The scheme of the New York Convention arguably requires courts outside the seat to respect an arbitral tribunal’s assessment of its own jurisdiction...
New York Proceeding After the hearing in the Full Court and shortly before it handed down its decision, a New York Court dismissed Jasmin’s application to set aside the Arbitrator’s final award.12 The New York Court undertook a de novo review of the question of jurisdiction. Applying New York law, it found that Jasmin was bound by the arbitration agreement. First, because JRC was acting as Jasmin’s agent when it entered into the Supply Agreement. Alternatively, because an equitable estoppel (as understood in New York law) applied to preclude Jasmin from denying that it was bound by the arbitration agreement, having regard to the direct benefits that it received under the Supply Agreement and its involvement in both in its negotiation and implementation. There is no mention of the New York Court proceedings in the Full Court’s decision. Comment Gary Born notes that there have been a wide range of divergent views expressed on this issue, and resulting uncertainty, but that in order to produce a consistent and effective legal regime for the recognition and enforcement of international arbitration agreements, and to avoid the possibility of inconsistent results, the same choice of law rules should apply under both Articles II and V at the different stages of the arbitration process.13 The author respectfully agrees. If, as can be expected, Trina seeks to enforce the award in Australia against Jasmin, any contention by Jasmin, in resisting enforcement, that it was not a party to the alleged arbitration agreement falls to be determined by New York law. It is highly unlikely that on an enforcement application the Federal Court would find (contrary to the finding of the New York Court) that under New York law Jasmin is not bound by the arbitration agreement contained in the Supply Agreement.14 This leaves open the unsavoury spectre that the Federal Court will enforce the Arbitrator’s award and at the same time allow the Federal Court proceeding to be litigated before it. It seems incongruous that a stay application would not be granted in circumstances where the New York courts have confirmed the Arbitrator’s ruling that Jasmin is bound by the arbitration agreement (unless it could be said that some of the matters alleged in the Federal Court proceeding fall outside the scope of the arbitration agreement). The scheme of the New York Convention arguably requires courts outside the seat to respect an arbitral tribunal’s assessment of its own jurisdiction, subject to review by courts of the arbitral seat. Here, an Arbitral Tribunal had already found it had jurisdiction, and the supervising court at the seat had confirmed that decision. It is not known why the Full Court did not wait to see how the New York courts decided the setting aside application (if, indeed, the matter was brought to its attention at all). Neither the trial judge, nor the majority of the Full Court, placed any