Arbitral Jurisdiction Research Articles

International Arbitration in China: 2023 in Review

2023 was a year of progress for international arbitration in China, as there was positive activity in the Ministry of Justice, in the Courts, and in the arbitral institutes, each paving the way toward making China a more favourable venue for international arbitration. There were also encouraging developments abroad as several foreign court decisions recognized awards issued in China under the rules of Chinese arbitration institutions, demonstrating increasing global acceptance of awards issued in China by Chinese institutions, such as the China International Economic & Trade Arbitration Commission.With major amendments proposed to modernize its arbitration law, updates of key arbitral institute rules to be aligned with international practices, and judicial and policy measures in aid of arbitration, China has taken concrete steps to strengthen itself as a more modern international arbitration jurisdiction.

Harmonizing Ouster Clauses and Pre-action Protocols in Nigerian Construction Disputes

This paper discusses how ouster clauses and pre-action protocols intersect when it comes to resolving construction disputes within the Nigerian context. Concerning dispelling ambiguity and providing sureness, ouster clauses point out ways of dispute resolution mechanisms. On the other hand, early resolution and cost saving can be encouraged through dialogue or cooperation before formal litigation thereby being said as the role of pre-action protocols in promoting such response before justice is sought. It is important to understand how these factors interrelate so that we can manage construction disputes effectively. While ouster clauses might influence when pre-action protocols are applied, they may also determine how parties understand and observe such provisions. Nigeria’s legal system as far as construction disputes are concerned, should be managed to maintain a harmonious balance between the two mechanisms. The interdependencies of the entities involved in this process are explored here and the aim is to provide information that could be useful for those practicing law or those responsible for making decisions in other areas The effectiveness of ouster clauses and pre-action protocols in construction disputes is assessed based on factors like resolution speed with a weighted mean of 2.53, legal enforcement (2.49), compliance rate (2.35), cost reduction (2.21). Ouster clauses limit the jurisdiction of courts or arbitrators by 34%, leading to prolonged litigation or arbitration (23%). Pre-action protocols impose procedural requirements (18%), causing delays and increased costs (16%). To improve the effectiveness of ouster clauses and pre-action protocols in construction disputes, it is crucial to enhance clarity, promote alternative dispute resolution, facilitate early engagement, strengthen enforcement mechanisms, and engage stakeholders. Keywords: Construction disputes, Litigation, Ouster clauses, Pre-action protocols, Resolution.

Awarding costs where no arbitral jurisdiction on the merits: the making and enforcement of negative cost awards

Abstract Arbitral tribunals routinely award costs when they lack jurisdiction on the merits of a dispute. However, most of the identified awards—labelled here as ‘negative cost awards’—fail to adequately explain the source of the tribunals’ authority to award costs, either by omitting the reasoning altogether or by merely relying on the arbitration rules. If the arbitration agreement is found to be invalid or non-existent, it cannot empower a tribunal to award costs, and the arbitration rules ordinarily should not apply if the parties never agreed to them in a valid arbitration agreement. This notwithstanding, tribunals usually have a valid basis to award costs. This authority can be found in the arbitration agreement on the issue of costs, the competence–competence principle or, one way or another, national arbitration laws. Negative cost awards generally should be enforceable both under the New York Convention and the ICSID Convention, but the lack of an express finding of the arbitration agreement or another source of the tribunals’ authority to award costs may jeopardize the enforceability of such awards. Tribunals can avoid this problem by expressly explaining the basis of their authority to adjudicate costs in their awards.

Calibrating De Novo: Judicial Review of Arbitral Jurisdiction

De novo review of arbitral jurisdiction at the post-award stage that typically involves full, independent assessment of arbitrators’ findings with respect to questions of law and fact has become the norm under most legal regimes. This approach is geared towards legitimacy of the arbitral process and ensures that a party contesting jurisdiction has full opportunity to do so before the courts. However, while seeking to preserve important public policy objectives, de novo review may sometimes lead to inefficiencies and unfairness in the process, contrary to arbitration’s stated goals of obtaining the fair resolution of disputes without unnecessary delay or expense. This article thus calls for a critical evaluation of the de novo standard with a view to developing a more balanced system that would pay due regard to the competing goals of efficiency and legitimacy of the arbitral process. arbitral jurisdiction, jurisdiction of arbitrators, control of jurisdiction, review of jurisdiction, standard of review, de novo review, full review, rehearing of jurisdiction, deference to arbitrators, jurisdiction and admissibility

The Validity of Arbitration Agreements Providing for Arbitration in Mainland China Administered by Overseas Arbitration Institutions

With China increasingly opening up in relation to trade, the number of overseas arbitration institutions practicing in China’s free trade zones is expected to rise. At the same time, however, the validity of arbitration agreements remains uncertain under Chinese arbitration law, with arbitration clauses which tend to permit administration only by domestic arbitration commissions. Chinese arbitration legislation and recent cases demonstrate that this issue can be attributed to difficulties identifying a designated arbitration commission or tribunal, as well as unclear standards to determine the nationality of the arbitration award. Considering relevant decisions of Chinese courts over the past twenty years, this article concludes that the attitude of the Chinese judiciary towards arbitration by overseas arbitration institutions in China has shifted from conservative to more open. However, a number of issues, including confusion around the arbitration jurisdiction (caused by absence of a requirement to specify the arbitration institution) make this area a difficult one for practitioners. overseas arbitration institutions, the validity of arbitration agreement, free trade zone, the seat of arbitration, the New York Convention

Study on the Expansion of ICSID Arbitration Jurisdiction

With the development of the global economy, international investment gradually occupies an important position in the market, and at the same time it also brings some legal disputes, ICSID is the direct main body to resolve international investment disputes, while its arbitration jurisdiction is the prerequisite and the primary issue for the arbitral tribunal to resolve international investment disputes. At present, the expansion of ICSID's arbitration jurisdiction is an issue that needs to be addressed by the international community. This paper is divided into four parts, the first part of the overview starts from the main body ICSID, the second part analyzes the expansion path of ICSID's arbitration jurisdiction and its reasons, the third part puts forward the reform path of ICSID's arbitration jurisdiction, and the fourth part puts forward China's countermeasures.

The Issue of Voluntariness of Consent to Refer Disputes to the Court of Arbitration for Sport based on the Analysis of Its Status and Principles of Functioning

The article is devoted to the study of institutional and procedural problems related to the resolution of conflicts arising in professional and Olympic sports (elite sports). Modern sport seeks to isolate itself from state and international legal regulation, to create its own system of corporate standards, the subjects of which are sports organizations and athletes. In order to impart stability to the introduced system of corporate rules, international non-governmental organizations leading the world sports and Olympic movement also create their own jurisdictional bodies (arbitration courts, the so-called sports tribunals), the purpose of which is to resolve disputes between athletes, sports organizations on corporate rules established by international sports federations and the International Olympic Committee. The central part of this system of sports arbitration courts is the Sports Arbitration Court in Lausanne (Switzerland), whose status is analyzed in detail in this paper.One of the main problems to which the author pays attention, is the non-consensual, in fact forced nature of the spread of the jurisdiction of the sports arbitration courts on athletes, often combined with a prohibition (established in the corporate act — for example, the regulations of sports federations) to appeal to the state courts under a threat of lifelong disqualification. Thus, the structures that govern the world professional and Olympic sports require athletes to refuse to exercise their constitutional right to access to justice. But could an arbitration clause be considered valid if the athlete did not give consent to the consideration of his disputes in the arbitration court (arbitration) and to the choice of arbitration jurisdiction, which in fact was forced? Unfortunately, practice shows that in most cases, when athletes ignore this ban and apply to national courts, appealing against the decisions of the sports arbitration court in Lausanne, the latter make “political” decisions that take the interests of the leading forces in the world sports movement into account.

Challenges towards selecting Saudi Arabia as an arbitral seat for foreign investors

Abstract Identifying the seat of arbitration jurisdiction is of great significance to the arbitral procedure. Countries seek to develop their arbitration laws and harmonize the cross-border arbitral regimes in order to modernize the practices and increase foreign direct investments nationally. Foreign parties aim to select an arbitral seat that is efficient and conforms to international arbitration practices. The parties’ choice of seat dictates the arbitral procedure adopted on the dispute and influences the boundaries of the arbitral awards. This paper evaluates Saudi Arabia as an arbitral seat for foreign investors and considers the key factors affecting the parties’ selection. Further, the paper analyses the legal barriers faced by the parties in association with selecting the Kingdom as a seat for arbitration. The purpose of the paper is to outline the challenges and present recommendations to develop the practices of arbitration in Saudi Arabia to increase its level of conformity to international arbitration standards.

법원의 중재인선정 재판에 있어서의 심리

Could parties raise challenges to the existence or validity of the arbitration agreement in response to the application for judicial appointment of an arbitrator? It is an important and controversial issue and national authorities have taken different approaches.
 In 2020Gue633 case, according the Article 12 of the Korean Arbitration Act a party requested the court to appoint an arbitrator and the other party objected on the ground that she is not a party to the arbitration agreement. More specifically, she argued that she is not the carrier who issued the bill of lading, and therefore she is not bound by the arbitration clause in the Charter Party, which is incorporated in the bill of lading. The Supreme Court of Korea dismissed the special appeal on the lower court’s decision appointing the arbitrator, and set out a standard on what can be considered by a court requested to appoint an arbitrator. The Supreme Court has taken a limited scrutiny approach, and has ruled that court should only consider procedural issues, i.e. the written requirement of arbitration agreement or the existence of deadlock situation, and appoint an arbitrator if those are fulfilled, but should not look into substantive issues such as the existence or validity of the arbitration agreement.
 The limited approach the Supreme Court has taken in that case is coherent with the purpose of arbitration as well as the concept of Competence-Competence. However, the specific method it chose as a part of the limited approach could be somewhat unclear to lower courts or problematic in arbitration practice. Instead of restricting what issues can be considered, many other jurisdictions have rather limited the extent of scrutiny by ruling that courts could conduct only a prima facie review of the arbitration agreement. This will be a more flexible and practical solution, given that there can be various arguments which can be brought in relation to the arbitration agreement. It is also helpful in terms of minimizing the effect of the decision appointing the arbitrator to the future cases challenging the arbitral jurisdiction.

Book Review of Stefan Talmon, The South China Sea Arbitration—Jurisdiction, Admissibility, Procedure

Book Review of Stefan Talmon, <i>The South China Sea Arbitration—Jurisdiction, Admissibility, Procedure</i>

Extensão da cláusula compromissória em contratos coligados: análise doutrinária e jurisprudencial

The purpose of this article is to provide an overview of the interpretation criteria used by national doctrine and jurisprudence regarding the possibility of extending the arbitration clause in linked contracts. Aspects related to the autonomy of the will in arbitration are analyzed, as well as hypotheses for expanding the arbitration agreement to non-signatory third parties, also presenting doctrinal and national Courts positions regarding the extension of the scope of the arbitration clause provided in only one of the related instruments. Thus, it is intended to demonstrate that the main criteria used to expand or restrict the arbitration pact, consist of verifying in the specific case the intensity of the link between the interconnected businesses, with an analysis of the degree of dependence on the obligations and rights existing in each contract vis-à-vis the contract single economic operation, in order to eventually justify the expansion of arbitration jurisdiction by the tacit consent of those involved. Arbitration; linked contracts; arbitration clause; extension; doctrine; jurisprudence.

Briefly Noted

On October 26, 2021, the Court of Justice of the European Union (CJEU) issued its judgment in Case C-109/20 Poland v. PL Holdings. The case concerned an arbitral award issued in favor of PL Holdings against Poland. The arbitration clause which served as the basis for resolving the parties’ dispute is contained in a 2017 bilateral investment treaty between Poland and the Belgium-Luxembourg Economic Union (BLEU BIT). One year after the award was made, the CJEU ruled in Achmea that intra-EU investor-state arbitration clauses in treaties between EU member states are incompatible with EU law. The Court conversely held that commercial arbitration was compatible with EU law because it is an expression of the will of the parties, rather than a consequence of a treaty between states. Poland used Achmea to argue against the arbitral tribunal's jurisdiction, but the objection was considered by the Arbitration Institute of the Stockholm Chamber of Commerce to have been registered too late and Poland was ordered to pay damages to PL Holdings. Poland then brought an action before the Svea Court of Appeal (Svea hovrätt) to set aside the award, based on the invalidity under EU law of the arbitration clause in the BLEU BIT. Though the Swedish court accepted that, based on Achmea, the clause was invalid, it held that Poland's late objection to the jurisdiction of the tribunal and subsequent arbitration with PL Holdings meant that an ad hoc arbitration agreement had been established between the parties that was not precluded by Achmea and thus, the Court denied Poland's request to set aside the award. Poland appealed to the Supreme Court of Sweden (Högsta domstolen), which requested a preliminary ruling from the CJEU as to whether “Articles 267 and 344 TFEU precluded the conclusion of an ad hoc arbitration agreement between the parties to the dispute where the content of that agreement is identical to an arbitration clause that is set out in the BIT and is contrary to EU law.” The CJEU answered this question in the affirmative.

About Legal Policy in the Field of Formation and Implementation Online Dispute Resolution Mechanisms in Civil and Administrative Court Proceedings

The article analyzes the legal policy of the countries of the Council of Europe in the field of the formation and subsequent implementation of new mechanisms for online dispute resolution in civil and administrative proceedings. In this regard, the guidelines for the use of such mechanisms (which are set out in the relevant Recommendations of the Committee of Ministers of the Council of Europe) are discussed in detail in the field of access to justice, equality of arms, evidence and evidence, trial and informed decision, as well as the right to review it. ... Attention is focused on the need to ensure the compatibility of such mechanisms with the key principles of a fair trial and effective remedies set out in the case law of the European Court of Human Rights, including the principles of publicity, transparency, directness, oral hearing and equality of persons involved in a case.A separate place is given to the problem of using online dispute resolution mechanisms in Russian civil and administrative proceedings. It is noted that today the domestic legislator, as part of the development of its own legal policy agenda, increasingly integrates innovative digital communication methods into the activities of the subjects of procedural legal relations. In particular, in the near future, along with video conferencing, the legislator will allow courts of general and arbitration jurisdiction to use web conferencing as an authentic technology for organizing online meetings and collaboration in real time via the Internet. All this creates a fertile ground for borrowing the positive world experience of introducing the latest mechanisms for online resolution of civil and administrative cases by the justice authorities, taking into account the inviolability of high standards of a fair trial.

Jurisdiction of Tribunals to Settle Intra-EU Investment Treaty Disputes

Abstract The European Court of Justice (ECJ) made a ground-breaking shift away from the current system of investor–State dispute settlement (ISDS) by rendering its judgment in the matter of Achmea v Slovak Republic. However, since March 2018, a large and ever-growing number of investment tribunals have found that the Achmea judgment does not deprive them of arbitral jurisdiction. Against this background, the aim of the present article is to analyse the effects of the Achmea judgment on the jurisdiction of tribunals to settle intra-European Union (EU) investment treaty disputes. By taking due account of the reasoning conducted by the ECJ, the scope of the Achmea jurisprudence will be clarified. It is concluded that the incompatibility of intra-EU ISDS with EU law concerns all intra-EU investment treaties, including article 26 of the Energy Charter Treaty (ECT). On this basis, we ask whether, and to what extent, the applicability of the Achmea judgment is relevant to arbitral jurisdiction. Considering the law applicable to the arbitration agreement, we conclude that International Centre for Settlement of Investment Disputes (ICSID) tribunals and those seated outside the EU remain competent to settle intra-EU investment disputes. In contrast, the Achmea judgment renders ISDS clauses contained in intra-EU investment treaties inoperable if the tribunal is seated within the EU. The article closes with an outlook that puts these conclusions into perspective by considering recent developments such as the EU Member States’ ratification of a multilateral termination treaty.

Counterclaims in Investment Arbitration: Saluka v The Czech Republic

This paper considers the availability of host state counterclaims in investment arbitration using as a case study Saluka v. The Czech Republic, the first decision under the 1976 UNCITRAL Rules and considered “the most comprehensive consideration of arbitral jurisdiction over counterclaims in investor-state dispute settlement.” Section II provides the historical background to Saluka, with specific reference to the Czech transitional economy following the fall of the Iron Curtain, banking sector privatization efforts, use of a mass voucher system, and an overview of the arbitral proceedings. Section III considers the unique “arbitration without privity” nature of investor-state proceedings and the Tribunal’s search for consent over counterclaims in (i) the treaty text of the Netherlands-Czech BIT, (ii) the underlying contract at issue containing a separate mandatory arbitration clause, (iii) the 1976 UNCITRAL Rules, and (iv) the procedural problems presented by privity of contract and the determination of proper parties to the dispute. Section IV weighs the Tribunal’s restrictive test, requiring sufficient juridicial connexity between counterclaims and primary claims, against criticism. Section V concludes that enduring problems presented by Saluka (e.g. protection of vulnerable transitional economies against predatory foreign investment), which echo across an investor-state dispute settlement system in the throes of a legitimacy crisis, may be better resolved through robust creation of substantive obligations, such as an International Convention on Foreign Investment, rather than a reimagining of an already imperfect procedural framework for counterclaims.

Article 5 of the Model Law: Protector of the Arbitral Process?

The question of judicial intervention remains highly significant in international commercial arbitration. Article 5 of the Model Law was included in the text both to identify those matters in which intervention is permitted and to define the nature and manner of such intervention. While Article 5 has been largely effective in regulating judicial intervention in matters expressly governed by the Model Law, the issue of abuse of process raised by the presence of concurrent court and arbitration proceedings has been more contentious. This article contends that this issue should also fall within the scope of the Model Law as a matter concerning court intervention in arbitral jurisdiction. While Article 5 does not directly apply to foreign-seated arbitrations, the policies of limited court intervention and respect for arbitral jurisdiction should still be influential. arbitration, judicial intervention, UNCITRAL Model Law, Article 5, abuse of process, anti-suit injunction, anti-arbitration injunction

L'empresa de la correge et la conquête de la Sicile: Le royaume errant de Martin de Montblanc

L'empresa de la Correge instituée par Martín, duc de Montblanc, se présente com­me une devise qui attache au duc un groupe fermé de chevaliers, dédié a l'exploit militaire, au combat singulier, au pèlerinage, au passage armé, autour du voeu cen­tral, la défense des dames. Les staruts, adoptés avant 1390 et adaptés en 1392, après l'ocupation de Palerme, manifestent un ordre curial et royal; en vingt-et-un para­graphes, sous un décor influencé par les modèles français, les statuts construisent la solide architecture d'un groupe de pouvoir et de combat, qui mène l'entrepise de la conquête de la Sicile, et garantissent solidarité, paiement mutuel des rançons, juridictcion d'arbitrage, unité et efficacité au service de l'État de conquête centré sur Martin le Jeune et gouverné par le duc. À son accession au trône d'Aragon, Martín de Montblanc n'a pas maintenu la devise dans sa fonction politique; il l'a distribuée à des barons catalans, mais aussi aux dames de l'aristocratie, créant par ailleurs ou réac­tivant d'autres hochets mondains, sans désormais véritable politique du symbolique, dont l'État aragonais n'avait pas besoin.

Оптимизация судебной юрисдикции и нагрузки на судебную систему в арбитражных судах

The article considers methodological questions of optimization of a jurisdiction and decreasing of workload at the arbitration courts system. The author analyses objective criteria defining optimality of the arbitration jurisdiction and suggests particular solutions for optimization of the jurisdiction by a subject and procedural form of settlement of economic disputed by the arbitration courts.

Rešavanje o prigovoru nenadležnosti zbog ugovorene arbitraže u sudskoj praksi

It is important to be considered in which way is allocated the jurisdiction between a domestic court and an arbitral tribunal and how to resolve the conflict of competence. Arbitral proceeding will only be allowed in case it is based on a valid and effective arbitration agreement. Nevertheless, judicial power to review arbitral jurisdiction has to be restricted. Excessive court's intervention in arbitration undermines both party autonomy and the efficiency of arbitration and can cause relinquishment of the right to arbitrate. Indeed, it is not uncommon that a court's jurisdiction is invoked by a claimant as a dilatory tactic, however, a party can be noncommittal about arbitration, simply observing an arbitration agreement as null and void, inoperative or incapable of being performed. If a party commences a court proceeding, the party insisting on the enforcement of the arbitration agreement can invoke the parties' agreement to arbitrate as a defense before the national court. If the respondent fails to file a plea before making submissions on the merits the domestic court's lack of jurisdiction is healed. In case that defendant provides arbitration agreement, there is a presumption that the arbitration is competent, unless it is evident that agreement is null and void, inoperative or incapable of being performed. The role of the domestic court in this proceeding has to be limited and restricted. In Serbia, the protective barriers between arbitration and national court systems are the New York Convention and Serbian Law on Arbitration. Domestic courts have frequently been in a position to rule on the objection of lack of jurisdiction, and this paper analyzes how the courts dealt with conflict of competence. Several following issues have been identified, issues that the commercial courts and the Serbian Supreme Court of Cassation had to address in order to decide on the validity of the arbitration agreement. Furthermore, due to the fact that one of the main goal in the arbitration field is the harmonization of the laws as well as the case law, the author provides some guidelines and conclusions so that the Serbian courts can more confidently respond to these challenges.

Emergency Arbitration: Mere Innovation or Vast Improvement

Abstract Effectiveness of emergency arbitration is a disputable question, which was touched by several commentators since it was first introduced in 2006. Concerns have been raised in relation to the enforceability of emergency reliefs under the New York Convention and the risk of concurrent jurisdiction between emergency arbitrators and national courts in granting interim measures prior to the constitution of the arbitral tribunal. A more specific concern is related to the suitability of introducing this mechanism, to investment arbitration. This article argues that adopting an international instrument for enforcing emergency reliefs will be the best solution. As for investment arbitration, emergency arbitrators are no less important in this type of arbitration than in commercial arbitration. However, certain features of emergency arbitration shall be tailored to meet the distinct nature of investment cases. Although certain amendments are needed to enhance the effectiveness of this relatively new mechanism, the future of emergency arbitrator is still optimistic. Therefore, to avoid any duplication of fora, courts are expected to respect emergency arbitrator's jurisdiction and only intervene when the latter is not capable of granting a relief.