Author

Ms Saadia Bhatty

Counsel in International Dispute Resolution - Gide Loyrette Nouel LLP

Editors
See all

Competence-competence

I. Origin

1.

The Competence-Competence doctrine has been referred by investment tribunals as "Kompetenz-Kompetenz"1 (referring to its German origins), or the principle of "compétence de la compétence".2

2.

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

3.

The Competence-Competence doctrine can be defined both (1) positively, with respect to the powers granted to arbitral tribunals and (2) negatively, with respect to those of national courts.5

II. The positive effect of Competence-Competence

4.

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

5.

The principle is rooted in the arbitration agreement itself.7 In application of the separability doctrine, the arbitral tribunal's authority to decide on its own jurisdiction therefore exists irrespective of whether the legal instrument containing the arbitration agreement has been terminated. 

6.

In the context of investor-State disputes, the competence-competence principle extends to an arbitral tribunal's determination of its:

  1. jurisdiction ratione materiae: When considering their jurisdiction ratione materiae, investment tribunals have opted for a prima facie analysis;8
  2. ratione personae: The determination of whether the parties meet the nationality requirements set forth in the applicable investment treaty;9
  3. ratione temporis: The determination of the scope of their own jurisdiction over the facts of the dispute, considering the time when the investment treaty has entered into force;10 and
  4. ratione voluntatis: It is up to the arbitral tribunal to decide whether both parties to an investment dispute have consented in writing to settle their dispute through an Investor-State Dispute Settlement (ISDS) mechanism.11

7.

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

III. The negative effect of Competence-Competence

8.

It has been considered that the negative corollary of the competence-competence principle is that national courts do not have jurisdiction over disputes relating to the jurisdiction of an arbitral tribunal, unless the underlying arbitration agreement is prima facie null and void.17

9.

It has been suggested that considering otherwise would allow parallel proceedings before an arbitration tribunal and domestic courts, thereby opening the door to dilatory jurisdictional objections.18

10.

A majority of jurisdictions, however, do enable the parties to an arbitration agreement, in certain circumstances, to raise a jurisdictional objection before States' courts.19

11.

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.

12.

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

13.

Anti-suit injunctions, when permitted by legislation, are a key remedy for parties who seek to protect an arbitral tribunal's jurisdiction from state interference at the jurisdictional stage, thereby aiding towards the enforcement of the competence-competence.23

14.

Conversely, anti-arbitration injunctions issued from state courts have been used by a Respondent party as a tool to block arbitration proceedings.24 

15.

As a basis to oppose such injunctions, arbitral tribunals often refer to the competence-competence principle and have found that such an attempt to circumvent arbitral proceedings amounted to a denial of justice.25

Bibliography

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., Aspects philosophiques du droit de l'arbitrage international, Martinus Nijhoff, 2008, paras. 72-81.

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.

Select a key word :
1 /