Article 16 - Competence of arbitral tribunal to rule on

its jurisdiction
1. The arbitral 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 jure the invalidity of the arbitration clause.

2. A plea that the arbitral tribunal does not have jurisdiction shall be raised
not later than the submission of the statement of defence. 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. 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.

3. The arbitral tribunal may rule on a plea referred to in paragraph (2) of

this article either as a preliminary question or in an award on the merits.
If the arbitral tribunal rules as a preliminary question that it has
jurisdiction, any party may request, within thirty days after having
received notice of that ruling, the court specified in article 6 to decide the
matter, which 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.

Article 34 - Application for setting aside as exclusive

recourse against arbitral award
147
1. Recourse to a court against an arbitral award may be made only by an
application for setting aside in accordance with paragraphs (2) and (3) of
this article.

2. An arbitral award may be set aside by the court specified in article 6

only if:

(a) the party making the application furnishes proof that:

 (i) a party to the arbitration agreement referred to in article 7 was under
some incapacity; or the said agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon, under the
law of this State; or

(ii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or

(iii) the award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or contains decisions on
matters beyond the scope of the submission to arbitration, provided that,
if the decisions on matters submitted to arbitration can be separated from
those not so submitted, only that part of the award which contains
decisions on matters not submitted to arbitration may be set aside; or

(iv) the composition of the arbitral tribunal or the arbitral procedure was
not in accordance with the agreement of the parties, unless such
agreement was in conflict with a provision of this Law from which the
parties cannot derogate, or, failing such agreement, was not in accordance
with this Law; or

(b) the court finds that:

(i) the subject-matter of the dispute is not capable of settlement by

arbitration under the law of this State; or

(ii) the award is in conflict with the public policy of this State.

3. An application for setting aside may not be made after three months
have elapsed from the date on which the party making that application
had received that award or, if a request had been made under article 33,
from the date on which that request had been disposed of by the arbitral
tribunal.

4. The court, when asked to set aside an award, may, where appropriate
and so requested by a party, suspend the setting aside proceedings for a
period of time determined by it in order to give the arbitral tribunal an
opportunity to resume the arbitral proceedings or to take such other action
as in the arbitral tribunal's opinion will eliminate the grounds for setting
aside.
Article 36 - Grounds for refusing recognition or
enforcement
164
1. Recognition or enforcement of an arbitral award, irrespective of the
country in which it was made, may be refused only:

(a) at the request of the party against whom it is invoked, if that party
furnishes to the competent court where recognition or enforcement is
sought proof that:

(i) a party to the arbitration agreement referred to in article 7 was under

some incapacity; or the said agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon, under the
law of the country where the award was made; or

(ii) the party against whom the award is invoked was not given proper
notice of the appointment of an arbitrator or of the arbitrator proceedings
or was otherwise unable to present his case; or

(iii) the award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions
on matters beyond the scope of the submission to arbitration, provided
that, if the decisions on matters submitted to arbitration can be separated
from those not so submitted, that part of the award which contains
decisions on matters submitted to arbitration may be recognized and
enforced; or

(iv) the composition of the arbitral tribunal or the arbitral procedure was
not in accordance with the agreement of the parties or, failing such
agreement, was not in accordance with the law of the country where the
arbitration took place; or

(v) the award has not yet become binding on the parties or has been set
aside or suspended by a court of the country in which, or under the law of
which, that award was made; or
(b) if the court finds that:

(i) the subject-matter of the dispute is not capable of settlement by

arbitration under the law of this State; or

(ii) the recognition or enforcement of the award would be contrary to the

public policy of this State.

2. If an application for setting aside or suspension of an award has been

made to a court referred to in paragraph (1) (a) (v) of this article, the
court where recognition or enforcement is sought may, if it considers it
proper, adjourn its decision and may also, on the application of the party
claiming recognition or enforcement of the award, order the other party
to provide appropriate security.

Appeal to the RTC

Under the Model Law Article 16(3), when the arbitral tribunal defers, until the
hearing as part of its award, its ruling on the issue of existence, invalidity or enforceability
of an arbitration agreement, a party may appeal that ruling to a Regional Trial Court with
jurisdiction. While such an appeal is made, the arbitral tribunal may either suspend or
continue the arbitration proceedings. In the latter case, it may make an award.
If, on the other hand, the arbitral tribunal finds that it has no jurisdiction, the Model
Law contains no provision allowing judicial review of such determination, although the
right of the affected party to seek judicial review of that determination is not open to
question. The Model Law also contains no provisions on whether the failure of a party to
request the court to decide the matter after the ruling of the arbitral tribunal in favor of its
own jurisdiction precludes it from raising the issue at the stage of enforcement of the
award. When a court, upon being requested to do so, decides the issue of validity of the
arbitration agreement and the jurisdiction of the arbitral tribunal, the court’s decision “shall
be subject to no appeal”. This does not imply that this determination is not subject to
review by an appellate court. Since the issue is one which can be submitted to the court
for determination at the stage where a party applies with the court for setting aside the
award under Model Law Article 34(2)(a)(i), the court can review the issue and the
determination of the court on this issue is further subject to appellate review.
Disputes Involving a Mix of Arbitrable and Non-Arbitrable Issues

When a request is made to refer to arbitration parties with disputes which involve
a mix of arbitrable and non-arbitrable issues, some courts in other jurisdictions have
decided that arbitration should proceed while other courts have ruled otherwise. The ADR
Act in its Section 25 provides that the court shall refer to arbitration those parties who are
bound by the arbitration agreement although the civil action may continue as to those
who are not bound by such arbitration agreement. In order to ensure compliance with
Section 25 of the ADR Act, Rule 4.7 of the Special ADR Rules, provides:

“4.7 Multiple actions and parties—The court shall not decline to refer some or all
of the parties to arbitration for any of the following reasons:

a.) Not all of the disputes subject of the civil action may be referred to arbitration;
b.) Not all of the parties to the civil action are bound by the arbitration agreement
and referral to arbitration would result in multiplicity of suits;
c.) The issues raised in the civil action could be speedily and efficiently resolved
in its entirety by the court rather that in arbitration;
d.) Referral to arbitration does not appear to be the most prudent action; or
e.) The stay of the action would prejudice the rights of the partied to the civil action
who are not bound by the arbitration agreement.
Timeliness of Issue of Competence
Model Law Article 16(2) provides that the issue of jurisdiction of an arbitral tribunal
may be raised not later than the filing of the statement of defense or answer of the
respondent of the respondent or of a motion to dismiss filed by him. The arbitral tribunal
may admit a later plea of it considers the delay justified. But before the issue is submitted
to an arbitral tribunal, it becomes necessary for an arbitral tribunal to be constituted to
which the issue of jurisdiction may be submitted. Constitution of an arbitral tribunal,
however, requires participation of the parties in the appointment of sole arbitrator or of
their respective arbitrators for a tribunal. Thus, Model Law Article 16(2) provides that: “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 has participated in the appointment of, an arbitrator.”

The submission to the arbitral tribunal of the issue that it does not have jurisdiction
because the arbitration agreement does not exist or is otherwise invalid, which should be
made not later the time for the submission of the statement of defense or answer, will be
difficult for a party to follow

Immediate Judicial Review of Tribunal’s Determination on its Jurisdiction

The analytical comments to the draft of the Model law by various States and by the
International Bar Association are helpful to the arbitrators and the courts in understanding
the application of Model Law Article 16(3). Austria, India, Norway, Poland, and the IBA
expressed the view that a ruling of the arbitral tribunal that it has jurisdiction should be
open to immediate court review. Austria particularly observed that continuing the
proceedings may cause considerable cost and loss of time. Thus, if the arbitral tribunal
should rule on its jurisdiction in the form of an interim award, this ruling could be
immediately contested by an action to set aside under the Model Law Article 34. Norway
and the IBA in fact suggested that it be mentioned in this provision that a ruling by the
arbitral tribunal that it has jurisdiction may also be raised either in an action for setting it
aside or as a defense to an action for recognition and enforcement. The IBA
acknowledged that it is the arbitral tribunal that should have primary authority to determine
questions of its jurisdiction including questions related to the validity of the arbitration
agreement. It observed that the arbitral tribunal’s decisions on these matters ultimately
will be subject to court control. Thus, it was proper to invoke court intervention at an early
stage to avoid unnecessary delay and costs. Many practicing lawyers also feel that court
intervention should be allowed to prevent the arbitral tribunal from exceeding its authority
or failing to comply with the requirement of due process. Thus, while the policy of limiting
court intervention to a minimum is understood, IBA suggested that it should not be applied
so rigidly as to lead to extreme situations which may result in unnecessary disruption and
delay of the arbitration proceedings and cost of arbitration to the parties.

The Special ADR Rules recognize the right of a party to petition the court for judicial
relief from a ruling of the arbitral tribunal on a preliminary question upholding or declining
its jurisdiction. This petition may be filed within 30 days after having received notice of
that ruling by the arbitral tribunal. The court shall render judgment on the basis of the
pleadings filed and the evidence, if any, submitted for resolution. The court shall dismiss
the petition if it does not appear to be prima facie meritorious. During the pendency of the
petition, the court shall not enjoin the arbitration proceeding. The judicial recourse to the
court shall not prevent the arbitral tribunal from continuing the proceedings and rendering
its awars.

A party may file a motion for reconsideration from a decision of the court and if the
court affirms the arbitral tribunal’s jurisdiction, that decision shall not be subject to an
appeal or to a petion for certiorari. On the other hand, if the court rules that the arbitral
tribunal has no jurisdiction, that ruling may be the subject of a petition for certiorari.

If the arbitral tribunal defers its resolution on the preliminary question concerning
its jurisdiction until final award, no motion for reconsideration nor an appeal or a petition
for certiorari is allowed, and the aggrieved party must await the final award before seeking
appropriate judicial recourse.

If the court is unable to render a decision on the petition questioning the tribunal’s
preliminary ruling affirming its jurisdiction, the petition shall become ipso facto moot and
academic and shall be dismissed by the court.
Objection that Tribunal is acting in Excess of its Jurisdiction

There may be no issue relating to the validity or enforceability of the agreement,

or the arbitrability of the dispute may be conceded. However, in the course of arbitration,
a party to the arbitration may question the exercise of authority by the arbitral tribunal and
allege that it is acting in excess or beyond the scope of its authority. Model Law Article
16(2) requires a party…

MODEL LAW ARTICLE 34and 36 Court Review of the Decisions on the Jurisdiction
of the Tribunal

If the arbitrators decide that they have jurisdiction, there are two ways of attacking their
decision:
1. setting aside procedure, under Article 34
2. procedure of recognition and enforcement, under Article 36

Under the first: a court should set aside an award if the arbitration agreement ‘‘is not valid
under the law to which the parties have subjected it’’ or the lex fori of the setting aside
court.

The same reason is contained in the second: in respect to refusal of recognition of the
award. Lack of valid and binding arbitration agreement obviously also covers the cases
when no arbitration agreement was concluded at all. Lack of an appropriate agreement
in respect of the subject-matter of the dispute partly overlaps with the reasons for setting
aside, i.e. with the situations in which the award deals with a dispute ‘‘not contemplated
by or not falling within the terms of the submissions to arbitration, or contains decisions
on matters beyond the scope of the submission to arbitration’’.
SECTION 17 Interim measures
Can the arbitral tribunal provide an interim meaure?

- Yes, Section 17 of the Model Law permits an arbitral tribunal to provide interim
measures of protection as deems fit
 The preservation, interim custody or sale of any goods which are the subject
matter of the arbitration agreement
 Securing the amount in dispute in the arbitration
 The detention, preservation or inspection of any property or thing
 Interim injunction or the appointment of a receiver;
 Such other interim measure of protection as may appear to the arbitral tribunal
to be just and convenient
NOTE: operative until the dispute is resolved by an award to protect the interest of a party