Competence-Competence and Separability-American Style
Chapter 8, International Arbitration and International Commercial Law: Synergy, Convergence and Evolution, 2011
22 Pages Posted: 15 Nov 2013
Date Written: 2011
Abstract
The doctrines of “separability” and “competence-competence” are often called the cornerstones of international commercial arbitration. Distinct, but very much related, these two doctrines serve, hand in glove, to maximize the effectiveness of arbitration as an efficient means of resolving international commercial disputes and to minimize the temptation and effect of delay tactics. Each of these principles arises from the autonomous nature of the arbitration agreement, even when included as a clause within a broader “container” agreement. “Competence-competence” provides an arbitral tribunal with the power to rule on its own jurisdiction, thus avoiding any need to wait for a court determination of the issue and allowing the tribunal to move expeditiously to decide the merits of the parties’ broader contract dispute. “Separability” provides that certain defects in the container agreement do not affect the arbitration agreement within it, unless those defects relate specifically to the arbitration agreement. This allows the tribunal to rule in an award on a variety of contract defenses without affecting its jurisdiction under the arbitration agreement.
Recognized in almost all modern legal regimes governing arbitration, these two doctrines are statutorily codified in most instances. However, neither doctrine is specifically mentioned anywhere in the text of the U.S. Federal Arbitration Act (“FAA”). While the basic doctrine of separability was judicially established over forty years ago by the U.S. Supreme Court, the development of any sort of “competence-competence” doctrine has been a much slower process and is only now beginning to take on an increasingly clear shape. The purpose of this article is to describe the current state of U.S. law on these two doctrines, taking particular note of the Supreme Court’s recent decision in Rent-a-Center, West, Inc. v. Jackson (Part 2), to suggest a few potential challenges presented by the nature of the Court’s current approach (Part 3), and to offer a few predictions as to how these doctrines might continue to evolve in the foreseeable future (Part 4).
Keywords: separability, competence-competence, international commercial arbitration, international commercial disputes
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