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The Model law provisions

The Model Law provides that, where a tribunal finds that it does have jurisdiction, a party may request the court review the decision.

The Model Law (article 16(3)) provides that, where a tribunal finds that it does have jurisdiction, a party may request that the court review the decision. Such a review will be final. So, in a jurisdiction that has adopted article 16 without amendment, there will be no right to appeal a negative jurisdictional ruling.

However, some states have departed from that narrow approach and permit the court to review a negative, as well as a positive, jurisdictional ruling. This is again a matter on which a practitioner must consult the precise provisions of the national law in question.

Within the ASEAN +6, Singapore has modified the Model Law, by s 10 of its International Arbitration Act, and provides for an appeal to the High Court on both positive and negative rulings:

10(1) This section shall have effect notwithstanding Article 16(3) of the Model Law.

(2) An arbitral tribunal may rule on a plea that it has no jurisdiction at any stage of the arbitral proceedings.

(3) If the arbitral tribunal rules

(a) on a plea as a preliminary question that it has jurisdiction; or

(b) on a plea at any stage of the arbitral proceedings that it has no jurisdiction,

any party may, within 30 days after having received notice of that ruling, apply to the High Court to decide the matter.

Moreover, a party may also appeal on the point from the High Court to the Court of Appeal if it obtains the leave of the High Court.

Conversely, in Malaysia, s 18 of the Arbitration Act 2005 remains consistent with the Model Law and provides that: “Where the arbitral tribunal rules on such a plea [that is, a challenge as to jurisdiction] as a preliminary question that it has jurisdiction, any party may, within thirty days after having received notice of that ruling appeal to the High Court to decide the matter”.

Meanwhile, turning to the non-Model Law, the United Kingdom’s Arbitration Act 1996, which will be of importance to practitioners, given that some clients within the ASEAN +6 are likely to be parties to arbitration agreements that have London as the seat, has taken a wider approach. Section 30 makes provision for a review by the court of a tribunal’s decision as to its jurisdiction, whether it is a positive or negative decision. However, s 32 also allows for a party to apply directly to the court for its determination on a preliminary point of jurisdiction where there is either the consent of all parties to such a course being taken or permission is given by the arbitral tribunal.

There is also a further, but rarely used direct avenue to the court: s 45 provides that a party to an ongoing arbitration may make an application to the court (again, either with the agreement of all other parties or with the permission of the tribunal in order for the court to determine a preliminary point of law. It is not inconceivable that this might be a route for a jurisdictional argument, but only where a question of law is in issue that substantially affects the rights of the parties. Where such an application is made with the permission of the tribunal, it must also be shown that the determination of the question is likely to produce substantial savings in costs.

The available means of going to the court provided for in the United Kingdom legislation should serve as a powerful reminder to practitioners of the need to be meticulous in familiarising themselves closely with the exact provisions of the applicable national law, especially where that law is not based on the Model Law. Where the court at the seat of arbitration has the power to hear a jurisdictional challenge in an international arbitration during the course of the arbitral proceedings, the party raising a challenge will sometimes decide to go straight to the court to resolve the issue. It is then a tactical decision, but the principal potential disadvantage is the risk of an adverse court decision that will uphold arbitral jurisdiction. This is likely to have the effect of enhancing the standing of the arbitration and making it more difficult both to challenge the award subsequently and to resist enforcement of any subsequent award on the grounds of lack of jurisdiction.

Finally, it must be remembered that, as well as an appeal to/review by the national court of the seat of the arbitration at the preliminary stage and the possibility of an application to set aside if an award is made (in circumstances where the national court has not already ruled on the point at the preliminary stage), it will also be possible (depending on the specific facts and circumstances of the jurisdictional challenge) to argue the matter before the national court of the state where recognition and enforcement of an arbitral award is being sought.

© College of Law
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International Arbitration: Process and Procedure

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