What is the negative effect of kompetenz-kompetenz in Arbitration? Arbitration Q&A guide simplified by Hesham Elrafei FCIArb

 What is the negative effect of kompetenz-kompetenz in Arbitration?

By Hesham Elrafei FCIarb 

While a court is making a decision on whether the arbitration agreement is ‘null and void,’ ‘inoperative’ or ‘incapable of being performed,’ Article 8 of the UNCITRAL Model Law stated that:

“Arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.”

kompetenz-kompetenz suggests that the parties would lose their rights to have the jurisdictional dispute determined by a court. This is often referred to as the ‘negative effect’ of the kompetenz-kompetenz principle. 

kompetenz-kompetenz also means that the tribunal gets the 1ST chance to decide the jurisdictional issue, eg. whether the arbitration agreement is valid in order to form the basis of the tribunal’s jurisdiction.  However, the final say lies with the court, which can review the tribunal’s decision on jurisdiction. 

If the tribunal rules as a preliminary question that it has jurisdiction, under Article 16 of the UNCITRAL Model Law, any party may then challenge this ruling before the court (eg Court of the seat of the arbitration)

During the challenge, the arbitration proceedings can nevertheless continue, even to the issuance of a Final Award.

Arbitration Q&A guide simplified by Hesham Elrafei FCIArb

Arbitri 2022