Jurisdictional Issues in International Commercial Arbitration

Rebecca Huang, LL.B., FCIArb

The kompetenz-kompetenz principle is well-established globally, giving arbitrators the power to determine their own jurisdiction. After a tribunal has been constituted, the responding party may object to the jurisdiction of the tribunal or the admissibility of certain claims. How the tribunal and/or the responding party deals with such objections will have a material impact on the conduct of the hearing.

Bifurcating jurisdictional issues from merits

In the face of a request for bifurcation, the tribunal should examine the arbitration agreement to decide whether it expressly prohibits or restricts bifurcation.

In the absence of an express prohibition, the tribunal then should seek guidance from the applicable arbitration rules. Many arbitration rules allow for bifurcation, such as Article 23.04 of the London Court of International Arbitration (LCIA) Arbitration Rules (October 1, 2020) and Article 23 of the UNCITRAL Arbitration Rules (2021).

If bifurcation is permissible, the tribunal should consider elements that will best serve the parties’ interests, such as:

  1. Is the objection frivolous or serious?
  2. Is the objection closely linked with the merits?
  3. Would the objection, if successful, significantly narrow the issues or result in the dismissal of the claim?1
  4. Would the objection, if unsuccessful, inevitably and significantly delay the merits hearing?2
  5. Would the claimant suffer prejudice that could not be compensated by costs.3

Difference between jurisdiction and admissibility of claims

While there are overlaps between the two issues, they are not the same. The issues of jurisdiction focus on the power of the tribunal, and the issues of admissibility focus on the claims.

The assessment of a tribunal’s jurisdiction depends on fundamental factors such as the validity of the arbitration agreement and the composition of the tribunal.

The admissibility of the claims examines the claim and asks whether it could be heard by a tribunal4 that has been properly constituted pursuant to a valid arbitration agreement. For example, under Singapore law, issues of time bar arising from the statutory limitation periods go towards admissibility of the claim, not jurisdiction of the tribunal. As another example, if an arbitration agreement contains a condition precedent before arbitration can be invoked, the tribunal may be asked to determine whether the condition precedent has been satisfied such that the claim can be heard.5

There are other differences between the issues of jurisdiction and admissibility, such as:

  • A lack of jurisdiction means that the tribunal cannot hear the claim, while a lack of admissibility means that the claim is not fit for arbitration;
  • While a tribunal’s decision of no jurisdiction is usually subject to review by another body, it is not usually the case for a tribunal’s decision on inadmissibility; and
  • When a tribunal refuses jurisdiction over a claim, the parties cannot resubmit the same claim to the same tribunal. However, if a tribunal determines that a claim is inadmissible, the claimant may resubmit to the same tribunal if the flaw causing the inadmissibility is cured.6

Challenge of a partial award on jurisdiction before national courts

Challenges to an arbitral award of jurisdiction “are usually addressed to the courts at the seat of arbitration.”7 As reflected in Article 16 of the Model Law, timeliness is the key factor. Delay or silence is deemed a waiver of right to challenge the tribunal’s jurisdiction.

A party must raise jurisdictional objections with the tribunal once they are aware of the grounds for the objections. Under Article 73 of the UK Arbitration Act, a party may not raise a jurisdictional objection before the court if the party takes part, or continues to take part, in the arbitral proceeding without raising such objections with the tribunal, unless they did not know and could not with reasonable diligence have discovered the grounds for the objection. In a recent English court decision,8 the commercial court rejected Radisson Hotels’ court challenge of an award on jurisdiction because it failed to act “promptly”. The hotel was deemed to have waived its right to object because it continued to participate in the arbitration proceeding notwithstanding its knowledge of the grounds for objection.

A party must act also promptly with the national court at the seat of arbitration after receiving the partial award on jurisdiction. Under Article 21 of the Singapore Arbitration Act 2001, the arbitral tribunal may rule on a jurisdictional challenge either as a preliminary question or in an award on the merits. After receiving notice of the ruling, any party may, within 30 days, apply to the Court to decide the matter. A late challenge may be rejected by the court.

Where a jurisdictional ruling is included in the partial award that deals with the merits of the claim, in non-ICSID cases, a party may challenge it in the national court where the claimant seeks recognition and enforcement.

In conclusion, the kompetenz-kompetenz principle allows arbitrators to determine their own jurisdiction. When a tribunal’s jurisdiction is challenged, arbitrators must assess whether bifurcation is appropriate, carefully weigh objections, considering their seriousness and impact on proceedings and be aware of the nuanced distinction between jurisdiction and admissibility of claims. Moving parties should also be aware that timely challenges are essential. Delays or participation in proceedings without objection may result in waiver of the right to challenge.

1. David D Caron and Lee M Caplan, The UNCITRAL Arbitration Rules: A Commentary, 2d Ed, at 457.

2. Emmis International Holding, B.V. et al. v. Hungary, Decision on Jurisdiction and Admissibility, ICSID Case No. ARB/12/2, paragraph 48.

3. ibid, paragraph 56.

4. BBA and others v. BAZ and another appeal, [2020] SGCA 53, paragraph 64.

5. This point was also discussed in Article 3 of International Arbitration Practice Guideline – Jurisdictional Challenges, Chartered Institute of Arbitrators.

6. Abaclat and others v Argentine Republic, Decision on Jurisdiction and Admissibility, ICSID Case No ARB/07/5, paragraph 247.

7. Nigel Blackaby KC, Constantine Partasides KC and Alan Redfern, Redfern and Hunter on International Arbitration (7th edn, Oxford University Press) 320.

8. Radisson Hotels APS Denmark v Hayat Otel Işletmeciliği Turizm Yatırım Ve Ticaret Anonim Şirketi [2023] EWHC 892 (Comm).