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ASA Bulletin

Association Suisse de l’ArbitrageSchweiz. Vereinigung für SchiedsgerichtsbarkeitAssociazione Svizzera per l’Arbitrato Swiss Arbitration Association

Volume 34, No. 4, 2016

Founder: Prof. Pierre LaliveEditor: Matthias Scherer

Contents Volume 34, No. 4/2016 ASA

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ASA Bulletin

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President’s Message, No Solomon Please, We’re Arbitrators

Articles

Catherine A. KUNZ, Enforcement of Arbitral Awards under the New York Convention in Switzerland – An overview of the current practice and case law of the Swiss Supreme Court

Hilmar RAESCHKE-KESSLER, The Arbitrator nominated by an InsolvencyReceiver or Liquidator and Conflicts of Interest

Nadia SMAHI, The Arbitrator’s Liability and Immunity Under Swiss Law – Part I

Mladen STOJILJKOVIĆ, Arbitral Jurisdiction and Court Review: Three Swiss Federal Supreme Court Decisions to Reconsider

Werner WENGER, Polyvalente Schieds(gutachtens)klauseln – Anmerkungen zuBGE 142 III 220

Swiss Federal Supreme Court

o 4A_510/2015 of 8 March 2016 [Alleged leak within the Arbitral Tribunal]

o 4A_598/2014 of 14 January 2015 [Arbitrator’s past work against a company whose director was a party in the arbitration]

o 4A_422/2015 (142 III 284) of 16 March 2016 [Cost decision annulled for tribunal’s failure to hear parties]

o 4A_42/2016 of 3 May 2016 [Right to be heard – Equal treatment]

o 4A_84/2015 (142 III 239) of 18 February 2016 [Separability – Arbitration agreement valid even though the framework contract containing it was never signed]

o 4A_628/2015 (142 III 296) of 16 March 2016 [Multi-tier arbitration clause – Failure to conduct pre-arbitral mediation – Award set aside]

o 5A_409/2014 of 15 September 2014 [New York Convention – Proper notice of the arbitration – Pactum de quota litis is not contrary to Swiss substantive public policy]

o 5A_672/2015 of 2 September 2016 [Enforcement of a decision rendered by the Court of First Instance of the Dubai International Financial Centre (DIFC) in Switzerland]

ASA News/Bibliography

1010- 9153( 20161124) 34: 4; 1- K1010- 9153( 20161124) 34: 4; 1- K

ASA BULLETIN Founder: Professor Pierre LALIVE

Editor: Matthias SCHERER

Published by:

Kluwer Law International

PO Box 316

2400 AH Alphen aan den Rijn

The Netherlands

e-mail: [email protected]

Aims & Scope

Switzerland is generally regarded as one of the World’s leading place for arbitration

proceedings. The membership of the Swiss Arbitration Association (ASA) is graced

by many of the world’s best-known arbitration practitioners. The Statistical Report of

the International Chamber of Commerce (ICC) has repeatedly ranked Switzerland

first for place of arbitration, origin of arbitrators and applicable law.

The ASA Bulletin is the official quarterly journal of this prestigious association.

Since its inception in 1983 the Bulletin has carved a unique niche with its focus on

arbitration case law and practice worldwide as well as its judicious selection of

scholarly and practical writing in the field. Its regular contents include:

– Articles

– Leading cases of the Swiss Federal Supreme Court

– Leading cases of other Swiss Courts

– Selected landmark cases from foreign jurisdictions worldwide

– Arbitral awards and orders under various auspices including ICC, ICSID

and the Swiss Chambers of Commerce (“Swiss Rules”)

– Notices of publications and reviews

Each case and article is usually published in its original language with a

comprehensive head note in English, French and German.

Books and journals for Review

Books related to the topics discussed in the Bulletin may be sent for review to the

Editor (Matthias Scherer, LALIVE, P.O.Box 6569, 1211 Geneva 6, Switzerland).

ASA Association Suisse de l’Arbitrage/Schweizerische Vereinigung für Schiedsgerichts-barkeit/Associazione Svizzera per l’Arbitrato/Swiss Arbitration Association

PRÉSIDENT CHAIRMAN Elliott Geisinger, Geneva

VICE-PRESIDENTS VICE PRESIDENTS

Dr Bernhard Berger, Berne – Dr Bernhard F. Meyer, Zurich

MEMBRES MEMBERS Domitille Baizeau, Geneva – Felix Dasser, Zurich – Isabelle Hautot, Paris –

Michael Hwang, Singapore – François Kaiser, Lausanne – Pierre Mayer, Paris – Andrea Meier, Zurich – Christoph Müller, Neuchâtel –

Gabrielle Nater-Bass, Zurich – Christian Oetiker, Basel – William W. Park, Boston – Constantine Partasides, London –

Paolo Michele Patocchi, Geneva – Henry Peter, Lugano – Wolfgang Peter, Geneva – Klaus Sachs, Munich –

Michael E. Schneider, Geneva – Franz T. Schwarz, London – Anke Sessler, Munich – Frank Spoorenberg, Geneva –

Pierre Tercier, Fribourg – Nathalie Voser, Zurich

PRÉSIDENTS D’HONNEUR HONORARY PRESIDENTS Dr Marc Blessing, Zurich –

Dr Pierre A. Karrer, Zurich – Prof. Dr Gabrielle Kaufmann-Kohler, Geneva – Michael E. Schneider, Geneva – Dr Markus Wirth, Zurich

VICE-PRÉSIDENT D’HONNEUR HONORARY VICE-PRESIDENT

Prof. François Knoepfler, Cortaillod

DIRECTEUR EXÉCUTIF EXECUTIVE DIRECTOR Alexander McLin, Geneva

ASA Secretariat 4, Boulevard du Théâtre, P.O.Box 5429, CH-1204 Geneva,

Tel.: ++41 22 310 74 30, Fax: ++41 22 310 37 31; [email protected], www.arbitration-ch.org

ASA Bulletin December 2016 No 4

FONDATEUR DU BULLETIN ASA FOUNDER OF THE ASA BULLETIN

Prof. Pierre Lalive

CONSEIL DE DIRECTION ADVISORY BOARD

Prof. Piero Bernardini – Dr Matthieu de Boisséson – Prof. Dr Franz Kellerhals – Prof. François Knoepfler – Prof. François Perret – Dr Philippe Schweizer –

Prof. Pierre Tercier – V.V. Veeder QC. – Dr Werner Wenger

COMITE DE REDACTION EDITORIAL BOARD

Rédacteur/Editor Matthias Scherer

Dr Philipp Habegger – Dr Cesare Jermini – Dr Bernhard Berger – Catherine A. Kunz

SECRETAIRE DE REDACTION EDITORIAL SECRETARY

Angelika Kolb-Fichtler

CORRESPONDANCE CORRESPONDENCE

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Aims & ScopeSwitzerland is generally regarded as one of the World’s leading place for arbitration proceedings. The membership of the Swiss Arbitration Association (ASA) is graced by many of the world’s best-known arbitration practitioners. The Statistical Report of the International Chamber of Commerce (ICC) has repeatedly ranked Switzerland � rst for place of arbitration, origin of arbitrators and applicable law.

The ASA Bulletin is the of� cial quarterly journal of this prestigious association. Since its inception in 1983 the Bulletin has carved a unique niche with its focus on arbitration case law and practice worldwide as well as its judicious selection of scholarly and practical writing in the � eld. Its regular contents include:

– Articles– Leading cases of the Swiss Federal Supreme Court– Leading cases of other Swiss Courts– Selected landmark cases from foreign jurisdictions worldwide– Arbitral awards and orders under various auspices including ICC, ICSID and the

Swiss Chambers of Commerce (“Swiss Rules”)– Notices of publications and reviews

Each case and article is usually published in its original language with a comprehensive head note in English, French and German.

Books and Journals for ReviewBooks related to the topics discussed in the Bulletin may be sent for review to the Editor (Matthias SCHERER, LALIVE, P.O.Box 6569, 1211 Geneva 6, Switzerland).

34 ASA BULLETIN 4/2016 (DECEMBER) 897

Arbitral Jurisdiction and Court Review: Three Swiss Federal Supreme Court Decisions

to Reconsider MLADEN STOJILJKOVIĆ*

I. Introduction This article discusses three recent decisions by the Swiss Federal

Supreme Court (the “Court”) on issues related to arbitral jurisdiction. These decisions do not deal with arbitral jurisdiction directly, but rather with the questions of when and to what extent courts can review the jurisdictional decisions of arbitral tribunals. Such questions can be rather complex. For too often the applicable rules are vague, ambiguous, or unclear and the policy reasons underlying the rules are not easily accessible. But their understanding is essential to the proper allocation of decision making powers between courts and arbitral tribunals on issues of arbitral jurisdiction. The purpose of this article is to shed light on some of these rules and policy reasons and on how the Court has failed to properly consider and apply them in its case law.

II. The Agreement to Arbitrate – an Unreviewable Finding of Fact? (BGE 142 III 2391) Two non-Swiss companies – X and Z – negotiated a (frame) contract

and exchanged several drafts by e-mail. The first version of the draft prepared by Z contained a clause providing for arbitration in Lugano under the Swiss Rules of International Arbitration. That version was modified by X to provide for arbitration in Paris and for “ICC France”. But Z insisted that the arbitration be in Lugano, as originally proposed. Further drafts were exchanged and other clauses were modified but the arbitration clause stayed the same (Lugano, Swiss Rules). Assuming that the parties had a final version of the draft, Z asked X to return an executed version, to which X responded that its legal department would need to review the document. No further drafts were exchanged. The contract was never signed.

Z initiated arbitration based on the arbitration clause in the latest version of the draft contract. The Swiss Chambers’ Arbitration Institution

* Dr. iur., LL.M.; Associate at Homburger AG, Zurich. 1 BGE 142 III 239, ASA Bull. 4/2016, p. 967 (4A_84/2015).

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898 34 ASA BULLETIN 4/2016 (DECEMBER)

appointed a sole arbitrator. X objected to the sole arbitrator’s jurisdiction. The sole arbitrator issued an interim award finding that the parties had expressed a true and common intent to arbitrate in Lugano under the Swiss Rules of International Arbitration. Z challenged the sole arbitrator’s decision before the Court, which confirmed the sole arbitrator’s decision.

In line with established case law, the Court explained that under Swiss law, the interpretation of arbitration agreements, including the issue of whether they were formed, follows the general rules of contract interpretation.2 Thus, the Court went on, the arbitrator first has to determine whether, based on the evidence before him, the parties had a true and common intent to arbitrate (subjective interpretation).3 Only if the arbitrator is unable to find a true and common intent to arbitrate, he may proceed to an objective interpretation of the parties’ respective declarations of intent in accordance with the principle of good faith. In determining the parties true intent, the arbitrator may consider all relevant circumstances and any evidence available that may help him determine the parties’ true and common intent, including the parties’ correspondence before the alleged conclusion of the contract, the parties’ conduct before and after the alleged conclusion of the contract, etc.4 If he is convinced that there was a true and common intent to arbitrate, he makes a finding of fact, which – like the arbitrator’s findings of fact in general – will not be subject to any Court review.5

The Court noted that the dispute at issue between the parties concerned the very existence of an arbitration agreement.6 Applying the above principles, the Court concluded that the sole arbitrator’s finding that the parties shared a true and common intent to arbitrate constituted a finding of fact that the Court, in accordance with its case law, is unable to review.7

This case is noteworthy, not so much for the fact that an arbitration clause was found to be valid and enforceable even though the underlying contract had never been signed – arbitration agreements, after all, need not necessarily be signed, and whether the parties in this case had agreed to arbitrate is a variant of the familiar “offer and acceptance” problem in contract law. A much more intriguing element of this decision is that the Court considered itself bound by the sole arbitrator’s finding that the parties had concluded a substantively valid agreement to arbitrate.

2 BGE 142 III 239, ASA Bull. 4/2016, p. 967 (4A_84/2015), c. 5.2.1. 3 Id. 4 Id. 5 Id. 6 BGE 142 III 239, ASA Bull. 4/2016, p. 967 (4A_84/2015), c. 5.2. 7 BGE 142 III 239, ASA Bull. 4/2016, p. 967 (4A_84/2015), c. 5.2.2.

M. STOJILJKOVIĆ, ARBITRAL JURISDICTION AND COURT REVIEW: THREE SWISS FEDERAL SUPREME COURT DECISIONS TO RECONSIDER


It bears noting that the Court has repeatedly decided in recent years that it considers itself bound by an arbitral tribunal’s finding of an agreement to arbitrate (or not to arbitrate) where such a finding is made based on a subjective interpretation.8 But no case so far illustrates the problem as well as this one. Here, the issue was one of contract formation (not merely one of the arbitration clause’s objective scope), and it was one in which the arbitrator found he had jurisdiction (rather than rejecting jurisdiction). Thus, this case goes to the very foundation of the arbitration process, namely to the question whether the two parties validly agreed “to arbitrate anything at all.”9

The problem of such case law is that an arbitrator can make a final and unreviewable determination on his own jurisdiction – without any authorization from the parties to do so. The Court’s refusal to review the arbitrator’s decision amounts to giving arbitrators an absolute competence-competence, even without party agreement – which is fundamentally at odds with the Swiss legal order. Under Swiss law, arbitrators have only relative competence-competence,10 as their arbitral awards necessarily are subject to court review.11 The availability of court review is essential to determining whether the parties validly waived their right to access to the courts,12 a right

8 See, e.g., Decision 4A_390/2014, ASA Bull. 3/2016, p. 641, c. 3.6 (according to the Court,

the arbitral tribunal had determined a true and common intent that the parties did not want to submit disputes under a “Debt Transfer Agreement” to the same tribunal as for the “A. Contract;” the Court considered itself bound by the tribunal's determination of the objective scope of the arbitration agreement); Decision 4A_305/2013, ASA Bull. 3/2015, p. 558, (according to the Court, the arbitral tribunal had determined a true and common intent to terminate the arbitration agreement, which was a finding of fact unreviewable by the Court).

9 ALAN SCOTT RAU, Arbitral Jurisdiction and the Dimensions of “Consent,” 24(2) Arbitration International (2008), 199-264, 204.

10 See Art. 186(1) Swiss Private International Law Act (PILA) of December 18, 1987 (SR 291); Art. 359 Swiss Code of Civil Procedure (CCP) of December 19, 2008 (SR 272).

11 See BERNHARD BERGER/FRANZ KELLERHALS, International and Domestic Arbitration in Switzerland, 3rd Ed. Berne 2015, N 669; BSK IPRG-SCHOTT/COURVOISIER, Art. 186 N 3; MANUEL LIATOWITSCH, Schweizer Schiedsgerichte und Parallelverfahren vor Staatsgerichten im In- und Ausland, Schriftenreihe für internationales Recht, Volume 98, Basel/Geneva/Munich 2002, 32-34; MLADEN STOJILJKOVIĆ, Die Kontrolle der schiedsgerichtlichen Zuständigkeit, Diss., Zurich 2014, 24.

12 ULRICH HAAS, Die gerichtliche Kontrolle der schiedsgerichtlichen Entscheidungszuständigkeit, in: Ludwig Bittner/Thomas Klicka/Georg E. Kodek/Paul Oberhammer (eds.), Festschrift für Walter H. Rechberger zum 60. Geburtstag, Vienna 2005, 187-219, 187; BK ZPO-PFISTERER, Art. 359 N 8. See also ALAN SCOTT RAU, Arbitral Jurisdiction and the Dimensions of “Consent,” 24(2) Arbitration International (2008), 199-264, 206; GEORGE A. BERMANN, The “Gateway” Problem, 37 Yale Journal of International Law (2012), 1-50, 3; WILLIAM W. PARK, The Arbitrator’s Jurisdiction to

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guaranteed by the Swiss Constitution and the European Convention of Human Rights.13 In the words of the Court, “[i]t goes without saying that there is also a need to prevent arbitrators from usurping competences, thereby imposing on the parties a waiver of the jurisdiction of the state courts."14

To be sure, the question whether an arbitration agreement exists is not the only requirement that needs to be fulfilled for the arbitrator to have jurisdiction – the arbitration agreement also needs to be formally valid and the claim that is made must be arbitrable. But even though formal validity and arbitrability are issues of law and, as such, subject to full review, these two elements pose no high threshold to overcome,15 nor do they address the question of the parties’ consent. The Court’s reviewing only formal validity and arbitrability is insufficient. The availability of meaningful court review for issues of arbitral jurisdiction is essential.

Swiss law allows only non-Swiss parties to waive court review of arbitral awards (including for lack of jurisdiction) and – more important – only if they enter into an express agreement to that effect.16 But the Court in this case excluded court review for the substantive validity of the arbitration agreement, not on the basis of an agreement by the parties, but on the sole basis that the arbitrator found that the parties had a true and common intent to arbitrate.

There is no convincing reason, I submit, for why an arbitrator’s decision on jurisdiction should be reviewable by the Court only if the arbitrator reaches his conclusion by way of an objective interpretation of the arbitration agreement, but should be unreviewable where the arbitrator’s conclusion is based on a subjective interpretation. If the parties need protection, to use the Court’s words, “from arbitrators usurping competences,” they need such protection regardless of how the arbitrator frames his conclusion. The Court’s ability to review with unfettered powers of review whether the parties agreed to arbitrate is meaningless if the arbitrator can preempt such a review simply by finding that, in his view, the existence of an agreement to arbitrate was established as a fact.

Determine Jurisdiction, in: Albert Jan van den Berg (ed.), International Arbitration 2006: Back to Basics?, Alphen aan den Rijn 2007, 55, 90.

13 Art. 29a of the Federal Constitution of the Swiss Confederation of April 18, 1999; Art. 6(1) European Convention of Human Rights and Fundamental Freedoms of November 4, 1950.

14 BGE 117 II 94 c. 5a (as translated in BERNHARD BERGER/FRANZ KELLERHALS, International and Domestic Arbitration in Switzerland, 3rd Ed., Berne 2015, N 1722).

15 See, e.g., BERNHARD BERGER/FRANZ KELLERHALS, International and Domestic Arbitration in Switzerland, 3rd Ed., Berne 2015, N 416-435 (form) and N 207-261 (arbitrability).

16 Art. 192 PILA; BSK IPRG-PATOCCHI/JERMINI, Art. 192 N 25.



The Court’s willingness to defer to the arbitrator’s decision on the existence of an arbitration agreement, as long as it is labeled a finding of fact, is also inconsistent with the Court’s otherwise strict approach to issues of consent. It is a well established principle that the consent to arbitrate should be clear and unequivocal and, generally, not be assumed lightly.17 There is no reason why this principle should be inapplicable in connection with an arbitrator’s finding of a true and common intent to arbitrate.

The only court in Switzerland that can review the jurisdictional decision of a Swiss seated arbitral tribunal is the Court. A Swiss enforcement court cannot examine whether a Swiss seated arbitral tribunal had jurisdiction to decide.18 So if the Court declines to review the award for lack of an agreement to arbitrate, the arbitrators will have had, not only the first word on their jurisdiction, but also the last. The situation is not much better where the award is to be enforced abroad. Even though the courts at the place of enforcement will be able to review de novo whether the parties validly agreed to arbitrate within the meaning of Art. V(1)(a) of the New York Convention, this is hardly sufficient to remedy the lack of review by the Swiss courts. If an award suffers from a fundamental defect such as lack of arbitral jurisdiction, it should not only be refused enforcement, it should also be capable of annulment at the arbitral seat. It is difficult to see why the Court should have less extensive powers of review than courts at the place of enforcement.19

In short, this case law needs to be reconsidered. The Court ought to be able to review arbitral awards for lack of jurisdiction, regardless of whether the arbitrator found a subjective or an objective intent to arbitrate.

The problem can be resolved with a minor, but important, adjustment of the Court’s case law. While it is correct that the Court is in principle bound by an arbitrator’s findings of fact, that rule has two generally recognized exceptions. As the Court has repeatedly held, the arbitral tribunal is not bound by the arbitrator’s findings of fact if such findings are made in violation of a ground for annulment (the other exception, which is of no interest here, is where a party submits admissible new evidence). The law expressly provides that an arbitral award can be annulled if the arbitrator “wrongly accepted or declined jurisdiction.” Doubtless, the arbitrator can be

17 See BGE 140 III 367, ASA Bull. 3/2014, p. 530 (4A_560/2013), c. 2.2.2; BGE 138 III 29,

ASA Bull. 1/2012, p. 157 (4A_246/2011), c. 2.2.3; BGE 132 III 626 c. 3.1. 18 This is true only for awards that were not subject to annulment as a result of a waiver in

accordance with Art. 192(1) PILA. 19 BERNHARD BERGER/FRANZ KELLERHALS, International and Domestic Arbitration in

Switzerland, 3rd Ed., Berne 2015, N 1725.

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wrong when finding that the parties agreed to arbitrate, irrespective of whether he came to this conclusion by subjective or objective interpretation. The distinction between subjective intent and objective intent should be irrelevant for the purposes of court review of arbitral jurisdiction. The rule –that the Court is not bound by the arbitrator’s findings of fact if such findings are made in violation of a ground for annulment – should apply with equal force also to jurisdiction.

Put differently, there is a clear conflict between the Court’s being bound by the arbitral tribunal’s findings of fact (Art. 105(1) BGG), and the parties’ right to have the Court review arbitral awards for lack of jurisdiction (Art. 190(2)(b) PILA and Art. 393(b) CCP). Where the two conflict—that is where the existence of an agreement to arbitrate was determined as a finding of fact—the parties’ right to court review should prevail.

III. Pre-Conditions to Arbitration – a Reviewable Question of Jurisdiction? (BGE 142 III 29620) Two parties – X and Y – entered into two contracts. The dispute

resolution clause provided that disputes were to be resolved way of conciliation under the ADR Rules of the ICC. Any dispute not resolved by way of conciliation was to be submitted to ad hoc arbitration in Geneva under the UNCITRAL Arbitration Rules.

A dispute arose and Y filed a request for conciliation with the ICC. A conciliator was appointed and, over several weeks, the parties discussed when a first conference call should take place and whether or not counsel should attend. Before these organizational questions were resolved, Y filed a request for arbitration and informed the conciliator that the conciliation had failed due to X’s conduct and that, accordingly, it would discontinue the conciliation. The conciliator later informed the ADR Center that she interpreted Y’s conduct to be a withdrawal of its request for conciliation, an understanding that the ADR Center shared.

X objected to the arbitral tribunal’s jurisdiction on the ground that Y had failed to fulfill a pre-condition to arbitration. The arbitral tribunal decided that it had jurisdiction to hear the case and that the claim was admissible. X challenged the arbitral tribunal’s decision to accept jurisdiction before the Court, which accepted the challenge and decided in favor of X. The Court explained that to decline jurisdiction and thus end the proceedings would be uneconomical, given that the parties would then need to appoint a

20 4A_628/2015 of 16 March 2016, ASA Bull. 4/2016, p. 988.



new tribunal, which adds costs and may create problems with the statute of limitations. A stay of the proceedings was more appropriate. The Court thus annulled the arbitral decision on jurisdiction and ordered a stay of the arbitration until completion of the conciliation proceedings.

A stay of the arbitration until the conciliation requirement is fulfilled may be the preferred way to deal with multi-tiered dispute resolution clauses providing for a mandatory first tier.21 But the Court achieved that result in a manner that is doctrinally questionable and contrary to the policy reasons for court review.

The primary issue in this case was whether the objection to arbitration was “jurisdictional” within the meaning of Art. 190(2)(b) PILA and thus subject to Court review. A further issue was whether the Court, having determined (i) that the objection could be heard and (ii) that the arbitral tribunal lacked jurisdiction, can order the arbitral tribunal to stay the arbitration.

The Court did not spend much time on the first issue. In fact, the Court conceded that the issue it was asked to review was not subject to any ground for annulment – not even Art. 190(2)(b) PILA, which the Court applied only “by default.” But it reviewed the issue anyway. It considered review to be available on the sole basis that violations of contractual mechanisms that are pre-conditions to arbitration “need to be sanctioned."22 And since it does not fall under any other ground for annulment, the Court is considering it under Art. 190(2)(b) PILA. These were the only reasons the Court gave for accepting the challenge.

The Court’s reasoning is not convincing. To begin with, it contains a logical leap. The violation of a contractual mechanism – even one that is a pre-condition to arbitration – may be indeed worthy of a sanction; but this is primarily a question for the arbitral tribunal to decide and it does not automatically follow that Court review of the arbitral tribunal’s decision is necessarily available.23 One would have expected the Court to provide

21 See also CHRISTOPHER BOOG/JAMES MENZ, Failure to comply with mandatory prearbitral

tier can result in stay of arbitration, in: Digitaler Rechtsprechungs-Kommentar (dRSK), April 29, 2016, N 22 (“pragmatic reasons”); CÉLIAN HIRSCH, Le non-respect d’une méthode ADR avant la procedure d’arbitrage, in: dRSK, published on April 19, 2016, N 10 (“pragmatique”).

22 BGE 142 III 296, ASA Bull. 4/2016, p. 988, c. 2.2 (“elle doit néanmoins être sanctionnée d’une façon ou d’une autre”).

23 But see ANNE-VÉRONIQUE SCHLAEPFER, Jurisdiction and Admissibility: a Subtle Distinction, Not Always Easy to Make in International Arbitration, Les Cahiers de L’Arbitrage 2014, 327-336, 330 (stating that “the Court considered that a challenge based on a breach of a mandatory preliminary mechanism is of sufficient importance to justify judicial review.”).

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reasons for why that particular issue was subject to, or even worthy of, court review. But such reasons are entirely absent from the decision. Given that the Court accepted to review the challenge despite the fact that no ground for annulment was applicable, one wonders whether the Court here was applying the law or rather making the law.

It would have been desirable for the Court to address the question whether the objection to arbitration was “jurisdictional” within the sense of Art. 190(2)(b) PILA. In the absence of a generally recognized definition of arbitral jurisdiction, the Court could have considered the meaning of this term as well as the reason for which courts review decisions on arbitral jurisdiction to begin with. Court review of decisions on jurisdiction is available to make sure that the parties validly agreed to resolve their dispute by arbitration and to waive their right to access to the courts.24 In line with this purpose, courts legitimately review the existence and the validity of the parties’ arbitration agreement. But the case for court review is much weaker where the issue is not whether the parties agreed to arbitrate in the first place, but something else, such as whether the claim was premature and therefore procedurally inadmissible when asserted.25

It has been suggested that an objection to arbitration should be qualified as “jurisdictional” if it is directed at the forum (i.e. the dispute cannot be decided by this tribunal, but it can in some other forum) and non-jurisdictional if it is directed at the claim (i.e. the claim is barred in whatever forum).26 Applying this theory would mean that where the “success of the objection does not necessarily negate consent to the forum,” there is no question of

24 Supra, Fn. 12. 25 It would be even less an issue of jurisdiction if it were to be qualified, not as procedural,

but rather a substantive contract claim, something that the Court does not exclude. 26 See JAN PAULSSON, Jurisdiction and Admissibility, in: Gerald Aksen et al. (eds.), Global

Reflections on International Law, Commerce & Dispute Resolution: Liber Amicorum in Honour of Robert Briner, Paris 2005, 601, 617 (“[If] the claim could not be brought to the particular forum seized, the issue is ordinarily one of jurisdiction and subject to further recourse. If the reason would be that the claim should not be heard at all (or at least not yet), the issue is ordinarily one of admissibility”); ANNE-VÉRONIQUE SCHLAEPFER, Jurisdiction and Admissibility: a Subtle Distinction, Not Always Easy to Make in International Arbitration, Les Cahiers de L’Arbitrage 2014, 327-336, 333 (“the arbitral tribunal’s jurisdiction may only be challenged in favor of another body, tribunal, or court”); VEIJO HEISKANEN, Ménage à trois? Jurisdiction, Admissibility and Competence in Investment Treaty Arbitration, ICSID Review 2013, 1-16, 7 (“jurisdiction is about the scope of the tribunal’s authority […], admissibility is about the particular claim raised by the claimant”).



jurisdiction, and the arbitrators’ decision should be unreviewable.27 This is convincing and in line with the purpose of court review.

But the Court in this case did not distinguish between agreed procedural bars to arbitration, and temporal limitations on the very consent to arbitrate. While both may have the same effect of preventing the arbitration from going forward, only the former raises genuine issues of jurisdiction that merit court review.

Instead of distinguishing issues of jurisdiction (which are reviewable) and non-jurisdictional objections to arbitration (which are unreviewable), the Court seems to accept that any and all violations of contractual mechanisms that are pre-conditions to arbitration are subject to review.28 While this is certainly not logically impossible, the question is whether it is doctrinally coherent and desirable as a matter of policy.

Assuming for now that court review was available, the next issue in this case was whether the Court was correct in directly ordering that the arbitration be stayed. The Court explained that it had the power to do so because the power to annul an award included the power to stay the proceedings. But this is not convincing. There is no provision authorizing the Court, when deciding on challenges of arbitral awards for lack of jurisdiction, to order that the arbitration proceedings be stayed. A decision to stay is not among the instruments available to either the Court or the arbitral tribunal to “decide” an objection to jurisdiction. The answer to an objection to jurisdiction ought to be only, yes, there is jurisdiction or, no, there is no jurisdiction.29 By contrast, a decision to stay the proceedings is an act of

27 JAN PAULSSON, The Idea of Arbitration, Oxford 2013, 82-90. 28 The term “jurisdiction ratione temporis” is often invoked in connection with multi-tiered

dispute resolution clauses as if it had a pre-existing meaning; however, “to label is not the same thing as to justify” (ALAN SCOTT RAU/ANDREA K. BJORKLUND, BG Group and “Conditions” to Arbitral Jurisdiction, 43 Pepperdine Law Review (2016), 102-160, 113). The issue is whether the label should be used only for temporal limitations on the very consent to arbitrate, or also to agreed procedural bars to bring the claim. The latter case does not raise genuine issues of jurisdiction in the sense that, if the arbitral tribunal has no jurisdiction, the claim can be brought in court.

29 The Court has qualified the issue whether the arbitral tribunal has complied with applicable lis pendens provisions as “jurisdictional” (most prominently in the so-called “Fomento case:” BGE 127 III 279 c. 2d). Such a qualification is unconvincing and should be reconsidered. See SÉBASTIEN BESSON, The Relationship between Court and Arbitral Jurisdiction: the Impact of the new Art. 186 (1bis) PILS,” in: Christoph Müller (ed.), New Developments in International Commercial Arbitration, Zurich 2007, 57-78, 74; JEAN-FRANÇOIS POUDRET/SÉBASTIEN BESSON, Comparative Law of International Arbitration, 2nd Ed., Zurich 2007, N 730; MLADEN STOJILJKOVIĆ, Die Kontrolle der schiedsgerichtlichen Zuständigkeit, Diss., Zurich 2014, 156.

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delay – it avoids a decision on jurisdiction – but it cannot, in itself, be “the decision” on jurisdiction. What is more, it is inconsistent to decide, like the Court did, that the arbitral tribunal lacks jurisdiction and, at the same time, order that the proceedings be suspended. The decision that the tribunal lacks jurisdiction ends the arbitration, leaving nothing to be suspended.

One also wonders how the Court will approach multi-tiered dispute resolution clauses with a mandatory first tier in the future. Now that the Court has held that arbitral tribunals should stay their proceedings, the question is whether the Court would be more willing to review arbitral decisions to stay (or not to stay) the arbitration, which traditionally it has been very reluctant to do.30 The Court has been willing to review orders to stay the proceedings only if, in ordering a stay, the arbitral tribunal expressly or impliedly decided on its jurisdiction.31 It is questionable whether stay decisions can be equated to decisions affirming or denying jurisdiction (unless the arbitral tribunal gives such decisions an incorrect label, which is a different issue entirely) – after all, the arbitral tribunal can decide to defer the issue to the final award, and one would not expect that this decision would be subject to immediate challenge for being an implied decision on jurisdiction. In any event, in light of the case at hand, one would expect parties to increasingly attempt to challenge decisions to stay (or not to stay) the arbitration, as long as the decision has some connection with a multi-tiered dispute resolution clause.32 One would also expect the Court to accept to hear such challenges against stay decisions given that the issue before the Court then would be whether the violation of a pre-arbitral conciliation requirement was properly sanctioned.

It is further doubtful whether the Court should, as a matter of policy, be able to review objections to arbitration that are not “jurisdictional” in the sense that they implicate the parties’ waiver of access to the courts. In such cases, the parties need no protection from arbitrators imposing such waivers on them. More appropriately, the objection to arbitration in such cases should be qualified as a defense to the claim (whether substantive or procedural). And, as such, it should belong to the “realms of interpretation and appreciation of context and commercial reality – questions that arbitrators are particularly well placed to answer and which are routinely entrusted to them."33 Mistakenly classifying an agreed procedural bar to arbitration as an issue of jurisdiction results in an unjustified extension of the scope for

30 BSK IPRG-WIRTH, Art. 188 N 28. 31 Id. 32 See, most recently, Decision 4A_555/2016, October 10, 2016. 33 ALAN SCOTT RAU/ANDREA K. BJORKLUND, BG Group and “Conditions” to Arbitral

Jurisdiction, 43 Pepperdine Law Review (2016), 102-160, 118.



challenging the award, and frustrates the parties’ expectation that their disputes would be resolved by their chosen tribunal.34

Finally, one may also question whether making Court review available is more efficient than leaving the issue for the arbitral tribunal to decide. Although the Court compares the various ways in which arbitral tribunals can react to violations of pre-arbitral conciliation requirements, it does not consider in the equation the time and cost of adding Court review. Staying the arbitration, rather than ending it with an award declining jurisdiction, may save the cost of having to constitute another tribunal; but at least some (if not all) of the savings may be spent on Court review. The point is, while there is little debate about the desirability of the outcome, namely that the arbitration should be suspended, there is a fundamental difference between the arbitrators’ determining the need for that suspension, and the Court’s doing so.

We return to the original issue of whether the Court should have accepted to review the challenge as “jurisdictional” in the first place. The answer to this question is no, with the following reservation: Every objection to arbitration can theoretically be framed so as to implicate the parties’ consent to arbitrate the dispute and, accordingly, their waiver of the right of access to the courts. It may well be the case, for example, that a failure to fulfill the pre-arbitral conciliation requirement was meant to operate as a kind of a self-detonating device, extinguishing the arbitration agreement altogether (or suspending its effectiveness). The question is, was this what the parties intended? In the absence of clear evidence of such an intent, it should not be presumed that the parties intended a pre-arbitral conciliation requirement to be jurisdictional in the sense just described. After all, the conciliation requirement, as such, presumably has nothing to do with why the parties wanted to step out of the court system and submit their disputes to arbitration.

In summary, the Court’s task is not to determine whether the pre-arbitral conciliation or mediation requirement was mandatory, whether the parties were sufficiently engaged, etc. Its only task is to determine whether it was the parties’ intent that a failure to fulfill the requirement would negate their consent to arbitrate so that their dispute should be heard by the courts and not by an arbitral tribunal. Once the Court has decided whether or not the issue is in this sense “jurisdictional,” its task should be complete.

34 JAN PAULSSON, Jurisdiction and Admissibility, in: Gerald Aksen et al. (eds.), Global

Reflections on International Law, Commerce & Dispute Resolution: Liber Amicorum in Honour of Robert Briner, Paris 2005, 601.

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IV. Who Has the First Word on Arbitral Jurisdiction – Courts or Arbitrators? (BGE 140 III 36735) Five Swiss parties – A, B, C, D, and E – entered into a consortium

agreement, which contained the following dispute resolution clause (translated from the German original):

“The present contract is governed exclusively by Swiss law. The courts of Meilen have jurisdiction. Disputes among shareholders about the present contract, or construction contracts that the consortium concludes with the partners, are resolved if possible by arbitration to the exclusion of state courts. Parties who have a dispute shall within a month agree on a sole arbitrator or an arbitral tribunal. Only if such an agreement is impossible or if the decision of the arbitral tribunal is not accepted, the parties may seize the state courts.”

A dispute arose and A sued B, C, D, and E for damages in the District Court of Meilen, in the Canton of Zurich. The four respondents objected to the court’s jurisdiction on the basis that the parties had agreed to arbitrate. The Meilen court declined jurisdiction. A appealed to the High Court of Zurich, which rejected the appeal. A finally appealed to the Swiss Federal Supreme Court, which – as we will see – agreed with A, saying that the lower courts were wrong to decline jurisdiction, and remanded the case.

There were two issues before the Court. The first was whether Art. 61 of the Swiss Code of Civil Procedure (CCP) allowed a full or limited court review of the arbitration agreement alleged by the respondents. Art. 61 CCP states in relevant part:

“[i]f the parties have concluded an arbitration agreement relating to an arbitrable dispute, the court shall decline jurisdiction unless […] [b.] the court holds that the arbitration agreement is manifestly invalid or unenforceable."36

The second issue was whether, applying the correct standard of review, the lower courts were right to decline jurisdiction.

The Court decided the first issue as follows: Art. 61(b) CCP requires the courts to review arbitration agreements in two steps. In a first step, the court has to subject to full review the existence of an arbitration agreement and whether the dispute is arbitrable. If so, the Court must decline

35 ASA Bull. 3/2014, p. 530 (4A_560/2013). 36 Art. 61(b) CCP (unofficial translation).



jurisdiction unless, in a second step, it determines that the arbitration agreement is “manifestly invalid or incapable of being performed."37

The Court adds that a limited review applies to the objective scope of the arbitration clause (inhaltliche Tragweite der Schiedsvereinbarung)38 and to pathological arbitration clauses, i.e. clauses that show a binding intent to arbitrate but that are incomplete, unclear or contradictory.39

This decision can be criticized on many grounds – but not necessarily the result the Court reached in this particular case. The Court convincingly held that no intention to arbitrate and, accordingly, to exclude the jurisdiction of state courts had been expressed (the Court probably could have found that there was manifestly no valid agreement to arbitrate, which would have obviated the need to interpret the statute in an unconvincing manner). Justified criticism can be directed, not at the result, but the rule that the Court created – namely that, from now on, under Art. 61(b) CCP, courts should fully review whether an arbitration agreement came to existence, with only limited review for issues of scope.

The distinction between an arbitration agreement’s existence and its scope finds little support in the text of Art. 61(b) CCP. The provision uses the term “invalid;” it does not mention “scope” at all. It is worth emphasizing that, according to virtually all scholars who had written about the issue at the time, the term “invalid” included the issue of whether the arbitration agreement had come to existence (Zustandekommen).40 There should have been no doubt about the meaning of the term “invalid” in Art. 61(b) CCP.

The Court’s decision is also contrary to the legislative purpose of this provision, which is to codify the Court’s case law on Art. 7(b) PILA also in

37 BGE 140 III 367, ASA Bull. 3/2014, p. 530 (4A_560/2013), c. 2.2.3. 38 BGE 140 IIII 367, ASA Bull. 3/2014, p. 530 (4A_560/2013), c. 2.2.3 (citing BGE 138 III

681, ASA Bull. 4/2012, p. 864, c. 3.2). 39 BGE 140 III 367 c. 2.2.3, ASA Bull. 3/2014, p. 530 (4A_560/2013), (citing BGE 138 III

29, ASA Bull. 1/2012, p. 157 (4A_246/2011), c. 2.2.3). 40 BK ZPO-HURNI, Art. 61 N 20 (“Ungültig ist eine Schiedsvereinbarung, wenn sie aus

formellen oder materiellen Gründen nicht zustande kommt oder aber nachträglich dahinfällt.”); BERNHARD BERGER/FRANZ KELLERHALS, International and Domestic Arbitration in Switzerland, 2nd Edition, Berne 2010, N 663; DAVID HOFMANN/CHRISTIAN

LÜSCHER, Le Code de procédure civile, Berne 2009, 44; COURVOISIER, Stämpflis Handkommentar, ZPO, 1st Ed. 2010, Art. 61 N 5; DIKE-Kommentar ZPO-STACHER, 1st Edition, Zurich 2011, Art. 61 N 11; MÜLLER-CHEN, in: Sutter-Somm/Hasenböhler/Leuenberger, ZPO Komm., Art. 61 N 22; TARKAN GÖKSU, Schiedsgerichtsbarkeit, Zurich/St. Gallen 2014, N 1184; DOMINIK GASSER/BRIGITTE

RICKLI, Schweizerische Zivilprozessordnung, 1st Edition, Zurich 2010, Art. 61 N 2.

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cases subject to the CCP.41 If the Court had applied its case law interpreting Art. 7(b) PILA also to Art. 61(b) CCP, its conclusion would have been that “the court may only accept jurisdiction where there is obviously no valid arbitration agreement between the parties."42 Thus, the question of whether an arbitration agreement exists would have doubtless also been subject to limited review.43

Equally important, but not mentioned in the Court’s decision, are the policy reasons for a limited court review in the pre-arbitral stage. The purpose of limited review is to ensure that, except in cases where there is manifestly no valid arbitration agreement, the arbitrators are the first to fully review their own jurisdiction.44 Such a rule of priority enhances the effectiveness of arbitration agreements, making it more difficult to sue in some other, non-chosen forum. (For similar reasons, the Brussels I Regulation exempts exclusive choice of court agreements from the strict lis pendens rule and gives priority to the presumably chosen court.45). Such a rule of priority finds its justification in the parties’ presumptive intent to resolve all their disputes, including disputes over the arbitrators’ jurisdiction, by their chosen tribunal (with full court review of arbitral jurisdiction reserved for the annulment or the enforcement stage) and not by the courts whose jurisdiction they wanted to exclude.46 The parties should not have to

41 BGE 140 III 367, ASA Bull. 3/2014, p. 530 (4A_560/2013), c. 2.2.3 (“Mit dem Kriterium

der Offensichtlichkeit in Art. 61 lit. b ZPO wollte der Gesetzgeber die bundesgerichtliche Rechtsprechung zu Art. 7 lit. b IPRG kodifizieren”).

42 BGE 138 III 681, ASA Bull. 4/2012, p. 864, 686 c. 3.2. 43 BGE 138 III 681, ASA Bull. 4/2012, p. 864, 686 c. 3.3. 44 DANIEL GIRSBERGER/NATHALIE VOSER, International Arbitration: Comparative and Swiss

Perspectives, 3rd Ed. Zurich 2016, 133 (“rule of chronological priority”); EMMANUEL

GAILLARD, La reconnaissance, en droit suisse, de la seconde moitié du principe d’effet négatif de la compétence-compétence, in: Gerald Aksen et al. (eds.), Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in Honour of Robert Briner, ICC Publishing, Paris 2005, 311, 316-317 (“l’effet négatif de la compétence-compétence consacre une priorité chronologique à la décision de l’arbitre par rapport à celle du juge”); MLADEN STOJILJKOVIĆ, Die Kontrolle der schiedsgerichtlichen Zuständigkeit, Diss., Zurich 2014, 62.

45 See No. 22 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of December 12, 2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (recast) (“Brussels I Regulation”).

46 EMMANUEL GAILLARD/YAS BANIFATEMI, The Negative Effect of Competence-Competence: The Rule of Priority in Favour of the Arbitrators, in: Emmanuel Gaillard/Domenico Di Pietro (eds.), Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice, London 2008, 257,



fear parallel proceedings and be concerned about an impending court decision that may preempt the findings of their chosen arbitral tribunal.47 Thus, the rule of priority intends to give full (subject matter) priority to the arbitral tribunal, and to exclude parallel proceedings, unless the court determines that there is manifestly no valid agreement to arbitrate. Yet the Court here gives both the courts and the arbitral tribunal equal powers to review the issue of whether the parties agreed to arbitrate – which is precisely what a limited court review of arbitration agreements sought to avoid.

This decision, apart from being unconvincing in its application of the rules of statutory interpretation, will also have unintended side effects. In domestic cases, the legislator chose to coordinate parallel proceedings between arbitral tribunals and courts by using two coordination mechanisms that do not work well together: limited (or now partly limited) court review (Art. 61(b) CCP) with a strict lis pendens rule (Art. 372(2) CCP).48 This means that the arbitration cannot continue, until the courts who were seized first have decided whether their jurisdiction is excluded by virtue of an arbitration clause. This can delay the arbitration by several years (in this rather straightforward case, it took two years). Because court review is now unlimited on the issue whether the arbitration agreement came to existence, the arbitral tribunal will be bound by the courts’ decision. Yet determining whether an arbitration agreement has come to existence will not always be as straightforward as in this case. By way of example, determining whether a non-signatory is bound by the arbitration agreement through his conduct can be a very fact-intensive exercise that may require extensive document review and possibly witness testimony. Such a dispute may take considerable time to resolve and, if resolved in the courts first, may preempt many of the issues that will be decided in arbitration. If the policy choice is to leave such issues for primary determination by the arbitrators, with full court review thereafter, there should be limited court review on all issues of arbitral jurisdiction, and

260 (“centralization of litigation concerning the existence and validity of the arbitration agreement.”); MLADEN STOJILJKOVIĆ, Die Kontrolle der schiedsgerichtlichen Zuständigkeit, Diss., Zurich 2014, 63.

47 EMMANUEL GAILLARD, La reconnaissance, en droit suisse, de la seconde moitié du principe d’effet négatif de la compétence-compétence, in: Gerald Aksen et al. (eds.), Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in Honour of Robert Briner, ICC Publishing, Paris 2005, 311, 316; GABRIELLE KAUFMANN-KOHLER/ANTIONIO RIGOZZI, International Arbitration: Law and Practice in Switzerland, 3rd Edition, Oxford 2015, N 5.42.

48 See, generally, MLADEN STOJILJKOVIĆ, Die Kontrolle der schiedsgerichtlichen Zuständigkeit, Diss., Zurich 2014, 152-156.

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no lis pendens rule preventing the arbitration from going forward (the latter issue, however, will require legislative action).

The decision at hand should be reconsidered and, in any event, not followed when interpreting Art. 7 PILA, the parallel provision for arbitration agreements providing for an international arbitral tribunal seated in Switzerland.49 The main difference in the context of the PILA is that there is no lis pendens rule that would prevent the parties from initiating the arbitration, regardless of whether the courts were seized first.50 Accordingly, there is a risk of parallel proceedings on the issue of whether an arbitration agreement has been formed. Because no particular coordination mechanism applies, i.e. neither the lis pendens rule nor limited court review, the two proceedings will in principle continue in parallel – unless either of the two is (voluntarily) stayed in favor of the other. If neither proceeding is stayed, there will be a so-called race to the judgment: the quicker proceeding will result in a binding judgment on the issue and impose itself on the other as res judicata. A peculiar aspect about this “race” will be that, either way, the issue will in the end be before the Court, whether it hears a challenge against an arbitral award or an appeal against a cantonal court judgment. In other words, both sets of proceedings are “running” toward the same ultimate decision maker, the Court. It is questionable whether such a race is desirable.

In summary, the decision introduces a novel distinction, subjecting to full review an arbitration agreement’s existence and to limited review issues of scope, without solid legal basis and justification. This decision should be reconsidered and, in any event, not applied in connection with Art. 7(b) PILA.

V. Conclusion The three decisions discussed here show inconsistent approaches to

court review of arbitral decisions on jurisdiction. In the first decision, the Court refuses to review a jurisdictional decision where review would have been justified and necessary; in the second decision, Court review is available where

49 But see BERNHARD BERGER, Negative effect of competence-competence revisited. Note on

4A_560/2013, Judgment of 30 June 2014, ASA Bulletin 2014, 539-542; BERNHARD

BERGER, Die Rechtsprechung des Bundesgerichts zum Zivilprozessrecht im Jahr 2014, 3. Teil: Schiedsgerichtsbarkeit, 562-574, 570; MARCO STACHER, Die Rechtsprechung des Bundesgerichts in Schiedssachen (2013 und 2014), AJP 2014, 1545-1568, 1563 Fn. 96. See also DANIEL GIRSBERGER/NATHALIE VOSER, International Arbitration: Comparative and Swiss Perspectives, 3rd Ed., Zurich 2016, 124 (“it would not be appropriate to apply a limited prima facie review in every case”).

50 See Art. 186(1bis) PILA.



none is necessary and of questionable use; and, in the third decision, the Court held that, in domestic cases, the courts have to subject some issues of arbitral jurisdiction to full review and some to limited review, thereby creating a risk of unregulated parallel proceedings in a non-chosen forum, which cannot be what the legislator or the parties could have intended. These three decisions, and the reasoning that underlies them, should be reconsidered.

Mladen STOJILJKOVIĆ, Arbitral Jurisdiction and Court Review: Three Swiss Federal Supreme Court Decisions to Reconsider

Summary

This article discusses three recent decisions of the Swiss Federal Supreme Court that show inconsistent approaches with regard to the availability of court review in connection with issues of arbitral jurisdiction. In the first case, the Court considered itself bound by the arbitrator’s finding of an agreement to arbitrate, only because the arbitrator had come to his conclusion by way of subjective interpretation, rather than objective interpretation. The article argues that court review ought to be available regardless of whether the arbitrator’s finding of an agreement to arbitrate is based on subjective or objective interpretation. The second case relates to multi-tiered dispute resolution clauses. Here, the Court accepted to review a challenge for violation of a pre-condition to arbitration, regardless of whether the objection to arbitration was “jurisdictional,” on the sole ground that the violation at issue needed to be sanctioned one way or another. This is unconvincing. Court review ought to be available only if the objection to arbitration raises a genuine issue of jurisdiction, which this case did not. In the third case, the Court addressed the situation where a party objects to the courts’ jurisdiction on the ground that the parties agreed to arbitrate the dispute. In this decision, the Court created a two-tiered review of such objections, requiring full review of the issue whether an arbitration agreement had come to existence, and limited review for issues of scope. This gives both arbitrators and courts equal powers to examine whether an arbitration agreement exists, which may lead to undesirable parallel proceedings on the issue whether an arbitration agreement exists. These three cases, and the reasoning that underlies them, should be reconsidered.

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