Originially from: World Arbitration and Mediation Review (WAMR) 2004 Vol. 15, No. 12

JAMS Column On Arbitration
Kompetenz-Kompetenz—From Prima Paint and Kaplan to Howsam and Bazzle: Should
International Arbitrators Decide Their own Authority to Rule?
By Robert B. Davidson, Esq.
Executive Director of JAMS Arbitration Practice
[The article is based upon a paper Mr. Davidson delivered at the Swedish Arbitration Institute on
October 7, 2004.]
I.
One of the hallmarks of international arbitration is the arbitrators’ power to decide upon
their own jurisdiction. If the process is to be viable, many defenses directly challenging, or
dependent upon, continuing arbitral jurisdiction must, as a practical matter, be presented to the
arbitrators for determination. The classic example is a party who raises a defense alleging that it
was fraudulently induced to enter into a contract containing an arbitration clause. If the claim of
fraudulent inducement is upheld, the contract falls like a house of cards and, together with it, the
arbitration clause that it contains. If, however, that defense must be litigated initially by a
national court, much of the value of international arbitration (or domestic arbitration for that
matter)—relative speed, a final disposition of the dispute on its merits, and an avoidance of
national courts that might favor the home party—would be lost.1
To avoid this result, the rules of virtually all international arbitral organizations provide
that arbitrators are empowered to decide their own jurisdiction and, in doing so, are further
empowered to rule on whether the underlying agreement containing an arbitration clause is valid
or void. Many institutional rules provide expressly that the arbitrators shall have the power to
determine the existence or validity of the underlying contract containing the arbitration clause
and further provide that an arbitration award that holds the underlying contract to be void shall
not ipso facto divest the tribunal of jurisdiction.2 Thus, an attack on the overall agreement (on
the basis, for example, of fraudulent inducement) will not affect the validity of the arbitration
clause which is deemed to be severable from the underlying contract. If the parties signed on for
arbitration, that is what they will get, and they can present their attacks on the overall agreement
to the arbitrators for determination.
This construct of the severability of the arbitration clause from the overall agreement—
and the consequent result that the arbitrators are empowered to determine their own
jurisdiction—is recognized and enforced by most national legal systems, and the United States is
no exception. The U.S. acceptance of the severability doctrine was accomplished in the seminal