Our globe has clearly shrunk, and contemporary communication technologies have catalysed economic transactions between individuals from all origins and cultures. While all of this has resulted in extraordinary economic growth, it has also resulted in conflicts among trade partners regulated by international commercial accords. These conflicts, to mention a few, include “interpretation of contractual words,” “legal implications of a contract,” “respective rights and duties of the parties,” and “non-performance of contractual obligations.”
Judicial conflict resolution forums often result in lengthy and prolonged cases. As a result, disputing parties are increasingly turning to alternate conflict resolution methods, particularly arbitration.
While arbitration is often regarded as an effective method of resolving conflicts, one of the major difficulties that the arbitration process confronts is the recognition and enforcement of arbitral decisions. If an arbitral decision is not recognised or enforced, the whole objective of resolving conflicts outside of the legal system is undermined.
At the same time, arbitration laws and rules provide for safeguards against the enforcement of arbitral awards, allowing the award debtor to challenge the arbitral award on a variety of grounds, including “invalidity of arbitration agreement,” “arbitrability of dispute,” “non-adherence to due process,” and “violation of public policy.” Each of these sites is a huge area of study in and of itself. Arbitrability of a dispute is a key component of the arbitral process, since challenges to the arbitrability of the subject matter of the dispute may be made before, during, and after the conclusion of the arbitration process. This dissertation would concentrate on the arbitrability of the issue for the sake of brevity and study.
1. The Arbitrability of Disputes
Every arbitral panel is required to review the arbitration agreement before continuing with the arbitration. The arbitral tribunal examines whether the issue is arbitrable in light of the national public policy of the seat of arbitration, since this affects the tribunal’s jurisdiction over the case. Based on the socioeconomic basis of the society, national public policy differs significantly from one jurisdiction to the next.
The “New York Convention” provides a number of exceptions to the general duty in “Article II” to enforce written arbitration agreements. One of these exclusions is included in “Article II (1),” which allows for the non-arbitrability of issues that cannot be settled via arbitration. Furthermore, “Article V(2)(a)” states that an arbitral judgement is not required to be acknowledged if the subject matter of the disagreement is not susceptible of resolution via arbitration under the legislation of the nation seeking recognition.
National laws often specify the subject matter of conflicts that are not amenable to resolution via arbitration, typically because the claims are of public significance or need the use of formal court processes and safeguards.
Scholars such as Blackaby, Partasides, Redfern, and Hunter have defined the word “arbitrability” of conflicts, stating that arbitrability “involves identifying which kinds of dispute may be handled by arbitration and which belong solely to the realm of the Courts”. Gary Born, on the other hand, explains the doctrine of non-arbitrability, stating that “non-arbitrability doctrine rests on the notion that some matters so pervasively involve ‘public’ rights and concerns, or third-party interests, which are the subjects of uniquely governmental authority, that agreements to resolve such disputes by ‘private’ arbitration should not be given effect.” 
Arbitrability is further classified into two types: when issues concerning the capacity of the parties arise, it is referred to as “subjective arbitrability or arbitrability rationae personae,” and when the subject-matter of the dispute cannot be arbitrated under domestic law, it is referred to as “objective arbitrability or arbitrability rationae materiae.”
Various authorities have decided that the issues concerning the arbitrability of disputes under Article II(1) and Article V(2)(a) of the New York Convention are of a similar character. Thus, if arbitration of a dispute or claim cannot continue under Article II(1) owing to the case’s non-arbitrability, the award relating to the specific issue is usually subject to non-recognition under Article V(2)(a) of the New York Convention.
Some countries have established a list of disputes that can be submitted to arbitration. For example, Article 2060 of the French Civil Code states that: “One may not enter into arbitration agreements in matters of status and capacity of persons, in those relating to divorce and judicial separation, or on controversies concerning public bodies, institutions, and more generally in all matters.
Article 2059 of the “French Civil Code” states that “all individuals may establish arbitration agreements of rights that they may freely dispose of.” This differentiation concept has been adopted by the “Dutch Code of Civil Procedure” and the “Spanish Arbitration Act, 2003.” 
Section 1030 of the “German Civil Procedure Code (CCP)” takes a broad approach to defining arbitrability, stating that “Any claim having an economic interest may be the subject of an arbitration agreement.” An arbitration agreement addressing claims that do not include an economic interest has the legal force to the degree that the parties are entitled to reach a settlement on the disputed issue.” Simultaneously, it expressly states that disputes relating to the existence of a lease of residential accommodation are not arbitrable (Section 1030(2), CCP). Section 1030(3) of the “German Civil Procedure Code” states that further exclusions may exist in other legislation. Disputes involving antitrust, competition, and intellectual property law are generally arbitrable under the German arbitration regime.
2. Stages at which the Arbitrability of Disputes can be Questioned
During the dispute resolution process, the question of arbitrability of the dispute is raised at several stages. For starters, it may be brought before a national court by the parties through the process of invoking an arbitration agreement. Second, it can be raised prior to the commencement of arbitral proceedings to determine whether the dispute submitted for arbitration is capable of being adjudicated by arbitration; third, during the arbitration proceedings when the arbitrator may need to decide on jurisdiction before proceeding on the merits; and finally, at the stage of setting aside and challenging the enforcement of foreign arbitral awards.
The “New York Convention” provides in Article II (3) that national courts should refer the parties to arbitration if they have an arbitration agreement, but if the court finds that an arbitration agreement is null and void, inoperative, or incapable of being performed at the request of one of the parties, it should refuse enforcement of such arbitration agreement. If the national court believes that the subject matter of the dispute is such that national laws explicitly prohibit its submission to arbitration, this is a basis for refusing to implement the arbitration agreement.
The judgement made by the arbitrators before or during the arbitration proceedings, at the stage of determining the tribunal’s jurisdiction before going to the merits, is comparable to the evaluation made by national courts at the stage of enforcing the arbitration agreement. Arbitrators must determine if there is any restriction to arbitrate the specific subject matter of dispute in line with the relevant legislation.
The losing party usually raises the question of arbitrability at the stage of setting aside the award for annulment on the grounds that the subject matter of the dispute is non-arbitrable.
Finally, arbitrability of a dispute as provided for in Article V(2)(a) of the “New York Convention” at the stage of recognition and enforcement of arbitral judgments. At this point, it is important to highlight that the challenge to the non-arbitrability of the issue becomes independent of the party’s request. Furthermore, if the subject matter of the dispute cannot be resolved via arbitration under the law of the country where enforcement is sought, the national court will refuse to accept and enforce the award.
The number of decisions dealing with challenges to requests for recognition and enforcement of awards on the basis of arbitrability is relatively low because issues concerning the arbitrability of disputes generally arise and are effectively resolved at the stage of invocation of the arbitration agreement. The feeling of arbitrability of a dispute is the same at the outset of the arbitration procedure as it is at the stage of recognition and enforcement.
Written by Somesh Vaidya