Originally from Czech and Central European Yearbook of Arbitration - 2012: Party Autonomy versus Autonomy of Arbitrators

Although the prevailing approach has been to prohibit extensive interpretation of arbitration agreements, increasingly, proceedings before arbitration courts involve persons who did not conclude an arbitration agreement ("joining non-signatories" or "extending the arbitration clause"). However, the extension of jurisdiction through involvement of third parties is not without its risks. This can be observed both at the start and conclusion of the arbitral application of law. The arbitration court that decides on its own competence on the basis of the Kompetenz -- Kompetenz doctrine may face significant contract law dilemmas just upon answering the preliminary questions as to jurisdiction: whether or not the arbitration agreement -- on which the court’s competence is based -- exists, and if such an agreement exists, whether the agreement is valid. If, the arbitration court is too liberal in handling the extension of the arbitration clause to third parties, it may lead to unfavorable consequences in the course of the acknowledgement and enforcement of the court’s decision. Thus, with regard to the initial arbitral application of law, the problem is to be considered one of jurisdiction, while with regard to the conclusion of the arbitral law’s application, the problem must be seen as involving the enforceability of the arbitral award.