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Kompetenz- Kompetenz Principle

Kompetenz- Kompetenz Principle in Arbitration


The concept of kompetenz- kompetenz or competence- competence is among the most significant concepts whereby a legal body such as courts or arbitral tribunal may have competence or jurisdiction to rule as to the extent of its competence on an issue before it. The concept arose in Federal Constitutional Court of Germany. This principle provides full autonomy to the tribunal with least interference of the courts in the arbitral proceedings. In the absence of this principle the arbitrator would not be able to rule on their own jurisdiction.

 Section 16 of the UNCITRAL Model Law and Arbitration and Conciliation Act, 1996 recognizes the inclusion of the jurisprudential doctrine in the Arbitration process. Clause 1 of section 16 of the Arbitration and Conciliation Act, 1996 states that “the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement.” The arbitral tribunals have power to consider and determine its disputes concerning its own jurisdiction. The underlying object of this doctrine is to minimize judicial interventions in the arbitral process. The principle requires that the arbitral tribunal must exercise jurisdiction over the dispute under the arbitration agreement. There are two aspects of Kompetenz- kompetenz principle: first is related to the ability of arbitrator to decide on its own jurisdiction and second is related to the fact that national courts can rule on arbitral tribunal’s jurisdiction only after the arbitrators has done so. Even if the parties move the application to the national court concerning the jurisdiction without submitting it to the arbitral tribunal then the court will not decide on the issue before the decision or award of the tribunal.

In Duro Felguera S.A. v. Gangavaram Port Ltd., the supreme court upheld that the issue of jurisdiction must therefore be left entirely for determination by the arbitral tribunal. However, the doctrine is not absolute and have some exceptions which was given in Chloro Controls (I) P. Ltd. V. Severn Trent Water Purification Inc, it was stated that the principle requires that the arbitral tribunal must exercise jurisdiction over the dispute under the arbitration agreement. Challenge to the existence or validity of the arbitration agreement will not prevent the arbitral tribunal from proceeding with hearing and ruling upon jurisdiction, making an award or the substance of the dispute would be permissible without waiting for the outcome of any court action aimed at deciding the issue of the jurisdiction. The negative effect of the Kompetenz principle is that the arbitrators is entitled to be the first to determine their jurisdiction which is later reviewable by the court, when there is action to enforce or set aside the arbitral award. Where the dispute is not before an arbitral tribunal, the court must also decline jurisdiction unless the arbitration agreement is patently void, inoperative or incapable of being performed.

Hence, the doctrine is no doubt of utmost significance to set the arbitral tribunals free so that they can rule freely on their own jurisdiction. This will not only bring ease to the arbitration process but will increase the confidence of the parties towards the mechanism for resolving disputes. However, the doctrine cannot be absolute power given to the arbitrators when the very initiation of the arbitration that is the arbitration agreement is void ab initio.

  • Competence Competence principle arbitration
  • power of arbitrators
  • rule on its own jurisdiction

BY : Rakhi

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