void arbitration agreement, for the court to proceed to the merits.
Conclusion
The competence-competence doctrine is designed to reduce the scope of jurisdictional challenges initially at the seat but certainly does not reduce the scope for challenges once the award is made, whether at the seat or elsewhere under the New York Convention. Whether a court conducts a prima facie or full judicial review of the arbitration agreement depends solely on where the petition is heard. The doctrine’s primary goal is to facilitate arbitral proceedings by severely limiting any initial court intervention and preventing obstruction and delay tactics by an unscrupulous party, nothing more.
European arbitration laws apply a minimalist approach to competence-competence where arbitrators may rule first on their own jurisdiction and any court intervention is limited to prima facie scrutiny. Other jurisdictions, such as the Americas and parts of Asia, prefer to conduct a full judicial review of the arbitration agreement, implementing a more restrictive form.[84]
The objectives of the competence-competence doctrine are best described by Fouchard and Gaillard:
“It is to allow the arbitrators to be not the sole judges, but the first judges of their jurisdiction. In other words, it is to allow them to come to a decision on their jurisdiction prior to any court or judicial authority, and thereby limit the role of the courts to the review of the award. The principle of competence-competence thus obliges any court hearing a claim concerning the jurisdiction of an arbitral tribunal – regarding, for example, the constitution of the tribunal or the validity of the arbitration agreement – to refrain from hearing substantive argument as to the arbitrators’ jurisdiction until such time as the arbitrators themselves have had the opportunity to do so. Taking both of its facets into account, the competence-competence principle can be defined as the rule whereby arbitrators must have first opportunity to hear challenges relating to their jurisdiction, subject to subsequent review by the courts.”[85]
The rule of competence-competence is specifically designed to protect and safeguard the arbitrators’ power to rule first on their jurisdiction without premature court intervention, while allowing for a review by the courts at the end of the arbitral process.[86] Another reason for the rule is to avoid additional costs and burdens of court proceedings where “the marginal cost of having an arbitrator determine the scope of the arbitration clause is low, while allocating the determination to a court, another decision maker, requires an additional transaction and an extra cost”.[87]
The contents of this article is intended to provide a general guide to the subject matter and does not constitute legal advice. Ferrer Lawyers always recommend that you obtain legal advice prior to entering into any contract. If you’re having contract issues or in a dispute requiring representation for arbitration proceedings call (02) 8823 3588 or email us with your enquiry at This email address is being protected from spambots. You need JavaScript enabled to view it. for further information, guidance or assistance.
[1] WW Park, “The Arbitrability Dicta in first Options v Kaplan: What Sort of Kompetenz-Kompetenz Has Crossed the Atlantic?”, Arbitration International, Vol 12 (1996), pp 137, 149.
[2] JJ Barceló, “Who Decides the Arbitrators’ Jurisdiction? Separability and Competence-Competence in Transnational Perspective”, Vanderbilt Journal of Transnational Law, (2003), Vol 36, p 1116.
[3] ibid, p 1118.
[4] ibid.
[5] ibid, p 1124.
[6] E Gaillard & Y Banifatemi, “Chapter 8 - Negative Effect of Competence-Competence: The Rule of Priority in Favour of the Arbitrators”, in Enforcement of Arbitration Agreements and International Arbitral Awards – The New York Convention in Practice, E Gaillard and D Di Pietro, 2008 eds, Cameron May Ltd, p 259.
[7] ibid, p 261.
[8] ibid, p 260.
[9] UNCITRAL Model Law on International Commercial Arbitration 1985, with amendments as adopted in 2006.
[10] Article 8(1): A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.
[11] Fondation M v Banque X, ATF 122 III 139, (1996) 3 ASA Bulletin 527.
[12] Article 16(1): The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
[13] Article 16(3): The arbitral tribunal may rule on a plea referred to in paragraph (2) of this article either as a preliminary question or in an award on the merits. If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within thirty days after having received notice of that ruling, the court specified in article 6 to decide the matter, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.
[14] Article 8(2): Where an action referred to in paragraph (1) of this article has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.
[15] op cit, Barceló, p 1129.
[16] Article 186(1): The arbitral tribunal shall rule on its own jurisdiction.
[17] Article 7: If the parties have concluded an arbitration agreement with respect to an arbitrable dispute, the Swiss court before which the action is brought shall decline its jurisdiction unless:
(a) The defendant proceeded to the merits without contesting jurisdiction;
(b) The court finds that the arbitration agreement is null and void, inoperative or incapable of being performed; or
(c) The arbitral tribunal cannot be constituted for reasons for which the defendant in the arbitration proceeding is manifestly responsible.
[18] op cit, Fondation M.
[19] ibid, p 532.
[20] Article 9(1): If the same parties are engaged in proceedings abroad based on the same causes of action, the Swiss court shall stay the proceeding if it may be expected that the foreign court will, within a reasonable time, render a decision that will be recognizable in Switzerland.
[21] Latin for “pending suit or action”.
[22] Fomento de Construcciones y Contratas SA v Colon Container Terminal SA, 14 May 2001, Swiss Federal Tribunal, 2001(3) ASA Bulletin 555.
[23] op cit, Gaillard & Banifatemi, p 269.
[24] ibid, p 270.
[25] ibid, p 271.
[26] Adopted on 6 October 2006 and entered into force on 1 March 2007.
[27] French Code of Civil Procedure, Article 1466.
[28] Article 1458: If a dispute pending before an arbitral tribunal on the basis of an arbitration agreement is brought before a State court, it shall declare itself incompetent. If the dispute is not yet before an arbitral tribunal, the State court shall also declare itself incompetent, unless the arbitration agreement is manifestly null and void. In neither case may the State court declare itself incompetent at its own motion.
[29] American Bureau of Shipping (ABS) v Copropriete Maritime Jules Verne, Cass Civ 26 June 2001, Rev Arb 529, (2001).
[30] op cit, Gaillard & Banifatemi, p 263.
[31] Section 9(4): On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.
[32] Section 30(1).
[33] Section 31(5).
[34] Section 32(1) and (2).
[35] Premium Nafta Products Ltd v Fili Shipping Co Ltd, [2007] UKHL 40.
[36] ibid, p 37.
[37] Section 72(1): A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question –
- whether there is a valid arbitration agreement,
- whether the tribunal is properly constituted, or
- what matters have been submitted to arbitration in accordance with the arbitration agreement, by proceedings in the court for a declaration or injunction or other appropriate relief.
[38] op cit, Fiona Trust , p 34.
[39] op cit, Barceló, p 1131.
[40] Sub-section 1032(1): A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if the respondent raises an objection prior to the beginning of the oral hearing on the substance of the dispute, reject the action as inadmissible unless the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed.
[41] Sub-section 1032(2): Prior to the constitution of the arbitral tribunal, an application may be made to the court to determine whether or not arbitration is admissible.
[42] op cit, Barceló, p 1131.
[43] Sub-section 1040(1): The arbitral tribunal may rule on its own jurisdiction and in this connection on the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.
[44] Sub-section 1040(2): A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers that the party has justified the delay.
[45] Sub-section 1040(3): If the arbitral tribunal considers that it has jurisdiction, it rules on a plea referred to in subsection 2 of this section in general by means of a preliminary ruling. In this case, any party may request, within one month after having received written notice of that ruling, the court to decide the matter. While such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.
[46] Dell Computer Corp v Union des consommateurs, 13 July 2007, 2007 SCC 34, 2007(3) Rev Arb 56.
[47] ibid, pp 84 – 86.
[48] Prima Paint Corp v Flood & Conklin Mfg Co, 388 US 395 (1967).
[49] First Options of Chicago v Kaplan 514 US 938 (1995).
[50] Howsam v Dean Witter Reynolds Inc 537 US 79 (2002).
[51] op cit, First Options, p 944.
[52] op cit, Howsam, pp 84 – 85. These can include matters such as time-limits, waiver and estoppel.
[53] Buckeye Check Cashing Inc v Cardegna et al, 546 US (2006).
[54] FG de Cossio, “Competence-competence a la Mexicaine et a l’Americane: An Awry Development”, p 4, accessed 19 October 2009, http://www.gdca.com.mx/espanol/publicaciones/arbitraje/PDF/COMPETENCE% 20AMERICETMEX.pdf.
[55] ibid, pp 5 – 6.
[56] L Pereznieto Castro & JA Graham, “Mexican Supreme Court Rejects the Principle of Kompetenz/Kompetenz, 72 Arbitration 4 (2006), p 388.
[57] LDC, SA de CV v ADT Security Services, SA de CV and National Chamber of Commerce of Mexico City, Amparo en revision 3836/2004, 11 November 2004.
[58] Servicio Electronico Digital, SA de CV v ADT Security Services, SA de CV and National Chamber of Commerce of Mexico City, Amparo en revision 31/2005, 31 January 2005.
[59] Contradiction 51/2005, First Chamber of the Supreme Court, 11 January 2006, by majority of 3:2.
[60] op cit, de Cossio, p 3.
[61] Panama also denied the principle of competence-competence, Supreme Court, 13 December 2001, (2002) 2 Revista Latinoamericana de Mediacion y Arbitraje 40, but Legislative Act No 1 of 27 July 2004 re-establishes the principle, op cit, Castro & Graham, p 389.
[62] Section 16(1): The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose:
(a) An arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
(b) A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
[63] Section 45: Power of judicial authority to refer parties to arbitration – Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908) a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.
[64] Shin-Etsu Chemical Co Ltd v Aksh Optifibre Ltd, [2005] 7 SCC 234, XXXI YCA 747 (2006).
[65] op cit, Gaillard & Banifatemi, p 265.
[66] SBP & Co v Patel Engineering [2005] 8 SCC 618.
[67] A Ray & D Sabharwal, “Competence-competence: An Indian Trilogy”, Mealey’s International Arbitration Report, April 2007.
[68] ibid, pp 3 – 4.
[69] Section 34(1): Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
Sub-section (2) lists the grounds for setting aside an award, which must be made within three months from the date of such award, sub-section (3).
[70] op cit, Patel Engineering, para 108.
[71] Agri Gold Exims Ltd v Sri Lakshmi Knits and Wovens, Civil Appeal No 336 of 2007, decided on 23 January 2007.
[72] Arbitration Law 1994.
[73] China International Economic and Trade Arbitration Commission.
[74] J Ju, “A Brief Introduction to the ‘Kompetenz-Kompetenz’ Principle in International Commercial Arbitration”, (2004), accessed 19 October 2009, http://www.duanduan.com/lslt-e-2004-2-10-2.htm.
[75] ibid.
[76] Article 6(1).
[77] Article 6(2).
[78] Article 785: If one of the parties challenges the principle or extent of the arbitrator’s competence to determine the matter submitted to him, the arbitrator may rule on that issue.
[79] Article 8(4): Unless otherwise provided, the arbitrator shall not cease to have jurisdiction by reason of any claim that the contract is null and void or allegation that it is inexistent provided that he upholds the validity of the agreement to arbitrate. He shall continue to have jurisdiction, even though the contract itself may be inexistent or null and void, to determine the respective rights of the parties and to adjudicate upon their claims and pleas.
[80] LCCP, Article 764(2): If the President of the Court of First Instance holds that the arbitration clause is manifestly void or is insufficient to appoint the arbitrator or arbitrators, he will issue a decision to that effect and declare that no arbitrator can be appointed.
[81] Beirut First Instance, decision 18 February 2004, Lebanese Review of Arab and International Arbitration, Vol 29, p 48.
[82] The European Convention on International Commercial Arbitration of 1961, and as of October 2009 has been ratified by 28 parties.
[83] Article VI(3): Where either party to an arbitration agreement has initiated arbitration proceedings before any resort is had to a court, courts of Contracting States subsequently asked to deal with the same subject-matter between the same parties or with the question whether the arbitration agreement was non-existent or null and void or had lapsed, shall stay their ruling on the arbitrator's jurisdiction until the arbitral award is made, unless they have good and substantial reasons to the contrary.
[84] CH Petrus, “Spanish Perspectives on the Doctrines of Kompetenz-Kompetenz and Separability: A Comparative Analysis of Spain’s 1988 Arbitration Act”, American Rev of Int’l Arbitration, Vol 11, (2000), p 402.
[85] E Gaillard & J Savage, “Fouchard Gaillard Goldman on International Commercial Arbitration”, Kluwer Law International (1999), para 660.
[86] op cit, Gaillard & Banifatemi, p 272.
[87] S Walt, “Decision by Division: The Contractarian Structure of Commercial Arbitration”, Rutgers Law Rev, Vol 51, (1999), pp 369, 410.