Be Dr AbdelGadir Warsama, Legal Counsel
The law, the Civil Procedure, explains the jurisdiction granted to all Judges. This jurisdiction could be by location (domicile) or by the amount \ value of the case.
This makes the issue of jurisdiction very clear and accordingly judges in Courts follow the procedure based on their judicial jurisdiction. If, there is no jurisdiction, the Judge will decide accordingly in the first session.
When it comes to arbitration, also, the issue of jurisdiction is very important and valid. Arbitrators or arbitral tribunals are to act, provided that they have the necessary jurisdiction to perform their duties and to issue valid final awards.
Any party can say that, there is lack of jurisdiction and the arbitrators are to go down from the bench. However, this shall take place according to the UNICITRAL rules of arbitration.
Pleas as to the jurisdiction of the arbitral tribunal, are governed by Article 23 1, of the Rules. This article provides that, the “arbitrator” or the arbitral tribunal shall have the power to rule on its own jurisdiction, this is including any objections with respect to the existence or validity of the arbitration agreement.
For that purpose, an arbitration clause that 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 shall not entail the invalidity of the arbitration clause.
This reminds us of the independence of the LCs clause agreement from the main contract to be financed by the LCs. In other words, this to be taken as a contract inside another contract & each is independent and valid contract, even if the other contract becomes void for any reason.
A plea that the arbitral tribunal does not have jurisdiction shall be raised no later than in the statement of defense or, with respect to a counterclaim or a claim for the purpose of a set-off, in the reply to the counterclaim or to the claim for the purpose of a set-off. Very important to say that, a party is not precluded from raising such a plea by the fact that it has appointed, or participated in the appointment of, an arbitrator.
This is very important point because the selection ends by the formation of the tribunal and shall not have any impact on its validity.
A plea that the arbitral tribunal is exceeding the scope of its authority “or Ultra Vires 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 tribunal may, in either case, admit a later plea if it considers the delay is justified. The arbitral tribunal may rule on a plea referred to in the Rules, either as a preliminary question or in an award on the merits.
The tribunal may continue the arbitral proceedings and make an award, notwithstanding any pending challenge to jurisdiction before a court.
However, in some laws, the arbitral tribunal shall consider the issue of jurisdiction before proceeding in the arbitration process. This is based on the fact that the issue of jurisdiction is a matter of law rather than a matter of fact, which is to be decided first by the arbitrators.
Jurisdiction for arbitrators is of paramount importance and it is essential for the parties to stand-up and be sure of the availability of such power. Otherwise, justice will be in the hands lacking the power and necessary jurisdiction.
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