Commercial arbitration: mandate first

Below are a few general reflections on commercial arbitration as a method of alternative dispute resolution. Arbitration is commonly chosen in commercial maritime contracts, including time, voyage and bareboat charterparties.

Before deciding which party is right, an arbitrator must first establish what the tribunal has the authority to decide.

Three questions should therefore come first:

1. Does the tribunal have jurisdiction?
2. What, precisely, have the parties submitted for determination?
3. Does the proposed decision remain within the scope of that submission?

The tribunal’s authority derives from the arbitration agreement and the matters submitted by the parties. It must decide the dispute referred to it, without exceeding those boundaries.

An award that determines matters beyond the scope of the submission may be challenged under the applicable law of the seat. Its recognition or enforcement may also be refused under Article V(1)(c) of the New York Convention.

Defining the tribunal’s mandate is not merely a procedural formality. It is the starting point for a valid and enforceable award.

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