The Competence-Competence Principle: The Arbitral Tribunal’s Power to Rule on Its Own Jurisdiction and Its Reflections Under Turkish Law

1. Introduction

Arbitration has become increasingly significant, particularly in commercial disputes, due to its consensual nature, the expertise offered by arbitrators, and its ability, in many cases, to provide a faster and more flexible dispute resolution mechanism than state court proceedings. However, the effectiveness of arbitration as a dispute resolution mechanism depends not only on the parties’ willingness to submit their disputes to arbitration, but also on the existence of fundamental structural principles that protect and support that intention. Among these principles, one of the most important is the competence-competence principle, which refers to the authority of an arbitrator or arbitral tribunal to rule on its own jurisdiction.

The principle is not merely a technical jurisdictional rule. Rather, it is a fundamental doctrine that delineates the boundaries between arbitration and state courts and directly affects the functionality of arbitral proceedings. Questions concerning whether a dispute is arbitrable, whether an arbitration agreement is valid, or what its scope encompasses are often determinative of the fate of the arbitral process. By regulating which authority should assess such objections and at what stage, the competence-competence principle ensures the proper functioning of the arbitration system.

2. Conceptual Framework of the Competence-Competence Principle

The term competence-competence originates from German and literally means “jurisdiction over jurisdiction.” The principle refers to the authority of an arbitrator or arbitral tribunal to determine the existence, scope, and limits of its own jurisdiction. Within this framework, an arbitral tribunal may examine issues such as the existence, validity, scope, applicability, and arbitrability of an arbitration agreement.

Legal doctrine generally recognizes two dimensions of the principle. Its positive effect refers to the arbitral tribunal’s authority to decide directly on challenges to its jurisdiction. Its negative effect, on the other hand, requires state courts to refrain from intervening in the arbitral process before the arbitral tribunal has had the opportunity to assess such issues. In this way, parties are prevented from delaying or undermining arbitral proceedings by prematurely resorting to state courts.

As one of the cornerstones of arbitration, the competence-competence principle constitutes a fundamental structural mechanism that secures the functional autonomy of arbitral tribunals and enhances the efficiency of arbitral proceedings. By allowing arbitrators to determine issues relating to the validity, scope, and arbitrability of an arbitration agreement, the principle helps ensure that arbitral proceedings are not disrupted by unnecessary judicial intervention.

3. The Place of the Principle in International Arbitration Law

The competence-competence principle has become a well-established principle of international arbitration law. Article 16 of the UNCITRAL Model Law expressly provides that an arbitral tribunal may rule on its own jurisdiction. Likewise, the 1958 New York Convention indirectly supports the principle by giving priority to the recognition and enforcement of arbitration agreements. Furthermore, the ICSID system, as well as the rules of leading arbitral institutions such as the ICC, LCIA, and SCC, expressly empower arbitral tribunals to determine their own jurisdiction. Accordingly, the competence-competence principle is not merely a theoretical concept but is widely recognized as an essential mechanism for ensuring the effectiveness of international arbitration.

A comparative law analysis reveals that the principle is subject to varying approaches across different jurisdictions. French law is regarded as one of the legal systems that most strongly embraces the negative effect of the competence-competence principle. Under the French approach, state courts may not intervene in arbitral proceedings unless the arbitration agreement is manifestly void or manifestly inapplicable. Accordingly, jurisdictional issues must, in principle, first be examined by the arbitral tribunal. This approach is intended to preserve the autonomy and continuity of arbitral proceedings.

In contrast, U.S. law adopts a more balanced and contract-oriented approach. Under U.S. arbitration law, threshold issues such as the existence and scope of an arbitration agreement are generally determined by courts. However, where the parties have clearly and unmistakably agreed to submit such issues to arbitration, arbitrators may determine their own jurisdiction. This approach, which became particularly prominent following the U.S. Supreme Court’s decision in First Options of Chicago, Inc. v. Kaplan, reflects a model that places significant emphasis on party autonomy.

4. The Competence-Competence Principle Under Turkish Law

The Turkish legal framework expressly adopts the competence-competence principle through both the Civil Procedure Law No. 6100 (“CPL”) and the International Arbitration Law No. 4686. Accordingly, arbitrators and arbitral tribunals are empowered to determine matters concerning the existence, validity, scope, and arbitrability of an arbitration agreement in both domestic and international arbitration proceedings.

Through this framework, priority is given to party autonomy, while judicial intervention in the arbitral process is limited in order to safeguard the independence of arbitral proceedings. The objective is to prevent parties from delaying or frustrating arbitration at the outset by resorting to state courts.

Nevertheless, the competence-competence principle does not confer unlimited authority upon arbitrators. The principle generally comes into play when a party challenges the tribunal’s jurisdiction, and decisions rendered by arbitrators on jurisdictional issues are not final and immune from review. Indeed, both the CPL and the International Arbitration Law provide for the possibility of setting aside arbitral awards. In particular, courts may exercise judicial review where arbitrators exceed their jurisdiction or render decisions beyond the scope of the arbitration agreement.

This review mechanism serves a dual purpose: it ensures legal certainty while simultaneously preventing arbitral proceedings from becoming arbitrary. Turkish law therefore seeks to strike a careful balance between the effectiveness of arbitration and judicial supervision.

5. How Do Turkish Courts Apply the Competence-Competence Principle?

Turkish courts have consistently applied the competence-competence principle in disputes involving arbitration agreements. The role of the principle under Turkish law was expressly acknowledged by the General Assembly for the Unification of Judgments of the Court of Cassation in its decision dated 19 June 2020 and numbered E. 2019/4, K. 2020/1:

“In order for arbitration to achieve its intended purpose, the arbitrator’s authority to decide on its own jurisdiction has been accepted pursuant to the principles of separability and independence of the arbitration agreement. Through the regulation introduced under Article 422 of the CPL, it was intended to expedite arbitration proceedings and prevent arbitration from being frustrated at later stages through jurisdictional objections or allegations concerning the invalidity of the arbitration agreement.”

In this decision, the Court emphasized that, in order to ensure the effectiveness of arbitration, arbitrators must be empowered to rule on their own jurisdiction pursuant to the principles of separability and independence of the arbitration agreement. The Court further noted that Article 422 of the CPL was enacted to expedite arbitration proceedings and to prevent parties from derailing arbitration through jurisdictional challenges at later stages.

For example, in the decision of the Istanbul 17th Commercial Court of First Instance dated 28 May 2019 (E. 2019/52, K. 2019/261), the parties’ transportation agreement contained the following arbitration clause: “If arbitration is required, it shall be conducted in London and English law shall apply as the governing law.” One party argued that the phrase “if arbitration is required” rendered the parties’ intention to arbitrate uncertain. The Court rejected this argument, taking into account the parties’ status as merchants and holding that the phrase should be interpreted, in accordance with the prudent merchant principle, as meaning “in the event of a dispute.” The Court further referred to the doctrine of separability and held that any assessment regarding the validity of the arbitration clause should be conducted independently of the underlying contract. Relying on the competence-competence principle, the Court concluded that the authority to determine the validity of the arbitration agreement belonged to the arbitral tribunal and therefore upheld the arbitration objection, dismissing the action for lack of jurisdiction.

The decision was subsequently upheld by the 12th Civil Chamber of the Istanbul Regional Court of Appeal in its decision dated 19 December 2019 (E. 2019/1503, K. 2019/1611). The Regional Court of Appeal emphasized that the designation of London as the seat of arbitration and English law as the governing law did not undermine the parties’ intention to arbitrate. The Court further confirmed that the authority to determine whether a valid arbitration agreement existed belonged to the arbitral tribunal pursuant to the competence-competence principle. It stressed that, for purposes of assessing the validity of an arbitration agreement, the decisive factors were the parties’ written agreement and their intention to submit disputes to arbitration. Accordingly, the Court concluded that a valid arbitration agreement existed and upheld the arbitration objection.

Taken together, these decisions demonstrate that Turkish courts tend to interpret arbitration agreements in a manner that preserves, rather than restricts, the parties’ intention to arbitrate whenever reasonably possible. This approach indicates that the negative effect of the competence-competence principle has also been functionally embraced in Turkish practice.

Similarly, in its decision dated 2 November 2015 (E. 2015/4467, K. 2015/11347), the 11th Civil Chamber of the Court of Cassation addressed a claim seeking a judicial declaration that an arbitration clause was invalid. Referring to Article 422 of the CPL, the Court held that objections concerning the validity of an arbitration agreement must first be examined by the arbitral tribunal and therefore upheld the lower court’s decision declining jurisdiction. The decision is significant insofar as it confirms that challenges to the validity of an arbitration clause should, in principle, be addressed by arbitrators before being brought before state courts.

Furthermore, in its decision numbered E. 2017/4281, K. 2018/1519, the 11th Civil Chamber of the Court of Cassation held that an arbitral tribunal may rule on the validity of an arbitration clause, while emphasizing that such decisions remain subject to judicial review in setting-aside proceedings. Likewise, in its decision numbered E. 2014/3274, K. 2015/3439, the 15th Civil Chamber of the Court of Cassation recognized that arbitral awards rendered beyond the scope of the arbitration agreement may be annulled. These decisions demonstrate that, although the competence-competence principle is firmly recognized under Turkish law, arbitrators’ determinations regarding their own jurisdiction remain subject to judicial scrutiny and may constitute grounds for annulment proceedings.

On the other hand, the Court of Cassation has consistently emphasized that the parties’ intention to arbitrate must be expressed clearly and unequivocally. In its decision dated 8 November 2023 (E. 2023/1944, K. 2023/3131), the 3rd Civil Chamber of the Court of Cassation examined an attorney fee agreement that referred both to arbitration and to state courts. The Court concluded that the parties’ intention to arbitrate was neither clear nor definitive and therefore held the arbitration clause invalid. This decision is particularly important because it demonstrates that the competence-competence principle can operate only where a valid and unambiguous arbitration agreement exists.

6. Conclusion

The competence-competence principle occupies a central position within arbitration and serves as a fundamental structural mechanism that enables arbitral tribunals to determine the boundaries of their own jurisdiction. By doing so, it protects arbitral proceedings from dilatory judicial interventions based on jurisdictional objections and ensures that party-driven dispute resolution mechanisms operate efficiently, effectively, and without interruption.

The Turkish legal system has expressly embraced this principle both through statutory provisions and judicial precedent. While arbitrators are granted the primary authority to decide jurisdictional issues, their determinations remain subject to limited judicial review. This approach reflects a dual-layered control mechanism that preserves legal certainty without undermining the autonomy of arbitration.

Accordingly, Turkish law adopts a balanced model under which the arbitral tribunal’s primary authority is recognized, provided that such authority is grounded in a valid arbitration agreement and remains ultimately subject to limited judicial supervision. This model strengthens both the effectiveness and attractiveness of arbitration while simultaneously safeguarding judicial oversight, an indispensable component of the rule of law.

@Sena Güngördü