Recent Swiss Supreme Court Cases

Arbitrators sitting in Switzerland are not bound by foreign court decision on jurisdiction

A foreign court decision upholding the foreign court's jurisdiction in disregard of an arbitration clause may be disregarded by the arbitrators, even where the arbitration was commenced after the foreign court proceeding, because the foreign court decision cannot be recognized under the New York Convention if the arbitrators correctly find that they have jurisdiction under the arbitration clause. If some of the parties before the foreign court were not parties to the arbitration clause, the foreign court could retain jurisdiction over such non-parties.

This decision was made by the Swiss Supreme Court in proceedings to challenge the arbitral award finding jurisdiction.

Compania Minera Condesa SA et Compania de Minas Buenaventura SA v. BRGM Pérou S.A.S et Tribunal CIA (recours de droit public), ATF 124 III 83, summarized in SJ 1998, 358-360 (1997)

When a party objects to jurisdiction of a Swiss court on the ground of an arbitration clause, such court must limit itself to a prima facie review of the arbitration clause if the place of arbitration is in Switzerland

The scope of review of a Swiss court, when its jurisdiction is objected to in favor of arbitration, depends on the location of the place of arbitration. If the place of arbitration is to be in Switzerland, the court will only perform a summary review of the prima facie existence of the arbitration agreement. The court must deny jurisdiction unless such limited review establishes that the arbitration agreement is obviously null and void, inoperative or incapable of being performed. However, if the place of arbitration is to be outside Switzerland, the Swiss court must decide the objection to jurisdiction based on a full review of the case.

Fondation M. v. Banque X., ATF 1222 III 139, SJ 1996, 677-680 (1996).

No appeal may be taken against the decision of a Swiss court on the challenge of an arbitrator

If the place of arbitration is in Switzerland and the parties have not settled a procedure for the challenge of arbitrators, the court at the place of arbitration has jurisdiction to decide on the challenge. No appeal is provided for against the decision, not even a "public law appeal" to the Swiss Supreme Court.

This case does not settle the issue of whether, if the Swiss court dismisses the challenge, the final award may be challenged on the ground that an arbitrator that should have been dismissed participated in the arbitration. Such a challenge of the award is possible when the challenge against the arbitrator was dismissed by an arbitration institution.

T. v. G. et Tribunal cantonal des Grisons, ATF 122 I 370, résumé in SJ 1997, 162 (1996).

The Supreme court has exclusive jurisdiction to entertain applications to revise international arbitral awards, whether interim or final

The principle that the Supreme court has jurisdiction over applications to revise international arbitral awards (an exceptional remedy created by case law for awards obtained by fraud or in ignorance of crucial facts) is a general principle applicable to all awards, including interim or preliminary decisions. This principle applies, however, only to awards binding on the arbitral tribunal: it does not apply to procedural orders, which the arbitrators may vary during the proceeding. (The Supreme Court leaves open the question of whether this holding also applies where the parties have elected to substitute the Supreme Court with the Court of Appeal of the place of arbitration, pursuant to PIL Act Article 191(2)).

Société P. v. A., ATF 122 III 492, SJ 1997, 93-96 (1996).

The appointment of an arbitrator by the Swiss court at the place of arbitration may not be appealed. However, the decision refusing to appoint an arbitrator may be appealed. The parties may choose an even number of arbitrators.

No appeal may be taken to the Supreme Court against the decision appointing an arbitrator pursuant to PIL Act Article 179. However, a denial of the application to appoint an arbitrator may be challenged in a public law appeal.

The parties are free to choose the number of arbitrators, including an even number. Absent an agreement of the parties about the deciding vote, the award can only be made by unanimous vote if there are two arbitrators. The parties must, however, have clearly expressed their intent that the award be made by unanimous vote. If the two arbitrators cannot concur, the parties will have no other option than to go to the courts. Barring exceptional circumstances, the intent of the parties is not to end up in court. In particular, the parties' intent to have a unanimous vote does not result from the mere fact that the tribunal shall consist of "not less than two arbitrators." The two arbitrators appointed having found that they were unable to decide the case, the court at the place of arbitration should have appointed a third arbitrator.

X. Inc. v. S. et consorts et Tribunal de Première Instance de Genève, ATF 121 I 81 (1995.

A party may not be compelled to arbitrate when there is no valid arbitration agreement

Pursuant to ICC Rules Article 8, unless otherwise agreed, an arbitration clause survives the main agreement, so that arbitrators retain jurisdiction to decide issues regarding contract termination. This rule does not apply, however, if the parties at the same time terminated the main agreement and, expressly or impliedly, terminated the arbitration clause. Such may be the case when the parties have made new rules about jurisdiction with respect to the same substantive legal relationship.

The severability of the arbitration clause does not apply when the reason for the end of the main agreement also applies to the arbitration clause contained therein, as for instance in the case of fraud, mistake or duress. Whether the case is brought before an arbitral tribunal or a court, such tribunal or court must decide on its jurisdiction (potential conflicts of jurisdiction must be resolved according to the rules about lis pendens, res judicata or recognition of foreign decisions). If the validity of the arbitration clause turns on the existence and validity of the main contract, the tribunal or court where the case is brought must review the main agreement without limitation in order to reach a decision on jurisdiction.

Société G. v. X. AG et Tribunal arbitral, ATF 121 III 495, résumé in SJ 1996, 385-38 (1995).

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