Competence-Competence, Delegation, and the AAA/ICDR Rules

, , and | May 29, 2024 | International Commercial and Investor-State Arbitration

Below is the abstract for “Competence-Competence, Delegation, and the AAA/ICDR Rules,” forthcoming in the American Review of International Arbitration (2024) and available for download on SSRN.

In 2021 and 2022, the American Arbitration Association (AAA) and the International Centre for Dispute Resolution (ICDR) amended their arbitration rules to address a “potential controversy” said to be caused by the Restatement of the U.S. Law of International Commercial and Investor-State Arbitration. The “potential controversy” is over whether the rules providing that arbitrators have “the power to rule on [their] own jurisdiction” should be interpreted as delegation clauses—that is, as “clearly and unmistakably” delegating exclusive authority to resolve jurisdictional challenges to the arbitrators instead of the court. Most courts have so interpreted the rules.

By contrast, the Restatement interprets the rules as codifying competence-competence doctrine rather than constituting delegation clauses. Under the Restatement interpretation, the rules make clear that if a party challenges the arbitrators’ authority in arbitration, the arbitrators do not have to suspend the arbitration in order for a court to decide the challenge. But the rules do not exclude the authority of a court to decide jurisdictional challenges raised first in a court proceeding.

The 2021/2022 amendments, which added “without any need to refer such matters first to a court,” simply state what was already implicit in the rules: that the arbitrators’ authority to rule on their own jurisdiction in matters before them means the arbitrators do not “need to refer such matters first to a court.” As such, it reinforces rather than rejects the Restatement’s interpretation of the rules as codifying competence-competence doctrine rather than constituting delegation clauses.

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Christopher R. Drahozal

Associate Reporter, Restatement of the Law, The U.S. Law of International Commercial Arbitration

Chris Drahozal is an internationally known scholar whose writing focuses on the law and economics of dispute resolution, particularly arbitration. Drahozal is the author of multiple books and numerous articles on commercial arbitration. He has given presentations on the subject in Europe, Asia, Canada, and the United States, and has testified before Congress and state legislatures on arbitration matters as well. He has previously served as a Special Advisor to the Consumer Financial Protection Bureau, assisting with its study of arbitration clauses in consumer financial services contracts

George A. Bermann

Reporter, Restatement of the Law, The U.S. Law of International Commercial Arbitration

George A. Bermann is an active international arbitrator in commercial and investment disputes; co-author of the UNCITRAL Guide to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards; chair of the Global Advisory Board of the New York International Arbitration Center (NYIAC); co-editor-in-chief of the American Review of International Arbitration; and founding member of the governing body of the ICC Court of Arbitration and a member of its standing committee.

Jack J. Coe, Jr.

Associate Reporter, Restatement of the Law, The U.S. Law of International Commercial Arbitration

Jack J. Coe, Jr. is the Faculty Director of the LLM Concentration in International Commercial Arbitration at the Pepperdine School of Law. Professor Coe has chaired the Disputes Division of the ABA International Law Section, and the Academic Council of the Institute for Transnational Arbitration. Professor Coe consults with governments and multinational corporations in relation to commercial and direct investment disputes under the treaties and has both argued international arbitral claims and acted as arbitrator in ad hoc and institutional arbitrations. He is on the arbitrator panel of the International Centre for Dispute Resolution (ICDR) of the American Arbitation Association. His consultancies and arbitral appointments have involved him in a wide variety of commercial topics including production sharing agreements, mining joint-ventures, patent cross-licensings and domain name management. He has authored numerous books and articles on arbitration, private international law, and related topics.

Catherine A. Rogers

Associate Reporter, Restatement of the Law, The U.S. Law of International Commercial Arbitration

Catherine A. Rogers is a scholar of international arbitration and professional ethics at Bocconi University, with an appointment as a Research Proessor at University of California Law, San Francisco. Her scholarship focuses on the convergence of the public and private in international adjudication, the intersection of markets and regulation in guiding professional conduct, and on the reconceptualization of the attorney as a global actor. Among other appointments, she sits on the International Advisory Board of the Vienna International Arbitration Centre and the Oxford University Press Investment Claims Advisory Board. She co-chaired the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, and regularly engages in capacity-building activities to promote international dispute resolution and the rule of law in developing and emerging economies.