Jurisdiction of the Tribunal: Section 16

In one line

Section 16 enacts the doctrine of kompetenz-kompetenz, that a tribunal may rule on its own jurisdiction, fixes the time limits for taking a jurisdictional plea, and makes the consequences of the ruling asymmetrical: an order accepting the plea is appealable at once, an order rejecting it is not.

Section 16(1)

The arbitral tribunal MAY RULE ON ITS OWN JURISDICTION, INCLUDING RULING ON ANY OBJECTIONS WITH RESPECT TO THE EXISTENCE OR VALIDITY OF THE ARBITRATION AGREEMENT, and for that purpose:

(a) an arbitration clause which forms part of a contract SHALL BE TREATED AS AN AGREEMENT INDEPENDENT OF THE OTHER TERMS OF THE CONTRACT; and

(b) a decision by the arbitral tribunal that the contract is NULL AND VOID SHALL NOT ENTAIL IPSO JURE THE INVALIDITY OF THE ARBITRATION CLAUSE.

Two doctrines sit in one sub-section. Kompetenz-kompetenz is in the opening words: the tribunal decides its own jurisdiction. SEPARABILITY is in clauses (a) and (b): the arbitration clause is a separate agreement and survives the death of the contract that contains it. The second exists to make the first workable, because a tribunal whose authority died with the contract could never rule that the contract was void.

The time limits: 16(2) and 16(3)

16(2): a plea that the tribunal DOES NOT HAVE JURISDICTION shall be raised NOT LATER THAN THE SUBMISSION OF THE STATEMENT OF DEFENCE; however, a party shall NOT BE PRECLUDED from raising such a plea MERELY BECAUSE HE HAS APPOINTED, OR PARTICIPATED IN THE APPOINTMENT OF, AN ARBITRATOR.

16(3): a plea that the 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.

16(4): the tribunal MAY ADMIT A LATER PLEA in either case IF IT CONSIDERS THE DELAY JUSTIFIED.

The two limits answer different problems. A challenge to jurisdiction as a whole must come at the outset, before the defence. A challenge to a particular claim as outside the reference cannot be made at the outset, because nobody knows what will be claimed, so it must be made when that claim appears.

The asymmetry: 16(5) and 16(6)

16(5): the tribunal shall decide on a plea under 16(2) or 16(3) and, WHERE IT REJECTS THE PLEA, CONTINUE WITH THE ARBITRAL PROCEEDINGS AND MAKE AN ARBITRAL AWARD.

16(6): a party AGGRIEVED BY SUCH AN ARBITRAL AWARD may make an application FOR SETTING ASIDE THAT AWARD IN ACCORDANCE WITH SECTION 34.

Contrast section 37(2)(a), which makes an order ACCEPTING a plea under section 16(2) or 16(3) APPEALABLE.

The scheme is deliberate. An order accepting the plea ENDS the arbitration, so the aggrieved party needs an immediate remedy or it has none. An order rejecting the plea CONTINUES the arbitration, and the objection can be preserved and taken with everything else after the award.