THE PRE-EMINENCE OF THEKOMPETENZ-KOMPETENZ PRINCIPLE

INTRODUCTION

In current arbitration law, the notion of Kompetenz-Kompetenz (German for "competence-competence") is widely accepted. This doctrine establishes the arbitral tribunal's competence to determine whether it can consider a case on its own jurisdiction without the intervention of courts. In other words, the Arbitral Tribunal has the 'competence' to judge its own 'competence.' The rationale is to ensure quick resolution of disputes because the theory permits the arbitral tribunal to resolve jurisdictional issues at the outset.

INTERNATIONAL FRAMEWORK

Several international LAW OF PARTNERSHIP have acknowledged and adopted this principle. In Article 23(1) of the UNCITRAL Arbitration Rules, 2013, the UNCITRAL Model Law endorses this notion. "The arbitral tribunal should have the power to judge on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement," the article declares emphatically. Many other arbitral institutions have chosen the same approach as well. The UNCITRAL Model Law is used by the majority of these institutions.

In addition, the Singapore International ARBITRATION STEP BY STEP Centre (SIAC) Rules include the Kompetenz-Kompetenz premise. Article 28.2 of the Model Law proposes the same wordings as Article 23.1 of the Model Law. In the case of Malini Ventura v. Knight Capital Pvt Ltd &Ors, the Singapore High Court reaffirmed the importance of theKompetenz-Kompetenz concept in 2015. In this case, the court considered whether it is for the arbitral tribunal to decide whether the existence of an arbitration agreement is in issue, and found that it is. This case highlighted the Singapore courts' adherence to the principle of Kompetenz-Kompetenz, which states that the tribunal has first say on problems pertaining to its jurisdiction.

The Swiss Chambers Arbitration Institution (SCAI) has likewise adopted the Kompetenz-Kompetenz principle in Article 21.1 of the Swiss Rules of International Arbitration. The Swiss Federal Supreme Court recently confirmed an arbitral judgement based on the widely recognised principle of Kompetenz-Kompetenz in international arbitration in a decision published on November 2, 2020.

The Supreme Court further reminded the arbitral panel that contesting the validity or existence of an arbitration agreement does not prevent the arbitral tribunal from proceeding with the arbitration and issuing a judgement. Rather, the principle of Kompetenz-Kompetenz empowers the arbitral panel to make a judgement on their own jurisdiction before a state court has ruled on the issue.

In addition to these Rules, the Hong Kong International Arbitration Centre (HKIAC) and the London Court of International Arbitration (LCIA) have accepted the principle in their respective rules under Articles 19.1 and 23.1.

INDIA'S STATUTORY FRAMEWORK

This idea is codified in Section 16 of the Arbitration and Conciliation Act, 1996 in Indian law. The arbitral tribunal is permitted to rule on its own jurisdiction, according to this clause. A change was made to the 1996 Act in 2015. As a result of this Amendment, Section 16's perspectives were effectively enlarged. Section 16 now covers issues such as limitation, agreement, and satisfaction. As a result, if a party chooses to contest the arbitral tribunal's jurisdiction,

Section 16 sets a deadline for a party to the arbitration proceedings to file a plea before the panel claiming that the tribunal lacks jurisdiction. Section 16(2) specifies that such a plea may not be raised after the statement of defence has been filed. When an issue considered to be beyond the tribunal's area of jurisdiction is raised during the proceedings, a plea stating that the tribunal has exceeded its authority must be raised as quickly as possible. In Olympus, the Supreme Court defined the situation.

The usage of the terms "as soon as" and "no later than" in the clause show that such a plea must be taken without excessive delay, according to Superstructure Pvt. Ltd. v. Meena Vijay Khetan. The tribunal, on the other hand, has the authority to accept a plea as described above if it believes the reason for the delay in filing a plea is legitimate.

JUDICIAL PRECEDENCE IN INDIA

Many times, Section 16 has been read in conjunction with Section 11 of the Act, which deals with the appointment of arbitrators. In the case of SBP & Co. v. Patel Engineering in 2005, Section 16 was combined with Section 11 for the first time. In this instance, the Supreme Court effectively undercut the Kompetenz-Kompetenz theory.

"Where jurisdictional problems are resolved under Section 11 before a reference is made, Section 16 cannot be construed to authorise the arbitral tribunal to disregard the decision delivered by the judicial authority or the Chief Justice before the reference was made," the Court said. This decision drew a lot of criticism because it weakened the power of the arbitral tribunal mentioned.

The Supreme Court detailed its interpretation of Section 16 in the matter of Indian Farmers Fertilizers Cooperative Limited v. Bhadra Products. The question in this case was whether limitation is a jurisdictional issue within the arbitral tribunal's jurisdiction or an issue that the panel must consider separately at a later time.

The Supreme Court determined that the issue of limitation is not a jurisdictional issue that must be resolved under Section 16 of the Act. The Court further decided that an arbitral tribunal's order on the issue of limitation should be interpreted as an interim award entitled to appeal under Section 34 of the Act.