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1Mar/10Off

Do challenge the jurisdiction of the tribunal!

Arbitrators usually are sensitive to arguments about their jurisdiction. Though under the competence-competence doctrine even issues of the existence and validity of the arbitration agreement may go initially to the arbitrators, the authority of an arbitrator arises from a contract between the parties.

If you have sufficient arguments against the jurisdiction of a tribunal present them immediately. Do not be afraid to antagonize the arbitrators. It is much better to resolve the issues of jurisdiction at the beginning of the process, than to face the restrictions on challenging an arbitrator's award on substantive jurisdiction after it is issued.

3975832602 fc7060edb3 Do challenge the jurisdiction of the tribunal!

As follows from arbitrations laws in many countries, especially those designed on the basis of the UNCITRAL Model Law, it is prescribed that the arbitrator, and not the court, to decide whether the arbitrator has substantive jurisdiction or not. Ukraine is not an exception here. Normally, certain restrictions are imposed upon a party's right to challenge the arbitrator's substantive jurisdiction.

There is a distinction between an objection as to substantive jurisdiction which is raised at the start of proceedings and an objection raised during proceedings:

a) Objection at the Start

Pursuant to the Law of Ukraine “On International Commercial Arbitration” the tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso iure the invalidity of the arbitration clause.

A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defense. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. Therefore, although a party may have appointed or participated in the appointment of an arbitrator, he can still allege that, for example, the appointment was flawed because the dispute lies outside the terms of the arbitration agreement.

A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.

The arbitral tribunal may rule on a plea mentioned above either as a preliminary question or in an award on the merits. If the tribunal rules as a preliminary question that it has jurisdiction, any party may request within 30 days after having received notice of that ruling, the court to decide the matter; such a decision shall be subject to no appeal. While such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.

b) Objection During the Proceedings

We already mentioned that a plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.

Therefore, if a claimant amends his statement of case and the respondent objects that the amendment falls outside the terms of the arbitration agreement, the objection must be made 'as soon as possible' with both the arbitrator and the other parties being informed of the objection. Note that this provision is treated as a mandatory and thus cannot be varied by the parties.

These jurisdictional rules therefore specify a timeframe over which an objection on jurisdictional grounds can be made, and one may draw the conclusion that there will be instances where parties lose their right to object. The Law of Ukraine “On International Commercial Arbitration” stipulates that a party who knows that any provision of that Law from which the parties may derogate or any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without slating his objection to such non-compliance without undue delay or, if a time-limit is provided therefore, within such period of time, shall be deemed to have waived his right to object. This is the general case, but there is a provision which allows the arbitrator to admit an objection later than the time specified. This provides a degree of flexibility on the arbitrator's part to perform his duty of managing the arbitral process by admitting a later objection if he deems the delay to be justified.

(c) by International arbitration blog

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