Jurisdiction and Admissibility in International Arbitration

Updated: Aug 26



A) Concepts of Jurisdiction and Admissibility

Jurisdiction (from jus dicere) refers to the activity and power of declaring what the law is; In arbitration proceedings, jurisdiction is substantially related to parties’ consent for arbitration. Existence of jurisdiction depends on the parties’ consent to refer the dispute to the Tribunal and the Tribunal has the sole authority to decide whether it has power to solve the dispute or not (Kompetenz- Kompetenz). Jurisdiction with its’ several dimensions – or rationes – for a dispute to be heard (ratione temporis, loci, personae and materiae) constitutes a legitimate power to state the law in an authoritative and final manner. If a court has jurisdiction, it is entitled and required to make the necessary legal determinations to process the claim.


Indeed, the admissibility of a claim is a separate matter, which falls to be considered and reviewed only when the jurisdiction is not contested or is positively established. Impediments that do not arise from a lack of consent – these impediments fall under admissibility – to its primary jurisdiction may prevent a tribunal from decide a case on the merits.


A widespread understanding is that defects of the claim relating to admissibility are less fundamental and curable than those impeding the primary jurisdiction of the tribunal. Grounds for inadmissibility might be subject to different rules of procedure such as the tribunal might have no obligation to raise them ex officio or the parties could lose the right to invoke them after a certain phase of the proceedings. Moreover, where the jurisdiction of a tribunal is fixed, the inadmissibility of a claim can sometimes be cured. A crucial difference concerns the possibility of review. Findings on jurisdiction might be subject to the review of a controlling body entitled to ascertain that the decision-maker did not exceed its powers, but determinations on the admissibility of a claim are normally final, or at least as final as the findings on the merits.


B) Matters of Jurisdiction and Inadmissibility

Jurisdiction is examined with its’ several dimensions; which are ratione temporis, loci, personae and materiae. Jurisdiction may be limited by its dimensions such as ratione materiae, ratione temporis, loci etc. All these dimensions of jurisdiction have a direct connection with consent: when the dispute lacks one of the qualifying features, conclusion reached is that the objecting defendant has not consented to dispute resolution in the forum seized by the claimant.


The checklist provided in Malicorp v. Egypt Case, sets the legal and factual determinations on determining the jurisdiction of a Tribunal in the framework of investment arbitration; These components of the dispute are considered as must have ones to decide that the Tribunal has

  • Jurisdiction over the dispute.

  • The consent of the Respondent State

  • The Consent of the Investor

  • The nationality of the Investor

  • Legal dispute: The dispute should not be in a political nature

  • Relating to an investment

  • Investment should be in the territory of the Respondent State

  • An alleged violation of Treaty


On the other hand, general grounds for inadmissibility could be read as followed;

  • Indeterminacy of the claim’s object: The tribunal is unable to recognize a discrete claim or the remedy sought or the claim litigated is a different one from the one presented at the beginning.

  • Absence of a genuine legal dispute: There is no dispute, or the claim refers nominally to norms falling within the jurisdiction of the tribunal, but the question submitted depends on purely political matters and exceeds the boundaries of adjudication.

  • Lack of legal interest or mootness: the claimant bears no legal interest in the dispute or thee case has become moot during the proceedings.

  • Coordination with connected proceedings: when there is triple identity between two disputes, lis pendens or res judicata could arise in international adjudication. Alternatively, the Tribunal may decide that the dispute should have taken to another forum (forum non-conveniens)

  • Non-exhaustion of local remedies: The defendant has consented to the use of the international tribunal by a foreigner only as a subsequent and subsidiary forum to its domestic judicial system, not as an alternative.

  • Procedural irregularities: the claimant has not complied with the applicable procedure (for example, it has not respected a deadline for the seisin)

  • Nationality of the claim: A State cannot accompany a foreign citizen’s claim in diplomatic protection; to invoke a protection treaty an investment/investor must have the nationality of a State party to it (other than the host State), at the time of the claim.

  • However, there is still a blur between jurisdiction and admissibility in investment arbitration. Two main reasons lead to this confusion; First, matters of jurisdiction and admissibility are conflated in the phase of the procedural objections. Second, specific investment agreements, the ICSID Convention and other procedural instruments like the UNCITRAL Convention contain different language concerning the powers of the tribunal.

For example, when an investor is alleged with conducting illegal actions in the host State (Objection raised by the investor stating that Claim is out of the jurisdiction of the Tribunal) , there are different ways that Tribunal may decide such as;

  • A lack of jurisdiction: of the tribunal ratione materiae (particularly if there is a treaty or statutory clause requiring the investment’s legality under domestic law,

  • The inadmissibility of the claim under the doctrines of international public order, clean hands, estoppel, abuse of rights/process,

  • A finding on the merits against the investor; or, possibly,

  • A finding on the merits that might ultimately favor the investor but takes the illegality into account in the calculation of damages owed by the State or even just in the allocation of legal costs


C) Conclusion

Although the blur between jurisdiction and admissibility has not been clarified in the field of investment arbitration, it is certain that consent related objections will be directed to jurisdiction of the Tribunal. Admissibility objections may play role on the dismissal of the case even if the Tribunal establishes its’ jurisdiction, since the existence of inadmissibility grounds will impede the competence of the Tribunal. Grounds for objection to jurisdiction and admissibility are both required to be raised at the early stage of proceedings however, while the decision on jurisdiction may be subject to review of the controlling body, findings on the admissibility will be a final decision given by the arbitral Tribunal.


Kaynakça

F. Fontanelli, Jurisdiction and Admissibility in Investment Arbitration, Brill Publishing, 2017.


Yazar

Mehmet Tuğberk DEKAK

Esra Aydemir