The arbitrator’s jurisdiction is based on the will of the parties, whether expressed in a contract in general terms covering a future dispute or in a separate agreement covering an existing dispute. The authority to hear the parties and make an award exists only through the agreement of the parties. It stems from a voluntary act.
The issue that we will address can briefly be described as follows: Situations arise where jurisdiction is challenged, despite the parties’ original will to grant an arbitrator authority to decide the dispute or based on an alleged lack thereof. Typically, the respondent objects to jurisdiction at the outset, i.e. as soon as the claimant has requested arbitration, or as soon as an arbitrator has been appointed. Sometimes this is done in bad faith with the only purpose to delay the arbitration or to avoid it. A party who has lost an arbitration sometimes challenges the arbitrator’s jurisdiction in setting aside proceedings in order to prevent the award from taking effect. A challenge of jurisdiction is sometimes the last, desperate action by a party who senses that the end is near.
Practice shows that there are many possible objections to arbitral jurisdiction. The most straightforward one is that the parties never entered into an arbitration agreement. One frequent objection is that the arbitration clause is pathological, e.g., it refers to a non-existing arbitral institution such as the “International Chamber of Commerce of Geneva,”1 or the “Association Internationale d’Arbitrage.”