The jurisdiction of an arbitrator should be limited in adjudicating the disputes which are the subject of the referral on the basis of which he was appointed. Adjudication of any issues other than these do not fall under the jurisdiction of the arbitrator and in the absence of consent of the parties, it is not permissible to adjudicate them for any reason. This principle draws its origins from the Common Law, it is recorded in Russell on the Law of Arbitration, 19th edition (1982), which is recognized as authority in most decisions of the Supreme Court, but also of the District Courts, concerning arbitration matters. It was issued before the revision of the English Arbitration Law, when its provisions were very similar with the Cyprus Arbitration Law, Cap.4, most of which was an English translation. In this law book, it is mentioned on the heading line, that the duty of an arbitrator is to decide disputes submitted and no more. Furthermore, it is emphasized that another important rule is that the arbitrator must decide neither more nor less than the disputes submitted to him, otherwise the award may be set aside, unless, of course, disputes submitted are formally withdrawn or unless fresh disputes are by definite agreement in writing submitted to his decision.

The appointment of an arbitrator takes place on the basis of an arbitration clause contained in the agreement of the parties with the obvious purpose of adjudicating disputes that may arise between them and be referred to arbitration before him. However, in order for a dispute to be referred to arbitration, it is necessary that there should be a demand and then a rejection or disagreement between the parties, in order for the dispute to be crystallized. Other issues arising after specific disputes have been referred to arbitration may not be adjudicated, even if they are in any way related to the referred disputes.

Therefore, if an arbitrator has been appointed and the claimant’s statement of claim has been filed, it is not permissible for the respondent to file a counterclaim and raise new claims, which have not been crystallized, as disputes of the parties before, as well as prior to the issuance of the referral notice. Τhis could happen especially, when the claimant has clarified that he will not accept and consent to the extension of the arbitrator’s jurisdiction in any way or in any matter beyond the disputes he himself has referred to arbitration. Without the claimant’s consent to an extension of the arbitrator’s jurisdiction, the arbitrator has no authority to adjudicate any disputes not listed in the referral notice.

Disputes arise after, the demands raised by the claimant are denied by the respondent. The arbitrator is appointed to adjudicate these disputes that have arisen and not any other disputes. Therefore, it follows that any adjudication of issues that fall outside the disputes that were referred will constitute an excess of the arbitrator’s jurisdiction, misconduct and a reason for removal from his duties, as well as any decision of the arbitrator is open to annulment, at least to the extent that it concerns the subject of the counterclaim which was irregularly filed.

The remedy provided to claimants when a counterclaim is filed for matters not covered by the referral notice, is the submission of an application for the issuance of a decision or order of the arbitrator to struck out and/or set aside the counterclaim, which it was irregularly filed with the defence. The legal basis is provided by the provisions of Article 30 of the Arbitration Law, Cap. 4, which provide that in arbitration the Civil Procedure rules are applied by analogy. Based on Order 19 rule 26, the counterclaim will be considered by the arbitrator as unnecessary, scandalous or tend to prejudice, embarrass or delay the fair trial of the arbitration.

A similar provision is contained in Order 27 rule 3 which provides that the Court, and by analogy the arbitrator, may order any pleading be struck out on the grounds that it discloses no reasonable cause of action or answer, and in any such case or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, may order that it be stayed or dismissed, or judgment to be entered accordingly as may be just. The invocation of the provisions of Order 19 rule 26 and Order 27 rule 3 in the jurisdictional basis of the application shall apply proportionally to the arbitration and the requested remedies of striking out and/or dismissal of the counterclaim by the arbitrator can be attributed.