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Jul 01, 2008

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“Negative Effect of Competence-Competence: The Rule of Priority in Favor of the Arbitrators” in Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice (E. Gaillard, D. Di Pietro, Editors) Cameron May, 257 (2008)

The development of international arbitration law has unquestionably benefited from the vast acceptance of the 1958 New York Convention and its pro-arbitration stance. Although essentially concerned with the back end of the arbitral process through the facilitation of the recognition and enforcement of arbitral awards, the New York Convention extends its protection to the front end of the arbitral process through the recognition and enforcement of the parties’ agreement to settle their disputes by international arbitration. The basic requirement that the parties to an arbitration agreement honour their undertaking to submit to arbitration any disputes covered by their agreement entails the consequence that the courts of a given country are prohibited from hearing such disputes. If seized of a matter covered by an arbitration agreement, the courts will be required to refer the parties to arbitration. This principle is embodied in Article II(3) of the New York Convention. [...] A court applying Article II(3) is faced with the crucial question of the extent of its review of the relevant arbitration agreement. [...]

The answer [...] is to be found in the notion of competence-competence, one of the founding principles of international arbitration law. Providing for the arbitrators’ power to rule on their own jurisdiction, this principle embodies the mirroring effect that the courts should refrain from engaging into the examination of the arbitrators’ jurisdiction before the arbitrators themselves have had an opportunity to do so. Known as the 'negative effect of the principle of competence-competence’, this rule of priority in favour of the arbitrators, today increasingly recognised in
practice, exemplifies the specific nature and autonomy of international arbitration, in full harmony with the New York Convention’s philosophy of recognition of the validity of the arbitration agreement and of the award resulting from the arbitral process.

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Authors and Contributors

Yas Banifatemi

Partner

International Arbitration

+33 1 53 89 70 00

+33 1 53 89 70 00

Paris

Emmanuel Gaillard

Partner

International Arbitration

+33 1 53 89 70 00

+33 1 53 89 70 00

Paris