The Arbitrator\u27s Jurisdiction to Determine Jurisdiction

The disorienting effect of language finds illustration in the principle that arbitrators may rule on their own authority. Often expressed as Kompetenz-Kompetenz (literally “jurisdiction on jurisdiction”), the precept has been applied to questions such as who must arbitrate, what must be arbitrated, and which powers arbitrators may exercise. This much-vexed principle possesses a chameleon-like quality that changes color according to the national and institutional background of its application. Moreover, the basic rule that arbitrators may decide on their own jurisdiction says nothing about who (judge or arbitrator) ultimately decides a particular case. Rather, the rule states only that the question of “who decides what” may itself be addressed by an arbitrator. Every jurisdictional ruling by an arbitrator begs two further questions, one relating to timing and the other to finality: (i) when should judges intervene in the arbitral process to monitor possible jurisdictional excess? (ii) in what circumstances (if any) should an arbitrator’s decision on his or her authority be final? Asking the right questions permits attention to costs and benefits of each alternative, enhancing the economic cooperation that can be facilitated by arbitration