In Werner Schneider, acting in his capacity as insolvency administrator of Walter Bau AG (In Liquidation) v The Kingdom of Thailand, No. 11-1458-cv (2d Cir. Aug. 8, 2012), a German company (Walter Bau AG) initiated arbitration against the Kingdom of Thailand under the German-Thailand bilateral investment treaty (BIT) for unlawful interference with investments in a tollway project in Thailand. After a hearing on the merits, the tribunal awarded Walter Bau over 30 million euros in damages, costs, and expenses (see Legal update, Cumulative pre-treaty conduct can be a breach of a fair and equitable treatment obligation).

Werner Schneider, the insolvency administrator of Walter Bau, petitioned to confirm the arbitration award in the United States District Court for the Southern District of New York under the New York Convention. The district court confirmed the arbitration award and Thailand appealed, arguing that the district court should have independently adjudicated the arbitral tribunal's jurisdiction instead of performing only a deferential review of the tribunal's decision.

The court emphasised that the question whether the parties have submitted a particular dispute to arbitration (that is, the "question of arbitrability") is an issue for judicial determination, unless the parties "clearly and unmistakably" provide otherwise. The court noted that the district court should have inquired into whether there was "clear and unmistakable" evidence of intent to arbitrate arbitrability and conducted its own review of the parties' intentions on the question.

The court stated that, where the parties explicitly incorporate arbitration rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as "clear and unmistakable" evidence of the parties' intent to delegate such issues to an arbitrator. In this case, the parties' had agreed to use the UNCITRAL Arbitration Rules, which provide:

In light of this provision, the court concluded that Walter Bau and Thailand "clearly and unmistakably" agreed that the tribunal would consider matters affecting its jurisdiction. As such, the court deferred to the tribunal's jurisdictional decision and affirmed the district court's confirmation of the award.

This case affirms the position of many circuit courts that "clear and unmistakable" intent to arbitrate the question of arbitrability can be established through agreement to a set of rules, specifically the UNCITRAL Rules, that authorise the arbitral panel to rule on its own jurisdiction. This case also demonstrates that courts confirming an arbitral award have an independent duty to assess whether there is "clear and unmistakable" evidence of the parties' intent to submit the question to arbitration before applying a deferential standard.