When a question arises as to whether an arbitrator or an arbitral tribunal acted within his jurisdiction, that question will in turn hinge on the wording or particular forms of wording that are employed in the arbitration agreement. In construing arbitration agreements courts have adopted 3 broad principles
1. The courts will make the prima facie assumption that the parties intended all disputes relating to a particular transaction to be resolved by the same tribunal.
2. It will be assumed that unless the words of an arbitration clause are clearly intended to limit the arbitrator’s powers then it will be taken that the parties intended that the arbitrator should have all the powers which will be exercisable by a court.
3. Words of a broad import used in an arbitration clause for example words such as in connection with this agreement should be given their natural meaning in the context in which they are found.
So if e.g in one case a court has interpreted “all disputes arising in relation to” in a limiting way, that is not to say that that same interpretation should be given wherever those words appear in other cases.
Section 6. (1) A court before which proceedings are brought
Rules of the Chartered Institutes of Arbitrators
Rule 16 - deals with jurisdiction and powers of a tribunal. It stipulates that by submitting to Arbitration under these rules the parties submit themselves to these rules.
Is the Agreement that contains the Arbitration Agreement valid? The Arbitral tribunal has powers to determine any question
Section 17. Competence of arbitral tribunal
17. (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-
(c) An arbitration clause which forms part of a contract shall be treated as an independent agreement of the other terms of the contract; and
(d) A decision by the arbitral tribunal that the contract is null and void shall not itself invalidate the arbitration clause.
Where one of the parties says that the agreement is void for whatever reason and argues that the agreement is void, if the agreement is taken up and the arbitration agreement is a clause within that agreement, is the arbitration itself void?
The arbitrator has power to rule on this particular point, so what happens if the arbitrator rules that the agreement is void.
There are 3 related principles
1. Doctrine of Kompetenz Kompetenz - tribunal has power to rule on its own jurisdiction
2. Separability - when the arbitration agreement is part of the contract agreement you can sever _ Heyman v. Darwins Limited - this case seemed to suggest that what Section 17 is trying to say is not achievable.
Section 7 of the 1996 Act,
“Unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement.”
The arbitration provision is to be treated as wholly distinct from the host contract. Consequently it is unaffected by the fact, if such it be, that the host contract is or was invalid, or non-existent or has, at the time the issue arises, become ineffective. These flaws in the host agreement do not percolate down or otherwise infect the arbitration agreement. The issue is simply whether it can be established that there was an arbitration clause that was in fact part of a host “agreement” (however flawed) or whether it can be established that such a clause was intended to become part of the host “agreement”.
If the tests are met, there is a prima facie an arbitration agreement between the parties. One consequence of this is that, insofar as proceedings in court were started in apparent breach of this agreement, they would be expected to be subject to the mandatory stay provided for in Section 9 and discussed above.