According to German legal terminology, ""Kompetenz-Kompetenz" would imply that the arbitrators are empowered to make a final ruling as to their jurisdiction, with no subsequent review of the decision by any court".3 It has therefore been suggested that the use of the expression "Kompetenz-Kompetenz" (instead of Competence-Competence) in the context of investment arbitration is ambiguous and should probably be avoided.4
II. The positive effect of Competence-Competence
According to the Competence-Competence doctrine, an arbitral tribunal has jurisdiction to consider and decide any disputes regarding its own jurisdiction, subject to, in certain circumstances, subsequent judicial review. In the context of investor-State disputes, by way of example, an arbitral tribunal's authority to rule on its own jurisdiction may be subject to the review of national courts with respect to ad hoc arbitrations; or the review of an ad hoc comity with respect to ICSID arbitrations.6
In the context of investor-State disputes, the competence-competence principle extends to an arbitral tribunal's determination of its:
This "positive" definition is widely accepted and applied in international commercial arbitrations12 as well as in the context of State-to-State13 and investor-State disputes, through express incorporation in major arbitration rules.14 Notably, the ICSID Secretariat performs an extensive review of Requests for Arbitration to confirm the existence of a prima facie jurisdictional basis before an arbitration may proceed under the ICSID Rules.15 It is also reflected in investment arbitration tribunals jurisprudence.16
Award in Case of the Betsey of 13 April 1797 (Lord Chancellor Loughborough), cited in Moore, J., History and Digest of the International Arbitrations to Which the United States Has Been A Party, Washington, Gov't Print Off., 1898, p. 327; Convention for the Pacific Settlement of International Disputes (1907), 18 October 1907, entered into force on 26 January 1910, Art. 73; International Law Commission, Model Rules on Arbitral Procedure, 1958, Arts. 1(3) and 9; UN Secretariat, Memorandum on Arbitral Procedure, U.N. Doc. A/CN.4/35, Yearbook of the International Law Commission, 1950, Vol. II, p. 165.
Convention on the settlement of investment disputes between states and nationals of other states, 18 March 1965, entered into force on 14 October 1966, Art. 41; ICSID Arbitration (Additional Facility) Rules, 2006, Art. 45.1; UNCITRAL Arbitration Rules (as revised in 2010), Art. 23.1; ICC Rules, 2017, Art. 6.3.
Landesbank Baden-Württemberg, HSH Nordbank AG, Landesbank Hessen-Thüringen Girozentrale and Norddeutsche Landesbank-Girozentrale v. Kingdom of Spain, ICSID Case No. ARB/15/45, Decision on the "Intra-EU" Jurisdictional Objection, 25 February 2019, paras. 90-92; Mohamed Abdulmohsen Al-Kharafi & Sons Co. v. Libya and others, Final Arbitral Award, 22 March 2013, pp. 237-239; Austrian Airlines v. The Slovak Republic, Final Award, 9 October 2009, para. 117; Quasar de Valores SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. and ALOS 34 S.L. v. The Russian Federation, SCC Case No. 24/2007, Award on Preliminary Objections, 20 March 2009, para. 80; Romak S.A. v. The Republic of Uzbekistan, PCA Case No. 2007-07/AA280, Award, 26 November 2009, para. 165.
III. The negative effect of Competence-Competence
The extent to which national courts may have the authority to rule on an arbitral tribunal's jurisdiction is determined by (i) the relevant provisions in domestic law, often incorporating the New York Convention 1958, and (ii) their construction by case-law.
In particular, Article II(3) of the New York Convention has been implemented by several States in their legislation.20 The wording of Article II(3) of the New York Convention could be construed either as granting a great interpretative power to States' courts (see e.g., German courts' interpretation),21 or as providing domestic courts the authority to exercise a prima facie review only (see e.g., Swiss courts' interpretation).22
Judgment of 13 January 2009, XI ZR 66/08 (German Bundesgerichtshof); Judgment of 31 May 2007, III ZR 22/06 (German Bundesgerichtshof); Judgment of 1 March 2007, III ZR 164/06 (German Bundesgerichtshof); Judgment of 25 January 2007, VII ZR 105/06 (German Bundesgerichtshof); Judgment of 12 January 2006, III ZR 214/05 (German Bundesgerichtshof); Judgment of 19 July 2004, II ZR 65/03 (German Bundesgerichtshof); Judgment of 4 October 2001, III ZR 281/00 (German Bundesgerichtshof); Judgment of 14 September 2000, III ZR 33/00 (German Bundesgerichtshof); Judgment of 7 October 2002, 2003 NJW-RR 354 (Bayerisches Oberstes Landesgericht).
Judgment of 6 August 2012, DFT 4A_119/2012, Swiss Federal Tribunal, para. 3.2; Judgment of 29 April 1996, Found. M v. Banque X, 14 ASA Bull. 527 (Swiss Federal Tribunal) (1996); Judgment of 16 January 1995, Compagnie de Navigation et Transps. SA v. Mediterranean Shipping Co., XXI Y.B. Comm. Arb. 690, 696 (Swiss Federal Tribunal) (1996).
Born, G.B., Chapter 7: International Arbitration Agreements and Competence-Competence, in International Commercial Arbitration, Kluwer Law International, 2005, pp. 1046-1252.
Boucaron-Nardetto, M., La compétence-compétence : le point de vue français. Plaidoyer pour la compétence à la française, Cahiers de l'arbitrage, n° 1, 2013, p. 37.
Douglas, Z., International Law of Investment Claims, Cambridge University Press, 2009, p. 616.
Gaillard, E., L'effet négatif de la compétence-compétence, in Haldy, J., Rapp, J.M. and Ferrari, P. (eds.), Etudes de procédure et d'arbitrage en l'honneur de Jean-François Poudret, Faculté de droit de l'Université de Lausanne, 1999, pp. 387-402.
Gaillard, E. and Savage, J. (eds.), Gaillard Fouchard Goldman on International Commercial Arbitration, Kluwer Law International, 1999, p. 1320.
Loquin, E., Fasc. 1034 : ARBITRAGE – Compétence arbitrale – Conflit entre la compétence arbitrale et la compétence judiciaire, JCl Procédure civile, LexisNexis, 2018.
Moreau, B., Glucksmann, E., Feng, P., Arbitrage international, Répertoire de droit commercial, Dalloz, 2016, paras. 56-62.
Park, W.W., The Arbitrator's Jurisdiction to Determine Jurisdiction, in Van Den Berg, J.A. (ed.), International Arbitration 2006: Back to Basics?, ICCA Congress Series, Vol. 13, ICCA & Kluwer Law International, 2007, pp. 55-153.
Paulsson, J., Denial of Justice in International Law, Cambridge University Press, 2005, pp. 150-153.
Seraglini, C. and Ortscheidt, J., Droit de l'arbitrage interne et international, LGDJ, 2nd ed., 2019, p. 1052.