top of page

Kompetenz-Kompetenz as the Saviour? Empowering Tribunals against Hybrid Clauses

Shambhavi & Satyam*


Party autonomy is one of the basic tenets of arbitration as an Alternate Dispute Resolution (“ADR”) mechanism. It fundamentally means the freedom of contract.  Along with the choice of the applicable law, it also incorporates the liberty to choose the presiding tribunal, the place, the language, and the procedure of the arbitration. This is to facilitate the smooth functioning of the tribunal and expedite the dispute resolution process.  The principle of party autonomy has its advantages and disadvantages. A lack of legal literacy among the parties and their appointed draftsmen might lead to the drafting of pathological arbitration clauses, which can lead to chaos and prolong arbitration proceedings. Pathological clauses are those with inherent defects that can impede the smooth advancement of arbitration proceedings.   They create an unnecessary burden for courts because they provide an easy avenue for appeals and challenges to arbitral awards and proceedings. However, pathology in the arbitration clause or agreement, will not render it invalid by itself. Courts tend to prefer an interpretation in favor of the arbitration proceedings. There have been many instances where courts have had a reconciliatory approach toward the interpretation of such inconsistent arbitration clauses. Examples would include the case of  Fiona Trust & Holding Corp v Privalov, which established the Fiona Trust doctrine, that has been used to construct conflicting arbitration clauses, based on the presumption that rational parties would want their disputes to be adjudicated under a single forum. This doctrine has been used to harmonize inconsistencies within dispute resolution clauses in cases such as Melford Capital Partners (Holdings) LLP l v Wingfield Digby, directing the parties to approach an arbitral tribunal.

One kind of pathology that arises is “hybrid arbitration clauses (institutional)”. Hybrid institutional arbitration clauses are situations in which parties choose one arbitral institution to administer a case but under the rules of another arbitral institution. An example of the same would be–

“The arbitration proceedings will be carried under the supervision of the Delhi Arbitration Centre, by the rules of the Singapore International Arbitration Centre (“SIAC”).”

Hybrid clauses end up creating an adverse situation for the administering institution, wherein they have to abide by the rules of a different institution, for which they lack adequate machinery. As stated earlier, in most cases, courts have upheld the parties’ intent to arbitrate. Notable examples would be -  Insigma Technology Co Ltd. v. Alstom Technology Ltd.,Flashbird v. Compagnie de Sécurité Privée et Industrielle, and Value Advisory Services v. ZTE Corp, which will be discussed in the upcoming section. Although words of such clauses are constructed liberally to give way to arbitration, we cannot turn a blind eye to the problems caused in terms of certainty and litigiousness of the proceedings when they are implemented. While such clauses can be practically implemented, it has been held that there are manifest complications and disadvantages in doing so.

Henceforth, the authors propose that the doctrine of kompetenz-kompetenz can mitigate the anomalous nature of such clauses and can benefit both the court and the arbitral institution, as it would allow the tribunal itself to decide which rules are best applicable to the proceedings. The powers of the arbitral tribunal go beyond deciding upon its jurisdiction. The Supreme Court in India has determined that when the existence of an arbitration agreement is not disputed, all jurisdictional issues are to be left under the tribunal’s authority.

The article begins with the examination of landmark cases concerning hybrid arbitration clauses, and the ratio which has been upheld by courts of different jurisdictions (Section II). Thereafter, the authors will analyze the difficulties caused by such clauses, including the application of the doctrine of kompetenz-kompetenz (Section III), and end with concluding remarks (Section IV). The aim is to show how the doctrine of kompetenz-kompetenz can prove itself as an effective solution to the problems caused by such clauses and reduce the burden of courts and institutions.


The evolution of arbitral jurisprudence has given rise to jurisdictional disputes premised on hybrid arbitration clauses. Despite the obstacles arising in its arbitrability, courts and Tribunals have focused more on the operable and enforceable parts of the same. [i] The authors in this section aim to elaborate on the same with the help of domestic and international case-laws.

The case of Insigma Technology Co. Ltd v. Alstom Technology Ltd (“Insigma”), followed a dispute between Insigma and Alstom Technologies that led to an objection to the arbitration clause in their agreement. Insigma challenged that the arbitration should have been filed with the International Chamber of Commerce (“ICC”) instead of SIAC. The court found that the parties had agreed to ad hoc arbitration by choosing a mix of regulations, and SIAC was able to supply the necessary actors to make the ICC rules workable. The case highlights the challenges of hybrid arbitration clauses, where parties try to benefit from the cost differences between different arbitration institutions, but end up spending more on jurisdictional disputes[ii]. The court's decision upholds the parties' agreement and the ability of SIAC to administer the arbitration under the ICC rules.

In the case of Russian Federation v. I.M Badprim, SRL (“Svea Appeal”), Badprim, a Moldovan company, and the Russian Federation (Customs Office) agreed on the construction of a border crossing post. The arbitration clause designated the Arbitration Institute of the Stockholm Chamber of Commerce (“SCC”) to administer disputes under ICC rules. The Russian Federation contested jurisdiction due to the SCC's inability to fully comply with ICC rules. The Svea Court of Appeal upheld the clause, emphasizing the intent to resolve disputes at the SCC and the SCC's adaptation of ICC rules. The court prioritized dispute resolution over technicalities, demonstrating a pragmatic approach to enforceability and operability despite partial invalidity. In the case of Top Gains Minerals Macao Commercial Offshore Limited v. TL Resources Pte Ltd (“Top Gains”), the Hong Kong court upheld the kompetenz-kompetenz principle in a dispute between Top Gains and TL Resources over a hybrid arbitration clause in their iron ore supply agreement. Despite the defendant's argument that the clause's reference to SIAC administration under ICC rules deprived the arbitral panel of jurisdiction, the court ruled that it was the tribunal, and not the court, that must determine the jurisdiction. The court deferred to the ICC's decision to register the case and left the final jurisdictional determination to the arbitral tribunal, in line with the kompetenz-kompetenz principle. 

In one of the recent cases (“HCCI”), the Budapest Metropolitan Court upheld an arbitral tribunal's decision to enforce a pathological arbitration clause that referred disputes to the HCCI Arbitration Court while specifying the application of the ICC Rules. Despite the respondents' challenge that the two institutions could not coherently administer the proceedings, the court reasoned that the parties' clear intent to arbitrate should be preserved by severing the invalid portions and enforcing the remainder to the extent possible, even when the clause contains technical defects. This case exemplifies the courts' pragmatic approach towards interpreting pathological arbitration clauses, prioritizing the parties' agreement to arbitrate over the clause's technical flaws.

In Flashbird v. Compagnie de Sécurité Privée et Industrielle (“Flashbird”), The Supreme Court of Mauritius dismissed an appeal by Flashbird against an arbitral award that was raised on the premise of the appointment of arbitrators under ICC Rules and that arbitral procedure has not been followed according to the agreement. The court and the Privy Council upon dismissing the appeal, discussed different spheres of the drafting of hybrid clauses. Their observations were that the major obstacles are jurisdictional disputes and applicability of laws. The privy council was not supposed to rule on jurisdiction but they suggested the draftsmen to avoid any contradiction that may arise like in this case regarding the appointment of arbitrators under ICC rules.

The jurisprudence in India has been arbitration-friendly. One such case was  Value Advisory Services v. ZTE Corporation(“Value Advisory”). There was an agreement that provided for the settlement of disputes under ICC rules at SIAC. This could not happen because SIAC declined the request stating it would not be able to administer an arbitration under ICC rules. ZTE challenged the arbitration administered under the Secretariat of the ICC Court (ICC Secretariat). The court following the doctrine of severability upheld the clause and its arbitrability, and observed that a contract cannot completely be rendered void if one part is impossible to perform rather, the impossible part shall be severed from the main contract, and the rest of it shall be enforced. The arbitration friendly approach of enforcing hybrid clauses was also observed in the case of Centrotrade Minerals and Metals Inc. v. Hindustan Copper  Ltd. The case involved a contractual dispute over copper concentrate supply. The contract included a two-tier arbitration mechanism. Two arbitral awards were passed, both mutually destructive. The Supreme Court of India enforced the second award, bringing an end to the long-standing litigation. The Court held that the respondent did not participate in the arbitral proceedings and the foreign award must be enforced under the Arbitration and Conciliation Act, 1996. It also observed that the court does not prevent a two-tier arbitration clause and upheld the arbitrability of such a clause.

The kompetenz-kompetenz principle has been validated by our Supreme Court in Uttarakhand Purv Sainik Kalyan Ltd. V. Northern Coal Field Ltd. The Division Bench emphasized on the role of tribunals in deciding their jurisdiction and upheld that the autonomy granted to them under the principle of  kompetenz-kompetenz should be rightfully followed. It observed that the principle aims at minimizing the judicial intervention in the arbitration process which is the exact reason why the ADR mechanism came into existence.


The term ‘pathological clauses’ was coined by Frédéric Eisemann, Secretary General of the ICC Court of Arbitration and a law theorist. Eisenmann has set out four elements essential for an arbitration clause.[iii] These elements are –

“(1) The first, which is common to all agreements, is to produce mandatory consequences for the parties,

(2) The second, is to exclude the intervention of state courts in the settlement of the disputes, at least before the issuance of the award,

(3) The third, is to give powers to the arbitrators to resolve the disputes likely to arise between the parties,

(4) The fourth, is to permit the putting in place of a procedure leading under the best conditions of efficiency and rapidity to the rendering of an award that is susceptible of judicial enforcement.”

Hybrid arbitration clauses are antithetical to the second and fourth elements. A perusal of the preceding section of the article shows how they have warranted interference from courts multiple times, even before the passage of the arbitral award. They create disputes related to jurisdiction, and end up being detrimental to the efficacy and rapidity of the entire proceeding.

While some might argue that hybrid arbitration clauses can prove accommodative of the parties’ intention to include multiple institutional jurisdictions, it is very apparent that the costs of incorporating hybrid clauses are more than any potential benefits.[iv] The question that arises is whether the tenet of party autonomy can supersede the efficacy of arbitration, as well as the set rules in place by these institutions. Implementing the rules of a different arbitration institution translates to increased costs, ultimately borne by the parties. On top of this, there is a multiplicity of suits due to jurisdiction-related disputes, which again aggravates the costs incurred.

The ICC Rules were amended post Insigma case, which states that only ICC Courts are vested with the power to conduct arbitrations by ICC Rules and that the parties’ agreement to arbitrate under ICC Rules amounts to their acceptance of ICC being the administrating body.[v] Nevertheless, there have been multiple instances of a contradictory application in arbitration agreements, as seen in the Svea Appeal, Top Gains, and Flashbird cases.

The general trend with judicial decisions is to not disrupt arbitration proceedings. Earlier, SIAC followed the trend of preferring party autonomy over everything and has administered arbitrations under ICC Rules, as was seen in Insigma and another case of HKL v Rizq International. However, in the Indian case of Value Advisory Services, we saw that it was the SIAC’s refusal to tend to arbitration under foreign rules that compelled the parties to approach the ICC. The Delhi HC upheld the tribunal’s mandate by applying the doctrine of severability. This shows that institutions nowadays are refusing to administer hybrid arbitrations.

It is the arbitral tribunal that has the ultimate jurisdiction over the case, as per the principle of kompetenz-kompetenz. It states that an arbitral tribunal is competent to decide upon its jurisdiction. This, in turn, empowers the tribunal to decide upon which rules it considers fit to abide by. There are examples of cases where the tribunal’s mandate, whether in favor of a hybrid arbitration or against it, has been upheld by the courts. In the recent HCCI and Flashbird cases, the tribunal’s decision to accommodate foreign rules within its framework to serve the parties’ interests, was upheld. Meanwhile, in the Top Gains case, the High Court of Hong Kong upheld the ICC tribunal’s decision to administer the arbitration without applying SIAC rules, following the principle of kompetenz-kompetenz. This very well shows the court’s deference towards this doctrine. Neither SIAC nor ICC was compelled to face the dilemma of applying the rules of a foreign institution.

In the Svea Appeal case, the hybrid arbitration was allowed, because the institution of SCC agreed to do so. The SCC Board of Directors wrongly observed that the institution has the jurisdiction to “resolve the dispute”. They conveniently ignored that the tribunal is vested with such power and not the institution.  This stand of the SCC Board has been subject to criticism for invalidating one of the basic jurisprudential doctrines of arbitration.

The widely accepted principle better known as competence-competence, is incorporated under Section 16 of the Arbitration and Conciliation Act 1996. The principle of minimum judicial interference has been affirmed in cases like Bhaven Construction v. Executive Engineer  and Deep Industries v. ONGC.  

The Apex Court has also held that court interference should just be limited to ascertaining the existence of an arbitration agreement. This would automatically imply that the rest of the jurisdictional disputes are to be decided by the arbitral tribunal.  Party autonomy allows the parties to exercise their discretion in a wide manner, and decide everything from the seat of arbitration to applicable laws. The intention of parties is prime, and the same manifested through contractual provisions would prevail. Yet, if the same autonomy acts as an obstacle to the smoothness and efficiency of the arbitration proceedings, the tribunal’s powers will have to step in.

While we have already observed the courts’ endorsement of the tribunal mandate, it would also be practicable to apply the same strategy when a case is brought up before courts at the referral stage of the proceedings. Instead of leaving this question to the convenience of the institutions, or judicial interpretation, letting the tribunal decide might help provide a definite solution as to resolving the anomaly caused by hybrid arbitration clauses. Once a dispute has been referred to a certain institution, the tribunal constituted by such institution can very well decide. Whenever the courts have upheld the performance of hybrid arbitration agreements, the application of unfamiliar rules became the tribunal’s burden. Application of kompetenz-kompetenz would sustain the proceedings’ independence from conventional dispute resolution fora.

A more practical solution to the problems created by hybrid arbitration agreements would simply be better drafting,drafting of arbitration clauses needs to be viewed from the perspective of the parties who want an easy and amicable settlement.

The clarity in the words should be given paramount importance to eliminate any chances of misinterpretation of laws applicable and jurisdiction in such clauses. The Clause should precisely mention the institution that will arbitrate the dispute and the applicable laws. If proper guidelines are followed and precautions are incorporated, it will have a two-fold impact - one would be streamlining the arbitration process, and the other would be non-intervention of court which would turn save time and money for the parties in dispute.

Parties and their draftsmen should refrain from getting adventurous with their arbitration agreements. They should properly deliberate upon the suitable forum for adjudication of disputes and attempt to stick to such applicable laws that would be more suitable to these forums. A good draftsman or counsel with adequate experience in arbitration can prove very helpful.

When it comes to using a format for drafting the clause or agreement, it would be prudent to stick to model or standard arbitration clause formats. Major arbitration institutions like the ICC, SIAC, LCIA, etc have their standard clauses which can be used if the parties intend to submit their dispute under these respective forums.  

In any event, one has to be prepared for scenarios where hybrid clauses are agreed upon, thus resulting in questions regarding jurisdiction.  Amendment of ICC Rules did not help mitigate the frequency of this pathology in arbitration agreements. Therefore, it is better to leave the question to tribunals, while simultaneously discouraging such pathology in arbitration clauses.


Hybrid arbitration clauses have brought up a plethora of jurisdictional disputes in recent times. Although the disputes are administered and are enforceable it has become a drawn-out process because oftentimes litigation is preferred to reach a focal point in such disputes. The long-drawn-out procedure of law is always antithetical to the core idea of alternative dispute resolution. Hence, this sparks a conversation on the doctrine of kompetenz-kompetenz which means the tribunal is competent on its own to decide the jurisdiction. The above principle has been much talked about and the same has been elaborated upon through case laws. This principle should be applied universally and can be included in this aspect.

Hybrid arbitration clauses have a lot of implications such as financial loss, delay caused, court interference, etc. Hybrid arbitration clauses should be avoided at all costs as they create a deadlock on the question of jurisdiction. As suggested previously, it all comes down to the drafting of arbitration clauses. It would be helpful to have a universal model guideline on the framing of arbitration clauses. Institution-specific guidelines and model clauses should be used by the framers to their advantage. Framers of commercial agreements must have this inherent intent to facilitate arbitration, and properly frame arbitration clauses with clarity on the applicable rules and administering institution.


*Shambhavi & Satyam are law students at Chanakya National Law University, Patna.

[i] Insigma Technologies V Alstom Technology Ltd [2009] 1 SLR 23.

[ii] Jennifer Kirby, 'Insigma Technology Co. Ltd v. Alstom Technology Ltd: SIAC Can Administer Cases under the ICC Rules?!?', in William W. Park (ed), Arbitration International (OUP 2009).

[iii] Frédéric Eisemann, La clause d’arbitrage Pathologique, in Commercial Arbitration Essays in Memoriam Eugenio Minoli (Torino: Unione Tipografico-editrice Torinese 1974).

[iv] Jennifer Kirby, Insigma Technology Co. Ltd v. Alstom Technology Ltd: SIAC Can Administer Cases under the ICC Rules?!?,  25 (3) OUP 319, (2009).

[v] ICC Rules of Arbitration – art. 6(2) (2021).


bottom of page