ICDR's 2021 Rules Address Compétence-Compétence; Tension with New Restatement Continues

by Andrew Flake

The International Centre for Dispute Resolution (ICDR) has updated its rules for international mediation and arbitration, effective March 1, 2021. Because ICDR has a record of thoughtfully advancing innovation in ADR, and because it continues to see a high number of new filings, it is worth practitioners’ time to be familiar with the new rule set. I want to discuss one aspect in this post that I think is significant: stronger and more direct language supporting a tribunal’s power to determine its own jurisdiction.

The question here is, can the arbitrator decided arbitrability? In international arbitration, it is generally understood that the tribunal, not the court, make this determination. Indeed, international arbitration practice has more or less enshrined this as the compétence-compétence  doctrine. Where the arbitration is seated in the U.S., however, the presumption is different, and focuses on case-specific intent: A court will resolve disputes over whether something is arbitrable unless there is evidence of the parties’ intent otherwise. And that evidence, as the Supreme Court determined in its First Options opinion, must be “clear and unmistakable.”

We then ask whether it is enough that the parties incorporate a set of arbitration rules that themselves, like most of them now do, specify the arbitrator will determine jurisdiction? There have been varied and sharply contrasting approaches to this in our courts and among commentators. While some would take selection of the rules themselves as providing that clear and unmistakable evidence, the ALI’s comprehensive Restatement of the Law (The U.S. Law of International Commercial and Investor–State Arbitration), approved in 2019, takes a different approach. It regards those rules as essentially permissive and not excluding court determination of the jurisdiction question.

The updated Article 21 (1), in adding even more explicit language, means to bolster the compétence-compétence principle:

2021: The arbitral tribunal shall have the power to rule on its own jurisdiction, including
any objections with respect to arbitrability, to the existence, scope, or validity
of the arbitration agreement(s), or with respect to whether all of the claims,
counterclaims, and setoffs made in the arbitration may be determined in a single
arbitration, without any need to refer such matters first to a court.

The addition of the bolded language — not present in the previous version, Article 19 of the 2014 rules, certain seems to provide fair evidence that, when parties specify ICDR rules, they intend also to allow the tribunal to rule on its own jurisdiction.

The question was alluded to by Justice Kavanaugh in Henry Schein, Inc. v. Archer & White Sales, Inc. (2019), a case involving AAA’s commercial arbitration rules, though left for determination on remand. The main point of Henry Schein was, rather, to affirm that when the parties have in fact clearly referred the question of arbitration to the tribunal, courts cannot second-guess the tribunal’s decision. Interestingly, in June of last year the Supreme Court granted cert on a question that would have afforded the opportunity for a clear answer — “Whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of
arbitrability to an arbitrator” — but then dismissed the writ in January of this year as improvidently granted.

In upcoming posts, I’d like to look at the role of the “tribunal secretary,” which even for experienced common law arbitrators is often a new concept, and the updated provisions on disclosure of third-party funding (3PF).

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