Tavernier Tschanz updates

Article 6(1) of ECHR is not separate ground to challenge arbitral awards
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 12 November 2020

In a recently published decision, the Supreme Court dismissed a challenge against an arbitral award issued by the Court of Arbitration for Sport on preliminary objections. The Supreme Court held, among other things, that Article 6(1) of the European Convention on Human Rights is not a separate ground to challenge arbitral awards rendered in Switzerland. The court also determined whether a violation of Article 2 of the Civil Code renders an award per se incompatible with substantive public policy.

Supreme Court will not review findings that parties lacked actual and common intent to arbitrate
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 10 September 2020

In a recently published decision, the Supreme Court upheld an arbitral award in which the arbitral tribunal had declined jurisdiction in the absence of a valid arbitration agreement. The court confirmed that it does not review arbitral tribunals' findings as to the parties' actual and common intent to arbitrate. In addition, it held that it cannot review an arbitral tribunal's findings of fact and outlined the exceptional circumstances needed for it to review a challenge of jurisdiction.

First annulment of investment arbitration award by Supreme Court
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 02 July 2020

In a recently published decision, the Supreme Court – for the first time – partially annulled an arbitral award issued in an investment arbitration. A Geneva-based arbitral tribunal, which was constituted under the United Nations Commission on International Trade Law Arbitration Rules, had wrongly declined jurisdiction to decide an investment treaty claim brought by Clorox España SL against Venezuela.

One transaction but multiple arbitration agreements: extent of jurisdiction
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 07 May 2020

The Supreme Court recently confirmed an arbitral tribunal's broad interpretation of the objective scope of an arbitration agreement contained in a quality assurance agreement (QAA) to cover disputes which were unrelated to the QAA but arose within the contractual relationship of the parties thereto.

Partial annulment of award based on ultra petita grounds
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 20 February 2020

A recent case addressed the partial annulment of an award which granted damages where the prayer for relief sought only a declaration (ultra petita). In addition to confirming the well-established line of decisions on penalty and substantive public order, this decision is among the few annulments, albeit partial, of an international award by the Supreme Court.

State-owned entity's consent to arbitrate does not bind state – in principle
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 19 December 2019

According to a recent Supreme Court decision, the fact that a party to an arbitration agreement is fully owned by a state is insufficient grounds to have that agreement extended to said state. Therefore, an arbitration agreement concluded by a state-owned entity does not necessarily bind the state itself. In order to do so, the arbitration agreement must be extended to the state.

Supreme Court annuls award for second time in same arbitration dispute
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 29 August 2019

In principle, if an application for an annulment of an arbitral award is upheld, the Supreme Court may cancel only the award (the so-called 'cassatory' nature of the setting aside proceeding). However, as shown by a recent decision, the Supreme Court's findings underlying a cancellation for the violation of a party's right to be heard seem to qualify as directions for the arbitral tribunal which must remake the decision.

Award upheld despite violation of right to be heard
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 09 May 2019

The formal nature of the right to be heard has long been recognised by the Supreme Court. Applied strictly, it entails that an award affected by a violation of such right must be set aside, irrespective of whether the violation affected the outcome of the case. However, the Supreme Court's more recent practice tends to depart from a strict application of the formal nature of the right to be heard and to require the applicant to establish a causal link between the asserted violation and the (adverse) outcome of the case.

Award partially set aside due to tribunal's unexplained choice between two contradictory findings
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 21 February 2019

The Supreme Court recently set aside an arbitral award issued in a domestic arbitration on the grounds that the arbitral tribunal had drawn consequences from one of two contradictory findings without providing any reasons for its decision. Considering that the test to admit a violation of the right to be heard is the same in domestic and international arbitrations, this decision may be relevant to international arbitration, even though it pertained to domestic arbitration.

Arbitral award against foreign state requires sufficient domestic connection with Switzerland
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 20 December 2018

The Supreme Court recently dealt with the issue of state immunity in the context of the enforcement of an arbitral award and with the relationship between Swiss procedural law and the New York Convention. It found that state immunity prevents the enforcement of an arbitral award against a foreign state if there is no sufficient connection between the claim and Switzerland, and that this situation does not conflict with Switzerland's obligations under the New York Convention.

Supreme Court provides useful considerations for challenge proceedings
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 11 October 2018

The Supreme Court recently rejected a challenge against a partial arbitral award for an alleged violation of the right to be heard and incompatibility with substantive public policy. The case pertained to a contract under which an Austrian company was to supply railway machinery to a Russian company. In its reasoning, the court made a number of considerations which practitioners should bear in mind when challenging an arbitral award.

Arbitral jurisdiction to decide claims secured by a retention right confirmed
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 26 July 2018

The Supreme Court recently confirmed its jurisdiction to decide claims secured by a retention right as provided for by Swiss law. The court found that even if the arbitration agreement rather restrictively referred to disputes arising out of the mandate agreement, it had to be understood in good faith as also encompassing disputes in relation to the conclusion and termination of that agreement.

Award set aside for lack of jurisdiction
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 10 May 2018

In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the arbitral tribunal had wrongly accepted jurisdiction. Once the existence of an arbitration agreement is established, its scope and content are broadly construed under the assumption that, if they chose to enter into an arbitration agreement, the parties intended to have an arbitral tribunal with broad jurisdiction.

Award set aside for lack of consent to arbitrate
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 22 February 2018

In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the parties had not consented to submit their dispute to arbitration. The decision shows the importance of the distinction between a subjective and objective interpretation. Awards should thus clearly identify for each finding of contractual interpretation whether it stems from subjective or objective interpretation.

Supreme Court reconfirms requirements for appointment of independent tribunal expert
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 07 December 2017

In a recently published decision, the Supreme Court rejected a challenge on the basis that the arbitral tribunal's refusal to appoint a tribunal expert was not a violation of the applicant's right to be heard. With respect to the annulment proceedings and grounds for annulment, this decision seems to express limitations to the formal nature of the right to be heard in adversarial proceedings, at least in respect of the right to adduce evidence.

Supreme Court rules on waiver of challenge
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 30 November 2017

In a recently published decision, the Supreme Court held that an arbitration clause contained a valid waiver of challenge against the award. The court also held that such a waiver extended to the applicant's subsidiary request for revision. When interpreting arbitration clauses to determine whether they contain such a waiver, the term 'appeal' should be understood as referring to the remedy that parties have against an award in Switzerland, namely the challenge proceedings.

Supreme Court partially annuls award for violation of right to be heard
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 14 September 2017

In a recently published decision, the Supreme Court partially annulled an award on the grounds that the arbitral tribunal had failed to take into account the claimant's argument in support of one of its prayers for relief. The dispute arose in connection with a tourism project regarding the construction and operation of a hotel and casino in the West Bank. The agreement was governed by Swiss law and provided for arbitration in Zurich.

Ex post short extension to file statement of claim is no ground for challenge
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 25 May 2017

The Supreme Court recently refused to interfere with a sole arbitrator's decision to extend the timeframe to file the statement of claim. The question may arise again at the enforcement stage in the context of Article V(1)(d) of the New York Convention, which provides that recognition and enforcement of an award may be refused, among other things, if "the arbitral procedure was not in accordance with the agreement of the parties".

Recent decisions on public policy
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 23 March 2017

According to four recent arbitral decisions, the concept of 'public policy' does not depend on the nature of the underlying dispute; the transfer of bribes is incompatible with public policy only to the extent that bribery is established but not taken into account by the arbitral tribunal; the violation of personality rights is not incompatible with public policy, unless there is a serious violation of fundamental rights; and the rules on the burden of proof are not part of public policy.

Revision of arbitral award granted for discovery of new evidence
Tavernier Tschanz
  • Arbitration & ADR
  • Switzerland
  • 26 January 2017

The Supreme Court recently admitted a request for revision of an arbitral award based on the subsequent discovery of new evidence in relation to bribery. The court recalled that the revision of arbitral awards can be sought based on the Federal Tribunal Statute and that, among other things, newly discovered evidence must prove either newly discovered facts or facts that were already known in the main proceedings but remained unproven.

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