The jurisdiction, powers of an arbitrator

The jurisdiction of the arbitral tribunal is essential to the authority and decision-making power of the arbitrators. Awards rendered without jurisdiction have no legitimacy. The absence of jurisdiction is one of the few recognised reasons for a court to set aside or refuse recognition and enforcement of an award.

ARBITRATION INSIGHTS: WITH JACOB MUTEVEDZI

The notions of jurisdiction and powers of an arbitrator are closely related. These two concepts are often used together and, for the most part, interchangeably. Lawyers often say that “a tribunal acting beyond its jurisdiction has no power to act” and, “a tribunal acting outside its powers lacks jurisdiction”. While all these statements are correct, they give rise to confusion. It is, therefore, necessary to attempt to correlate the two concepts by distinguishing one from the other.

Defining jurisdiction
Black’s Law Dictionary defines jurisdiction as “the power and authority constitutionally conferred upon a court or judge to pronounce the sentence of the law, or to award the remedies provided by law, upon a state of facts.” In the context of arbitration, it entails the scope, validity and legitimacy of an arbitrator’s authority to preside over or adjudge on the dispute. In his text, Statutory Interpretation, Butterworths, London, 1997, F.A.R Bennion states that the term jurisdiction derives from Latin jus dicere (to declare the law), and a tribunal’s function of declaring the law is its distinctive attribute. The converse of jurisdiction is incompetence or impotence.

Definition of powers
Collins’ Law Dictionary defines “powers” as a legal discretion, as opposed to a duty, to carry out or refrain from carrying out an act. The opposite of powers is duties or obligations. These run cheek by jowl with an arbitrator’s powers.

Jurisdiction of an arbitral tribunal generally
Jurisdiction is antecedent to any powers that can be wielded or action that can be taken by an arbitrator. Without jurisdiction, an arbitrator has no legal basis to act. This jurisdiction is derived from the consent of the parties. Consequently, an arbitrator lacks jurisdiction in the following instances:

l In the absence of a valid arbitration agreement. For instance, a dispute arises between parties for the supply of fresh farm produce in circumstances where their agreement does not contain an arbitration clause. The dispute cannot be resolved by arbitration unless the parties subsequently conclude an ad hoc arbitration agreement.

l If the agreement to arbitrate is null and void in terms of the law to which the parties have subjected it. For example an agreement to resolve a criminal matter is invalid under section 4 (2) (c) of the Arbitration Act [Chapter 7:15].

l if the arbitrator’s appointment is invalid. For example where an arbitrator has been appointed in violation of the prescribed procedure. A good instance is where the consent of both parties is required prior to appointment and one party has not given its consent.

l if the subject matter of the dispute is not an issue which was contemplated in the arbitration agreement as the subject of a referral. For example a lease for a residential building may contain an arbitration clause for disputes concerning rent review. In such a lease, a dispute pertaining to failure to pay rent falls outside the scope of the arbitration clause.

l if an arbitrator exceeds the scope of authority conferred on him by the arbitration agreement. For instance if an arbitrator awards relief which was not requested or which he is disentitled to grant by statute, such as an order that affects a third party.

Powers of an arbitral tribunal
Purpose
The powers of an arbitral tribunal are usually conferred in relation to his functions and the procedure applicable in the arbitration. The arbitral tribunal is “master of its own procedure” and the courts have no inherent jurisdiction to direct the arbitrator on what to or what not to do unless the arbitrator acts in an unfair manner or in a fashion contrary to natural justice. In Carlisle Place v Wimpey 3 15 BLR 109 (1980) Robert Goff J stated: “However, generally speaking, an arbitrator is the master of his own procedure. The courts, in my own experience – and no authority has been cited to me otherwise – do not ordinarily attempt to control the procedure in an arbitration.” Therefore, a tribunal’s exercise of powers is subject to any limitations imposed on it by the arbitration agreement or by any mandatory requirements of statute. Since arbitration is a consensual process, an arbitrator’s powers cannot exceed the limits defined in the arbitral agreement.

Scope and limitations
The scope of an arbitrator’s powers is, for the most part, delineated by the arbitration agreement which may confer powers on the arbitrator in of the following ways:

l its express terms;

l the implied terms (particularly terms implied by the custom of a specific trade);

l terms of a professional institute or trade body adopted by the contract (for example Chartered Institute of Arbitrators Rules or Rules of the International Chamber of Commerce’s Court of Arbitration Rules); and terms incorporated into the agreement by statute.

Subject to three limitations, an arbitral tribunal is endowed with such powers as are necessary for the discharge of its mandate. These three limitations are:
l public policy;

l absence of jurisdiction over third parties; and

l non-exercise of powers reserved for the courts (for example issuance of subpoenas, committing persons to prison and fining parties).

Examples of other general limitations on a tribunal’s powers are that it cannot:

l accept inadmissible evidence;

l call its own witnesses;

l act contrary to rules of natural justice; and

l violate confidentiality of proceedings.

Sources of jurisdiction and powers

The arbitrator’s jurisdiction and powers derive from an assortment of sources. These include:

the arbitration agreement;

Statute – an Act of parliament. The Arbitration Act [Chapter 7:15] is Zimbabwe’s principal law on arbitration; Common law; and the custom of the trade – in certain trades, rules and procedures have developed over time for settlement of disputes.

l Jacob Mutevedzi is a commercial lawyer and partner at Clairwood Chambers Attorneys and writes in his personal capacity. He can be contacted @ jmutevedzi@gmail.com

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