Originally from: Stockholm International Arbitration Review

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DENIAL OF JURISDICTION: FORM, CONSEQUENCES AND REVIEW UNDER THE MODEL LAW, NATIONAL ARBITRATION LAWS AND CASE LAW

Polina Permyakova

It is well established that an arbitral tribunal may rule on objections to its jurisdiction. This power of the tribunal is commonly referred to as the principle of competence-competence. However, despite the wide recognition of the competence-competence principle, its implications in cases where the tribunal denies jurisdiction have not been generally acknowledged. Recent developments in case law, as well as some provisions in national arbitration laws, point to the fact that great uncertainty exists with regard to the negative decisions on jurisdiction. While most national arbitration laws regulate the assumption of jurisdiction by an arbitral tribunal and its consequences, they remain silent on the question of what is to happen if the tribunal decides that it does not have jurisdiction. This creates practical difficulties, inter alia, in defining the form of negative decisions on jurisdiction, exercise of court control over them, establishing the merits of the challenge procedure, and an arbitral tribunal’s power to decide on the costs of arbitration. This article will examine these issues.

1. Form of the Negative Decisions on Jurisdiction

The UNCITRAL Model Law on International Commercial Arbitration (Model Law) and most national arbitration laws do not define the legal form of a negative decision on jurisdiction by an arbitral tribunal. Pursuant to Article 16 (3) of the Model Law the arbitral tribunal may rule on a challenge to its jurisdiction either as a preliminary question or in an award on the merits. If the arbitral tribunal assumes jurisdiction, such decision shall take place through a preliminary ruling or may be contained in an arbitration award on the merits. The Model Law does not address situations where jurisdiction is denied.1 The characterization of a negative decision on jurisdiction as an arbitration award or a ruling appears unclear. The same problem arises under the majority of domestic arbitration laws both in Model Law and non-Model Law countries. Only a few national arbitration laws refer to negative decisions on jurisdiction.