The doctrine of Competence-Competence
Investment has referred to the Competence-Competence as “Kompetenz-Kompetenz (referring to its German origins), or the principle of "compétence de la compétence".
"Kompetenz-Kompetenz" would suggest that the arbitrators are empowered to issue a definitive judgment on their jurisdiction, with no further review by any court," according to German legal language. As a result, it has been proposed that in the context of investment arbitration, the phrase "Kompetenz-Kompetenz" (rather than Competence-Competence) is confusing and should probably be avoided.
The Competence-Competence theory can be defined in two ways: (1) favourably, in terms of arbitral tribunal powers, and (2) negatively, in terms of national court powers.
The petitioner in Kvaerner Cementation India Ltd. v Bajranglal Agarwal had filed a civil court complaint seeking a declaration that there was no arbitration clause between the parties and that the existing arbitration procedures were without jurisdiction. Interim relief had been granted by a civil court, but it was later revoked. The Bombay High Court's Single Judge refused to interfere with the civil court's order vacating the interim order because the Tribunal has the authority to rule on its jurisdiction under Section 5 read with Section 16 of the Arbitration and Conciliation Act, 1996 ("1996 Act"). The civil court cannot issue an injunction against arbitral proceedings. The court determined that Section 16 made it clear that the matter of the arbitration agreement's legality may be brought before the Arbitral Tribunal, whose judgment might be appealed under Section 34 by a party dissatisfied by the Arbitral Tribunal's decision. As a result, the petitioner was free to raise the issue before the Arbitral Tribunal and the Arbitral Tribunal itself.
The significance of the competence-competence doctrine
The notion of competence-competence is found in Section 16 of the 1996 Act. The significance of Section 16 in the framework of the 1996 Act is vital because it reflects the trust placed in the Arbitral Tribunal's authority. The legislature, through Section 16, has established a great deal of faith and reliance in the Arbitral Tribunal's capacity to do justice, even though their rulings may affect their existence.
The competence-competence concept attempts to increase arbitration's autonomy by restricting the state judge's interference and, above all, by making the arbitrator a judge in his own right. Based on this finding, the competence-competence concept may be considered the cornerstone of arbitration and a probable concept with complete acceptance.
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