The principle of competence in jurisdiction is an important basis in commercial arbitration for its importance in reducing the time of litigation. The trust of the litigants in the arbitrator does not stop at the subject matter of the dispute but extends to all its preliminary decisions before the judgment in the case. This principle is explicitly adopted in the majority of arbitration centres. However, Libyan jurisprudence does not adopt this principle, and it is left vague under the provisions of article 757 of the Code of Plea on Matters outside the Jurisdiction of the Arbitrators, which could result in a contradiction in the arbitration decisions. Thus, this paper deals with the limits of the authority of the arbitrator in enforcing his jurisdiction under Libyan legislation by relying on the inductive method and analytical deductive approach. This research concludes that the principle of jurisdiction is one of the most important principles of international arbitration. However, Libyan legislators have not properly addressed the issue on the invalidity of the arbitration clause in a true contract due to the ambiguity of Article 757 of the Libyan Code of Procedure on matters beyond the jurisdiction of the arbitrators. There is thus an overlap between the judiciary and arbitration in specifying the jurisdiction of the arbitrator in the texts of the draft arbitration law