Arbitration International Arbitration Practice 2 — Questions and Answers
Question 1: What is 'kompetenz-kompetenz' (competence-competence) in international arbitration?
- The power of the arbitral tribunal to rule on its own jurisdiction (Correct answer)
- The authority of courts to supervise arbitration procedures
- The competence of expert witnesses to testify on legal matters
- The right of parties to choose arbitrators with domain expertise
Correct answer: The power of the arbitral tribunal to rule on its own jurisdiction
Kompetenz-kompetenz is the principle that an arbitral tribunal has the power to determine its own jurisdiction, including the validity and scope of the arbitration agreement.
Question 2: Under ICSID, which types of disputes are eligible for arbitration?
- Any commercial dispute between private parties
- Legal disputes arising directly from an investment between a Contracting State and a national of another Contracting State (Correct answer)
- Criminal matters involving multinational corporations
- Only disputes between states, not private investors
Correct answer: Legal disputes arising directly from an investment between a Contracting State and a national of another Contracting State
ICSID jurisdiction requires: a legal dispute, arising directly from an investment, between a Contracting State and a national of another Contracting State that has consented to ICSID.
Question 3: What is the role of an 'emergency arbitrator' under modern institutional rules?
- An emergency arbitrator replaces a regular arbitrator who becomes unavailable
- An emergency arbitrator grants urgent interim relief before the full tribunal is constituted (Correct answer)
- An emergency arbitrator presides over expedited arbitrations only
- An emergency arbitrator is appointed in cases involving public health crises
Correct answer: An emergency arbitrator grants urgent interim relief before the full tribunal is constituted
Emergency arbitrator procedures allow a party to obtain urgent interim measures before the full tribunal is constituted, addressing time-sensitive situations.
Question 4: What is 'most favored nation' (MFN) treatment in the context of investment treaty arbitration?
- A tax benefit for foreign investors in developing nations
- A treaty provision allowing an investor to claim better treatment available to investors from third countries (Correct answer)
- A preference given to domestic investors over foreign investors
- A clause granting investors the right to choose the arbitration seat
Correct answer: A treaty provision allowing an investor to claim better treatment available to investors from third countries
MFN clauses in investment treaties allow investors to invoke more favorable treatment that the host state accords to investors of third countries, including potentially better dispute resolution provisions.
Question 5: What does 'fork-in-the-road' mean in investment treaty arbitration?
- The investor's choice between different arbitral institutions
- A treaty provision requiring an investor to elect between domestic courts and international arbitration, barring a subsequent change (Correct answer)
- A mechanism for splitting large disputes into smaller ones
- The option for a state to terminate an investment treaty
Correct answer: A treaty provision requiring an investor to elect between domestic courts and international arbitration, barring a subsequent change
A fork-in-the-road clause requires the investor to choose between submitting the dispute to domestic courts or international arbitration, with the choice being final and exclusive.
Question 6: What is 'consolidation' of arbitral proceedings?
- Merging multiple related arbitrations into a single proceeding (Correct answer)
- Combining an arbitration with a court proceeding
- Reducing the number of arbitrators from three to one
- Filing the same claim in multiple jurisdictions
Correct answer: Merging multiple related arbitrations into a single proceeding
Consolidation allows related arbitrations—often involving the same parties, contracts, or legal issues—to be joined into a single proceeding to avoid inconsistent outcomes and reduce costs.
Arbitration International Arbitration Practice 2
What is 'kompetenz-kompetenz' (competence-competence) in international arbitration?