HIGHLIGHTS

The Competence-Competence Principle in Arbitration: Jurisdictional Dynamics and Global Perspectives

The national court at the place of the arbitration may claim jurisdiction over the case, which might have an impact on the proceedings. The tribunal may ascertain its jurisdiction in cases when one party contests it, according to the competence-competence principle, which is a fundamental component of this concept. This keeps the court from interfering too soon and guarantees that the arbitrator's lack of authority won't impede the arbitration process. Competence-competence has both good and bad impacts. The positive consequence establishes a framework of concurrent jurisdiction between courts and arbitral tribunals by enabling arbitral tribunals to rule on matters within their purview. Nevertheless, the adverse consequence limits the court's ability to provide the tribunal with initial authority to ascertain its jurisdiction and the legitimacy of the arbitration agreement. This limits the court's power to consider the merits of the case while determining whether the arbitration agreement was legitimate when it was signed off on by the arbitral panel.

The aim of the parties to provide the arbitrators the power to decide every aspect of their dispute, including jurisdictional issues, is the basis for competence-competence. Although they cannot replace the tribunal's decision, courts are nevertheless able to oversee it. If a court judgment is pending on the same issue, the arbitral tribunal must be given priority, and the court should hold off on interfering until the tribunal renders a jurisdictional decision to fully implement the negative impact. To assess whether a tribunal has the right to convene and make a decision about the merits of a dispute, this must be taken into consideration together with the suspension of legal proceedings.

Variations in Competence-Competence Application

The competence-competence idea is not always applicable and can take several forms. In the US, courts have the authority to step in and determine whether an arbitration agreement is legal before the award is made. Comparatively, jurisdictional matters are postponed until the final award in France. Each strategy has benefits and drawbacks. Bringing up jurisdictional difficulties at the outset of the arbitration process might impede its promptness and be interpreted as a strategy for postponement. Combining the American and French methods, the English Arbitration Act of 1996 permits the court to resolve a preliminary question of jurisdiction only with the consent of all parties involved or if the tribunal authorizes it. In both situations, the arbitral procedures may be continued by the tribunal while the court application is being processed. The English method provides a middle ground between averting costly disruptions of the arbitral procedures and avoiding arbitration proceedings in cases where the tribunal is not competent. Nonetheless, courts' application and methodology frequently depart from the original goals of the lawmaker. By contrast, despite the Federal Arbitration Act permitting judicial involvement before the rendering of an award, several U.S. courts have taken a cautious stance.

The US Supreme Court recognized the parties' entitlement to provide arbitrators with the last word on matters of arbitral authority in First Options of Chicago v. Kaplans. The Kaplans disputed that their dispute with First Options could be arbitrated since they had not personally signed the arbitration agreement. The Supreme Court maintained that the Kaplans were not bound by the arbitration agreement, but it also recommended that the court grant the arbitrator a great deal of discretion and only overturn their ruling in very specific situations. In China, the competence-competence theory is not recognized by the People's Republic of China Arbitration Law. The People's Court or the China International Economic and Trade Arbitration Commission (CIETAC) will decide the arbitration agreement's legitimacy, which would establish the tribunal's jurisdiction. The tribunal has no voice in the matter, and if a party brings up the question of the tribunal's jurisdiction with CIETAC and another with the People's Court, there may be inconsistent rulings.

Model Law Without Citrality In international commercial arbitration, jurisdictional concerns are addressed under Article 16(1) of the UNCITRAL Model Law, which gives the arbitral tribunal the authority to rule on its jurisdiction. Nonetheless, the courts' control over jurisdictional matters is maintained, subject to two restrictions: the decision made by the court on jurisdiction is not susceptible to appeal, and the arbitral tribunal's preliminary ruling is not stopped by the court's assessment of the case. The solution to the question of who decides an arbitral tribunal's jurisdiction in Nigeria is found in the Arbitration and Conciliation Act LFN 2004. According to Section 12(1) of the ACA, an arbitral tribunal has the authority to make decisions about matters falling under its purview as well as disputes relating to the presence or legality of arbitration agreements. On appeal to the high court, the appellant in NNPC v. KLIFCO brought up the issue of challenge to the arbitral tribunal's jurisdiction for the first time. The Nigerian Supreme Court construed this clause and the stance on jurisdiction in arbitral proceedings to mean that the arbitral panel has the authority to hear and decide a dispute that is brought before it. If there was no submission to jurisdiction, the High Court may consider an appeal on the question of jurisdiction. The tribunal is entitled to rule on its jurisdiction as a preliminary question or an award on its merits, and the proper forum and time to contest the tribunal's jurisdiction are before the tribunal. The unsatisfied party may appeal this decision to the High Court, but it is not permitted to bring up the jurisdictional question for the first time there. The arbitrator's jurisdictional award is the only thing the court can evaluate during the annulment or enforcement phase.