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August 20, 2009

Draft UNCITRAL Rules Revisions: Arbitral Power to Rule on Jurisdiction

The Working Group on Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) will convene for its 51st session in Vienna, Austria, from September 14-18, 2009. For the past two years, the Working Group has been engaged in developing a proposed revised draft of the UNCITRAL Arbitration Rules (“Rules”). When completed, this will be the first wholesale revision of the Rules since their initial adoption in 1976.

I will attend the Working Group session as a member of the observer delegation of the Association of the Bar of the City of New York.

In this post and ensuing posts, I will discuss some of the salient proposed changes in the Rules that will be considered at the upcoming Working Group session.

These posts do not purport to make a comprehensive review, even of the changes in a single Rule. The purpose here is to distill some highlights. Complete reports on the Working Group’s work can be read and downloaded at the UNCITRAL website.


Power of Tribunal to Rule on Its Jurisdiction

Article 21 (1) of the Rules concerns the power of the arbitral tribunal to make decisions about its jurisdiction. The present text of Article 21 (1) states: “The arbitral tribunal shall have the power to rule on objections that it has no jurisdiction, including any objections with respect to the existence or validity of the arbitration clause or of the separate arbitration agreement.” The proposed amended Article 21(1) first sentence would state: “The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.” The Working Group’s comment states that there was sentiment in favor of re-drafting the rule along the lines of Section 16(1) of the Model Law — whose phrasing corresponds to the above-quoted passage from the proposed revised rule.

The Working Group’s March 2009 report on its June 2008 session states that the purpose of the re-drafted text is “to clarify that the arbitral tribunal had the power to raise and decide upon issues regarding the existence and scope of its own jurisdiction.”

In certain circumstances an arbitral tribunal may wish to rule on its own jurisdiction even if there has not been an objection made by a party. For example, a party might express its views on the tribunal’s jurisdiction by refusing to appear in the proceedings. Parties might also raise no objection to jurisdiction until after the final award, and then in a friendly home court (one that might not apply a waiver doctrine), raise the tribunal’s lack of jurisdiction as a ground for denying recognition and enforcement. The arbitral tribunal, anticipating such tactics, may wish to enhance the enforceability of its award by providing a reasoned ruling on its jurisdiction. The absence of an “objection” should not prevent it from doing so. Thus the proposed amendment is very desirable.