Irish Court Provides Useful Summary of De Novo Review Under Art.16(3) Model Law

Article 16 of the Model Law is a provision well-known to international arbitration practitioners. Art.16(1) provides that a tribunal may rule on its own jurisdiction; Art.16(2) requires that a challenge to the jurisdiction of the tribunal must be made in a timely manner; and Art.16(3) provides that tribunal may rule on a jurisdiction objection either as a preliminary question or in an award on the merits and that, if the tribunal rules as a preliminary question that it has jurisdiction, any party may request, within thirty days after having received notice of that ruling, the court to decide the matter, which decision shall be subject to no appeal.

In Bowen Construction Limited (in receivership) v Kelly’s of Fantane (Concrete) Limited (in receivership) [2019] IEHC 861, Justice Barniville of the Irish High Court dealt with an application challenging a ruling by a tribunal that it had jurisdiction and, in doing so, provided a useful summary of the application of Art.16(3) and the relevant authorities.

The issue arose because there was some debate between the parties as to the standard review the Court should adopt in carrying out its function under Art.16(3) of the Model law and, in particular, whether the Court should adopt what has been termed a “full judicial consideration” of the “matter” (i.e. the question of jurisdiction) or whether it should consider that question on a “prima facie basis”.

The Court stated [74]:

“I have no hesitation in concluding that the approach which the court must take when deciding on the question of jurisdiction under Article 16(3) is to engage in a “full judicial consideration” of the question. In my view, this follows from the requirement imposed on the court under Article 16(3) to “decide the matter”. It should be borne in mind that the court is not in fact carrying out a “review” of the decision or ruling of the arbitrator on the issue of jurisdiction or hearing an “appeal” from that decision or ruling.

The Court referred to English jurisprudence [85]:

The fact that the application in relation to jurisdiction under Article 16(3) is a full rehearing and not an appeal or a review and without any question of deference, is also, I believe, consistent with the approach taken by the Courts of England and Wales under s. 67 of the Arbitration Act, 1996 (the “English 1996 Act”). That section is the section under which a party to arbitral proceedings may apply to the court to challenge an award of the arbitral tribunal as to its substantive jurisdiction or for an order declaring that an award made by the tribunal on the merits is of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction. Under s. 67(3) of the English 1996 Act, the court may by order confirm or vary or set aside the award. While there is no express statement in s. 67 requiring the court to “decide the matter”, as there is in Article 16(3) of the Model Law, and while there is no express statement as to the nature of the exercise required to be undertaken by the court under that section, it is well established that the section entails a “complete rehearing rather than a review”.

The court referred to Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Government of Pakistan [2011] 1 AC 763, where, in the court of Appeal, Moore-Bick LJ stated [21]: “…our courts have consistently held that proceedings challenging the jurisdiction of an arbitral tribunal under s. 67 of the Arbitration Act, 1996 involve a full rehearing of the issues and not merely a review of the arbitrators’ own decision”, and the subsequent statement by Lord Mance in the UK Supreme Court [30]: “The tribunal’s own view of its jurisdiction has no legal or evidential value, when the issue is whether the tribunal had any legitimate authority in relation to the Government at all. This is so however full was the evidence before it and however carefully deliberated was its conclusion. It is also so whatever the composition of the tribunal – a comment made in view of Dallah’s repeated (but no more attractive for that) submission that weight should be given to the tribunal’s ‘eminence’, ‘high standing and great experience’.” (See also Lord Saville’s comments at 160]. The Court stated [91]:

“I accept that these observations made by the UK Supreme Court, albeit in the context of the enforcement of an arbitral award under the New York Convention, accurately describe the approach which a court should take in “deciding the matter” of jurisdiction under Article 16(3) of the Model Law and the weight which should be given to the arbitrator’s decision or ruling on jurisdiction. The court can carefully consider the reasoning and conclusions of the arbitrator and may find them to be of useful assistance but is not bound or restricted by those findings. The role of the court under Article 16(3) of the Model Law is to embark on a full and complete rehearing of the question of jurisdiction and is required to decide that question itself.”

The court also referred to Singapore authorities:

  • Insigma Technology Co. Ltd v. Alstom Technology Ltd [2008] SGHC 134, where the Court stated that its jurisdiction to decide on the jurisdiction of an arbitral tribunal is an “original jurisdiction and not an appellate one”, referring to the reference to “decide the matter” in Art.16(3) and stating [21] that “this is not language implying that the court’s powers to act are of an appellate nature”.
  • PT First Media TBK v. Astro Nusantara International BV [2013] SGCA 57, where the Court cited with approval the decision of the UK Supreme Court in Dallah and, in particular, the judgment of Lord Mance, stating [30] that the arbitral tribunal’s own view as to its jurisdiction “has no legal or evidential value… [and] this is so however full was the evidence before it and however carefully deliberated was its conclusion…”. In PT First Media, the Singapore Court of Appeal stated [162]:

“The extracted passage represents the leading statement on the standard of curial review to be applied under the New York Convention, and there is no reason in principle for the position under the Model Law to be any different. Significantly, the jurisprudence of the Singapore courts has also evinced the exercise of de novo judicial review… We affirm these local authorities. In particular, we also agree with Lord Mance JSC that the tribunal’s own view of its jurisdiction has no legal or evidential value before a court that has to determine that question.” (at para. 163)

The Court summarised the position as follows [94]:

“In summary, therefore, in deciding on an application in relation to jurisdiction under Article 16(3) of the Model Law, the court is exercising an original and not an appellate jurisdiction. It is not conducting an appeal or a review but a complete de novo rehearing on the question of jurisdiction. While the decision or ruling of the arbitral tribunal on the question of jurisdiction and the reasons for its decision or ruling may be of interest and of assistance and while the court may have regard to the reasoning and findings of the arbitral tribunal, if they are helpful, it is not bound or restricted by them. Further, the court does not afford deference to the arbitrator when exercising its function under Article 16(3) of the Model Law in deciding on the question of jurisdiction…While I was urged by the claimant to have regard to the very significant expertise of the arbitrator in the field of dispute resolution in the construction field, and while that experience was not in any way contested by the respondent, and while I have no hesitation whatsoever in accepting the undoubted experience and expertise of the arbitrator, it would not be appropriate for me to afford any deference to the arbitrator’s decision on jurisdiction or the reasons for that decision having regard to the function which I am required to exercise under Article 16(3) of the Model Law, as discussed and considered in the authorities to which I have referred. I will, therefore, proceed to consider the question of jurisdiction in accordance with the principles derived from those cases and without exercising any deference to the decision of the arbitrator or to the reasons given by her for her decision.”

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Hong Kong Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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