Legal Updates for July 2023

Breach of Preconditions to an Arbitration Agreement: A Matter of Jurisdiction or Admissibility?

Multi-tier dispute resolution clauses have increased in prominence, providing for a practical approach to dispute resolution. These clauses typically call for parties to first engage in various forms of negotiation and/or mediation as a precondition to proceeding with arbitration or litigation.

Where a party breaches such a precondition by skipping a tier and //proceeds straight to, for instance, arbitration, this may give rise to either an admissibility or jurisdiction issue. This goes beyond a mere technical or academic point – it has implications for whether an arbitral award may be set aside, given that jurisdiction is one of the limited grounds on which a party can appeal against or set aside an arbitral award in most national courts. In contrast, admissibility issues are generally determined by the tribunal and are not subject to curial review.

This article discusses the position in Vietnam, Singapore and, briefly, in other commonwealth countries as to the effect of non-compliance with a multi-tier dispute resolution clause, and whether it is considered a matter of admissibility or jurisdiction.