The Supreme Court recently annulled an arbitral award for failure to comply with a mandatory pre-arbitration requirement. It held that failure to comply with such a requirement leads to the suspension of the arbitration proceedings until the requirement has been complied with. Despite holding that there may not be a solution applicable to all cases, the decision provides some legal certainty regarding the consequence of failure to comply with a mandatory pre-arbitration requirement.
In a recent decision, the Supreme Court found that an arbitral tribunal may have jurisdiction based on the arbitration agreement contained in a draft contract. The court made clear that the principle of autonomy of the arbitration clause can apply even if the main contract never came into existence and that the invalidity of the main contract may actually affect the validity of the arbitration clause.
A recent decision confirms that the Supreme Court continues to rely on its well-established practice regarding the parties' right to be heard. However, this practice may be perceived to be quite strict for the party that must accept the arbitral tribunal's (sometimes unjustified) refusal to examine the arguments submitted to it, as the court itself acknowledged.
In a recent decision the Supreme Court partially annulled a Court of Arbitration for Sport arbitral award for violation of the plaintiff's right to be heard. This decision confirms that in specific circumstances, arbitral awards may be partially annulled. It also clarifies that public policy does not prevent parties to arbitration from agreeing to limit the arbitrators' power to review the case.
The Supreme Court recently issued a new decision dealing with the principle of res judicata. The decision makes clear that the liberal approach advocated when assessing the identity of the parties should not apply when assessing the identity of the claims. It further seems to exclude application of an international concept of res judicata in Switzerland.
The Supreme Court has confirmed that there is no incompatibility with public policy where a Swiss arbitral tribunal ignores a foreign decision which, although vested with final and binding effect in the country of origin, cannot be recognised in Switzerland under the New York Convention. This decision confirms the well-settled principle that res judicata is public policy.
The Supreme Court has confirmed that bribery may constitute a ground for annulment of arbitral awards, to the extent that bribery is established and the arbitral tribunal has refused to consider it in the challenged award. In this case, the tribunal found that proof of objectionable conduct on the claimant's part had not been submitted and reiterated that the principle that criminal law has precedence over civil law is not part of procedural public policy.
The Supreme Court recently held that procedural orders on the discontinuation or stay of arbitration proceedings cannot be challenged, unless they contain an implicit decision on jurisdiction. When drafting procedural orders on the discontinuation or stay of arbitration proceedings, arbitrators should indicate whether they intend to make any final determination as to jurisdiction, so parties have no doubt as to the challenge being available.
In a decision that provides guidance to parties bound by the General Conditions of the International Federation of Consulting Engineers in respect of dispute adjudication board (DAB) pre-arbitration duty, the Supreme Court recently held that DAB pre-arbitration procedure qualifies as a mandatory pre-arbitration step. However, such a step cannot be relied on in case of an excessive delay in the constitution of the DAB.
The Supreme Court recently confirmed an arbitral award which had denied the res judicata effect of a foreign court decision on the ground that the foreign court did not analyse the question submitted to the arbitrators. The decision provides detailed guidance on res judicata and does not close the door to an assessment of the party-identity requirement that is not strictly formalistic.
The Supreme Court recently partially set aside an arbitral award on the grounds that the arbitral tribunal had wrongly denied jurisdiction over the non-signatory parent of a party to the arbitration agreements on which the arbitration proceeding was based. The court found that this parent had become a party to the arbitration agreements based on the principle of good faith.
The principle of autonomy of arbitration agreements provides that an arbitration clause represents a standalone agreement. In a recent decision, the Supreme Court confirmed that the termination of the arbitration agreement must have no effect on the main agreement. Parties which would like to derogate from this rule should say so expressly in the arbitration agreement.
The Supreme Court recently confirmed that an arbitral award may be annulled if the sole arbitrator was not properly appointed. This ground for challenge was not limited to the grievance of the arbitrators' lack of independence and impartiality, but included the possibility to invoke a breach of the parties' agreement on the tribunal's constitution. Such challenge must be brought immediately.
The Supreme Court recently refused to review the merits of a challenge against an arbitral award in which the arbitrators had declined jurisdiction after having established the parties' common intent to terminate the arbitration agreement. The court rejected the plaintiffs' argument that the arbitral tribunal had violated their right to be heard in issuing a decision which would have taken them by surprise.
When administering an arbitrator's challenge the International Court of Arbitration of the International Chamber of Commerce endeavours to ensure compliance with due process fundamentals. The Supreme Court recently confirmed that such a process was, in principle, consistent with the right to be heard guaranteed under the New York Convention.
An athlete recently challenged a two-year ban before the Supreme Court on the grounds of infringement of the right to be heard. The athlete argued that the arbitrators had ignored the subsidiary argument developed in his written submission. However, the defendant had established that the argument was immaterial to the resolution of the dispute. The court denied any breach of the right to be heard and dismissed the challenge.
The Supreme Court recently annulled an arbitral award on the grounds that the arbitrator had failed to explain why it had not taken into account the deductions submitted by a financial expert and respondent (violation of the right to be heard). The court reiterated the principles regarding the test for arbitral awards to comply with the parties' right to be heard. It also stated that, in specific circumstances, an award may be annulled partially.
The Supreme Court recently confirmed that a mandatory provision of foreign law should be taken into consideration by an arbitral tribunal sitting in Switzerland when deciding whether a claim may be subject to arbitration. The court recalled that the arbitrability of a specific claim may be denied if foreign legal provisions submit such a claim to the state courts' mandatory jurisdiction, provided that these provisions belong to public order.
The Swiss Supreme Court recently confirmed that an ad hoc arbitral tribunal seated in Geneva was regularly constituted within the meaning of the Private International Law Act where French courts had appointed the co-arbitrator of the Israeli respondent in the arbitration proceeding. The domestic court seized to appoint the co-arbitrator was located in France and not Switzerland, which the parties had then chosen as the seat of arbitration.
The Supreme Court recently rendered decisions in four arbitration-related cases. The issues under discussion included settlement and the pacta sunt servanda principle, whether an international arbitral award must be reasoned, legal capacity and waiver of a reasoned award.