Swiss Federal tribunal, 1st Court of civil law, 24 May 2018, A. v. B., 4A_491/2017

A Russian company, A. (“Company A.”), and an Austrian company, B. (“Company B.”), entered into agreement stipulating that the Austrian company would manufacture and deliver, one by one, five machines for use in the railways sector. The purchaser was entitled, in accordance with a clause in the contract, to terminate the contract unilaterally in the event of a delay of more than 90 days in the delivery of a machine. The arbitration clause of the contract stipulated that disputes were to be decided by an arbitral tribunal governed by the UNCITRAL Rules, with its seat in Zurich and designated in particular the Swiss law and the United Nations Convention on Contracts for the International Sale of Goods as applicable law.

According to Company A., Company B. did not duly deliver the machine. As a result, Company A. initiated arbitration proceedings. In its award of 28 July 2017, the arbitral tribunal found that the contract in this case was not a contract of sales, but a contract of enterprise, and that its termination was not well-founded.

Subsequently, Company A. brought an action for annulment of the award on the ground that the arbitral tribunal had violated its right to be heard on the one hand and that the award was not compatible with Swiss public policy on the other hand.

The Swiss Federal Court recalls that it should not be confused with an court of appeal. Thus, if the right to be heard is a ground for annulment of an arbitral award, Claimants are precluded from using it as a disguised means to challenge the establishment by an arbitral tribunal of facts and, indirectly, the legal conclusions it draws from them. Finally, the arbitral tribunal’s conclusions on the improper termination of the contract by Company A. cannot be considered as violation of the principle of contractual fidelity, part of the Swiss public policy. The challenge is dismissed in its entirety.

2018-07-02T15:16:12+00:00 May 24th, 2018|Swiss Federal Tribunal, Swiss jurisdictions|0 Comments

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