Appointment of arbitrators by ordinary courts - Non-existence of arbitration clause

Case information
September 23, 2008
4A_215/2008
Interest to foreign readers: 
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Of some interest
Topics: 
Arbitration clause
Appointment of arbitrator
Original language: 
French
Published: 
27 ASA Bull 114 (2009)
also see 2 SwissIntArbRep 361 (2008)

Parties

Respondent: 

Counsel

Appellant: 
Introductory note: 

The case involved a sports arbitration in Lausanne, in which two Argentinean agents had been entrusted with negotiating the transfer of a player to the Spanish club Real Madrid. The transfer was not completed due to a negative medical report. The agents filed a claim with FIFA for fees, which was rejected. On February 29, 2008, the Court of Arbitration for Sports ("CAS") upheld the dismissal of the claim. The CAS arbitral tribunal was chaired by Prof. Massimo Coccia with Mr. D. Herman Jorge Ferrari and Prof. Miguel A. Fernandez-Ballesteros as arbitrators.

The CAS award was appealed to the Federal Tribunal, claiming (i) illegal composition of the arbitral tribunal, due to an alleged close relationship between counsel for one of the parties and the CAS (ii) a violation of due process ("right to be heard") and (iii) a violation of public policy.

The Federal Tribunal rejected the appeal and the opinion contains some mildly interesting developments:

(i) Whilst reiterating that lack of independence or objectivity does cause an arbitral tribunal to be "illegally composed", the Federal Tribunal is also reiterating what it already said in previous decisions relating to the CAS, namely that a challenge against an arbitrator must be made immediately under penalty of foreclosure. This was not the case here. (See at  § 3).

(ii) The Federal Tribunals is also reminding the readers that even on the assumption that a factual finding would be completely wrong, this would not be sufficient per se to annul an international arbitral award. As the Court puts it, “the right to be heard contains no right to a materially accurate decision”. This may or may not be going too far in protecting arbitrators, depending on one’s point of view, but the point made by the Court is that the omission must be tantamount to a denial of the right to present and prove one’s point of view as to an issue relevant to the determination of the case. Clearly, the standard is very high and litigants seeking to challenge a factual finding in a Swiss appeal will be well advised to make sure they have a particularly flagrant case to argue. (See § 4)

(iii)            Finally, from a public policy point of view, the Court reiterates that the rule of pacta sunt servanda is not violated if the arbitrators interpret a contract wrongly, thus not granting a claim based on that contract. Pacta sunt servanda is violated only to the extent that the arbitrators would acknowledge the existence of a binding contract and refuse to apply it or apply a contract after finding that it was inexistent or not binding. Here too, the burden is practically impossible to meet for the appellant and it is safe to assume that an international award will never be annulled on that ground by the Federal Tribunal. (See § 5)

This being said, the decision is not of fundamental importance. It is not particularly original or innovative and it essentially confirms what the court already said in previous decisions.

Translation: 

4A_215/20081

Judgement of September 23, 2008

 

First Civil Law Division

 

Federal Judge CORBOZ, Presiding

Federal Judge KLETT (Mrs)

Federal Judge ROTTENBERG LIATOWITSCH (Mrs)

Federal Judge KOLLY

Federal Judge KISS (Mrs)

Clerk of the Court: CARRUZZO

 

X.________, in liquidation

Appellant,

Represented by Mr Laurent PANCHAUD

 

v.

 

Y._______,

Respondent,

Represented by Mr Daniel TUNIK and Mr Miguel OURAL

 

 

Facts:

 

A.

On May 25, 2007 X._______ in liquidation (“X.________”), a Portuguese company, applied to the Tribunal of First Instance of the Canton of Geneva for the appointment of an arbitrator. The Petitioner indicated that it had a claim for USD 948’460.- plus interest against a Spanish company Y._______ SA (“Y._______”), for breach of a cooperation agreement concluded with that company on March 7, 1997. According to X._______, the dispute was to be submitted to an arbitral tribunal consisting of three arbitrators, sitting in Geneva, by virtue of an arbitration clause inserted in the aforesaid agreement. The Petitioner pointed out that it had appointed its arbitrator, who had accepted his appointment, but that its contractual counterpart refused to appoint its own.

 

Denying the existence of an arbitration clause because the corporation agreement dated March 7, 1997 had remained a mere draft, Y._______ opposed X._______’s petition.

 

By judgement of January 4, 2008, the Tribunal of First Instance rejected the petition on the basis of Art. 179 (3) PILA2, finding that the Parties were not bound by an arbitration clause.

 

 

B.

On January 18, 2008, X.______ filed an appeal against the judgement it had received on January 8, 2008.

 

Y.______ submitted that the matter was not capable of appeal and alternatively that the appeal should be rejected.

 

In a decision of April 3, 2008, the Court of Justice of the Canton of Geneva found that the matter was not capable of appeal and ordered X.______ to pay the costs. In short, it held that the Geneva Rules of Procedure provide for no appeal against a refusal by the court to appoint an arbitrator.

 

 

C.

On May 9, 2008, in the same brief, X.______ filed a civil law appeal and a subsidiary constitutional appeal. It presented several submissions, substantially seeking an annulment of the decision under appeal by the Federal Tribunal, the appointment of Y.______’s arbitrator, an invitation to the two arbitrators to choose a Chairman and an order that the Arbitral Tribunal should entertain various issues spelled out by the Appellant. Alternatively, the Appellant submitted that the matter should be sent back to the Cantonal Court for a new decision consistent with the Federal decision. In a further alternative submission, X.______ submitted that the time limit should be reinstated in order to make it possible for the Appellant to appeal to the Federal Tribunal against the decision of the Tribunal of First Instance by way of a new time limit to appeal.

 

The Respondent principally submitted that the matter was not capable of appeal and in the alternative that it should be rejected. The Cantonal Court made reference to the reasons in the decision under appeal.

 

By decision of June 12, 2008, the presiding Judge of the First Civil Law Court rejected a request for security for costs submitted by the Respondent.

 

 

Reasons:

 

1.

1.1 The decision under appeal, which was issued by the highest Cantonal Court in a cantonal proceeding of last instance (Art. 75 LTF)3, is a final decision (Art. 90 LTF). Indeed, the Geneva Court of Justice found that the matter was not capable of appeal by the Appellant because, in the Court’s opinion, that type of decisions are not subject to a cantonal appeal (see decision 4P_113/1994 of January 10, 1995 at 1, reproduced in Swiss Arbitration Association Bulletin [ASA] 1995, p. 227). It has already been held that a federal appeal is open against that type of decisions irrespective of whether or not the decision on the merits, such as the appointment of an arbitrator, may or may not be appealed to the Federal Tribunal (see decision 4P_63/1995 of June 20, 1995 at 2).

 

By virtue of Art. 72 LTF, the Federal Tribunal has jurisdiction in appeals against decisions issued in civil matters. The decision under appeal follows a petition filed by the Appellant with a view to appointing an arbitrator and constituting an arbitral tribunal called upon to decide a dispute in an international arbitration matter as referred to at Art. 176 ff. PILA4. The field of international private law undeniably falls within civil matters. The provision in this respect in the Federal Statute organising the Federal Tribunal, namely Art. 77, was indeed included in those which deal with civil law appeals (Art. 72 to 77 LTF). It is therefore in that way that the decision under appeal could be submitted to the highest judicial authority of the Confederation.

 

Relying on the decision published at ATF 118 Ia 20, the Respondent argues that the refusal to appoint an arbitrator is not a decision issued in a civil dispute, but an act of sovereignty, against which the Statute Organising Federal Courts (“OJ”), now abrogated, merely provided for a public law appeal (Art. 84 ff OJ). From that, the Respondent deducts that such a decision having not changed in nature under the aegis of the new federal law of procedure, it may be appealed only by way of a subsidiary constitutional appeal. In that argument, the Respondent looses sight of the fact that the federal legislature deliberately chose not to maintain the distinction between “civil disputes” and “civil matters” at Art. 72 to 77 LTF. Therefore, it does not matter, in the new system, whether the procedure in which a civil law appeal is contemplated is adversary or non-contentious (Denis Tappy, Le recours en matière civile, in La nouvelle loi sur le Tribunal fédéral, CEDIDAC n° 71, p. 55 s., n. 13). Thus, the decision whereby a court refuses to appoint an arbitrator may be appealed to the Federal Tribunal by way of a civil law appeal, although it is in the realm of non-contentious proceedings (Gabrielle Kaufmann-Kohler/Antonio Rigozzi, Arbitrage international, n. 316; Bernhard Berger/Franz Kellerhals, Internationale und interne Schiedsgerichtsbarkeit in der Schweiz, n. 781). It is not different for the decision under appeal, which found that the matter was not capable of a cantonal appeal after such a refusal. Moreover, it is not necessarily to decide here whether or not the non-contentious character of the procedure concluded by that decision would dispense the civil law appeal from the requirement of a minimum value in dispute (in that sense, see Kaufmann-Kohler/Rigozzi, ibid.); neither, in more general terms, or whether or not that requirement also applies in the field of international arbitration. Indeed, the minimum amount in dispute set at Art. 74 (1)(b) LTF is reached in this matter anyway.

 

In view of the foregoing, the matter is not capable of a subsidiary constitutional appeal (Art. 113 LTF).

 

1.2 The Appellant has a personal, present and legally protected interest to ensure that the refusal to submit to the Court of Justice the decision rejecting its petition to appoint an arbitrator was not decided in violation of the law within the meaning of Art. 95 LTF and that gives it standing to appeal (Art. 76 (1) LTF).

 

Timely filed (Art 100 (1) LTF) in the required format (Art. 42 (1) and (2) LTF, Art. 119 (1) LTF), the matter is therefore capable of appeal.

 

1.3 A civil law appeal may be made for violation of federal law (Art. 95 (1) LTF) including constitutional rights (ATF 133 III 446 at 3.1, p. 447; 462 at 2.3). However, the appeal may not be based on the violation of cantonal law as such. Yet, it is possible to claim that the erroneous application of cantonal law constitutes a violation of federal law, particularly that it is arbitrary or violates other constitutional rights (ATF 134 III 379 at 1.2, p. 383; 133 III 462 at 2.3). The violation of fundamental rights is reviewed only to the extent that the Appellant raises that ground and reasons it (Art. 106 (2) LTF).

 

Seized of a civil law appeal, the Federal Tribunal issues its decision on the basis of the facts established by the lower court (Art. 105 (1) LTF). It may depart from them only if they were established in a manifestly erroneous manner – a concept tantamount to arbitrariness (ATF 134 V 53 at 4.3) – or in violation of the law within the meaning of Art. 95 LTF (Art. 105 (2) LTF), which the Appellant must demonstrate clearly and appropriately.

 

 

2.

The Appellant raises various grounds spelled out and summarized at Chap. V of its brief. It claims that the Court of Justice violated the principle of equality (Art. 8 Cst.5) by way of a distinction and an assimilation, both untenable, and by modifying its previous jurisprudence without valid grounds. Also, it would have disregarded the constitutional principle of primacy of federal law (Art. 49 (2) Cst.) and more specifically Art. 179 (2) PILA; its interpretation of the Geneva Rules of Procedure would be arbitrary (Art. 9 Cst.); finally, it would have violated the rule of good faith (Art. 9 Cst.), by failing to warn of the change in jurisprudence which it was about to make and by ordering the Appellant to pay the costs of the proceedings without regard to the change of jurisprudence it had engaged into. First it will be necessary to review whether or not the lower courts interpreted the pertinent provisions of Geneva law arbitrarily (hereunder at 3). Should this not be the case, it will be examined whether or not those provisions, interpreted in a tenable way by the cantonal judges, did not violate the primacy of federal law (hereunder at 4). Should this not be the case, it will still be necessary to review whether or not the result to which the cantonal judges arrived created unequal treatment and, if so, whether or not there is a reason, such as an admissible change of jurisprudence, making such inequality consistent with Art. 8 Cst. (hereunder at 5). It may also be necessary to ensure that such a change of jurisprudence complies with the principle of good faith contained at Art. 9 Cst. with regard to how it was implemented (hereunder at 6).

 

 

3.

3.1 The Appellant claims that the decision under appeal applies cantonal law in a way that is arbitrary and contrary to the principle of equal treatment. According to the Appellant, the Court of Justice would have disregarded the intent of the Geneva legislature, which intended to rule out a cantonal appeal only against a decision appointing an arbitrator but not for one which would refuse to do so. In such a case, excluding a cantonal appeal would go against the intent of the law, which is to facilitate and to accelerate the constitution of an arbitral tribunal, as this would be tantamount to making impossible any challenge against a decision blocking the process.

 

3.2

3.2.1 The law must be interpreted first according to its letter (literal interpretation). If several interpretations are possible, the court shall ascertain the true meaning of the norm from its relationship with other legal provisions and its context (systematic interpretation), from the goal pursued, specially the interest protected (teleological interpretation), as well as from the intent of the legislature as it appears, among others, from the travaux préparatoires (historical interpretation; ATF 131 III 623 at 2.4.4, p. 630; 314 at 2.2). The meaning of the provision in its context is also important (ATF 131 II 361 at 4.2. p, 368; 130 II 65 at 4.2, p. 71). When called upon to interpret a law, the Federal Tribunal adopts a pragmatic position and follows a plurality of methods, without assigning any priority to the various means of interpretation (ATF 133 III 257 at 2.4, p. 265 f; 131 III 623 at 2.4.4, p. 630 and cases quoted).

 

As to the interpretation and application of cantonal law, arbitrariness and violation of the law must not be confused. A violation must be manifest and immediately apparent to be considered as arbitrary. The Federal Tribunal does not have to decide which is the correct interpretation that the cantonal authority should have given to the applicable provisions; the court will only state whether or not the application or the interpretation of cantonal law which was made is defensible. There is no arbitrariness merely because another solution appears equally conceivable, or even preferable (ATF 133 III 462 at 4.4.1 and cases quoted).

 

3.2.2 Art. 461 (B)(a) of the Geneva Rules of Civil Procedure (“GRCP”) gives jurisdiction to the Tribunal of First Instance to appoint arbitrators. Par. 2 of that provision refers, among others, to Art. 458 GRCP, which states that the Tribunal of First Instance issues its decision in summary proceedings and “as a last resort”. First instance judgments issued in last resort are, in principle, subject to an extraordinary appeal as provided by Art. 292 GRCP. Notwithstanding that provision, the Court of Justice, based on the historical intent of the legislature, nonetheless ruled out the possibility to make such an appeal against the decisions nominating arbitrators (decision of March 3, 1994 reproduced in SJ 1994 p. 446 ff.). In deciding a public law appeal, the Federal Tribunal found that the Cantonal court had not interpreted Art. 458 (1) GRCP in an untenable way (decision 4P_113/1994 of January 10, 1995, reproduced in ASA Bulletin 1995 p. 227 ff., at 2b/aa). At the same time, the Federal Tribunal entertained a public law appeal relating to a decision refusing to appoint a third arbitrator after finding, by reference to the cantonal decision previously quoted, that the Geneva legislature ruled out an appeal against the decisions nominating an arbitrator (ATF 121 I 81 at 1a).

 

3.2.3

3.2.3.1 According to the Appellant, the cantonal court departed from the clear text of Art. 458 (1) GRCP without valid reason. This is inaccurate, already because the wording “as a last resort”, contained in that text, may have several meanings. It is worth noticing in this respect that in its current meaning, the expression is defined as follows: “after other means have been exhausted; in last instance, without any possibility of recourse, of appeal” (Le Robert online at “resort”, n.1 in fine). This means that the wording “as a last resort” is not one-sided since, in one of its meanings, it is a synonymous of “as a last instance”. This also means that by giving it such a meaning, the cantonal judges did not depart from the letter of the law. Finally it means that the provision at hand is subject to interpretation, with a view to giving to the words “as a last resort” another meaning than that which they normally have in Geneva Civil Procedure, specifically at Art. 292 GRCP, as the Federal Tribunal pointed out in the previously quoted decision 4P_113/1994 (at 2b/aa).

 

3.2.3.2 Art. 179 (2) PILA states that the Court called upon to appoint an arbitrator shall apply by analogy the provisions of cantonal law on the appointment, dismissal and substitution of arbitrators. Art. 461 B (2) GRCP refers in this respect to the rules of cantonal law in Concordate arbitrations6. The Inter-cantonal Concordate on Arbitration (“ICA”) provides for but does not impose the jurisdiction of the highest ordinary civil court of the canton to appoint arbitrators, whilst reserving Art. 45 (2) ICA, whereby the cantons may give this competence to another judicial authority. The Geneva legislature used that power at Art. 458 GRCP and transferred jurisdiction to appoint arbitrators to the Tribunal of First Instance, which decides “as a last resort”. During the debate in Parliament, the MP reporting on the work of the Ad-hoc Committee stated the following (transcript of the sessions of the Grand-Counsel7, 1970, p. 2704):

 

“That ratification requires a complete redrafting of the provision of the rules of civil procedure relating to arbitration, particularly with regard to the summary proceedings as to the judicial appointment of arbitrators and, in view of the suppression of the appeal, the indication that the judgment is issued as a last resort (Art. 370 GRCP), the appeal for violation of the law of Art. 36 (f) of the Concordate guarantees the rights of the parties sufficiently.”

 

Since the view taken by the MP reporting on the work of the Committee was not challenged by the other MPs the Court of Justice deducted from that that the Geneva legislature intended to rule out the possibility of a cantonal appeal against the decision appointing an arbitrator, whilst reserving a possible appeal seeking the annulment of the award itself and the Federal Tribunal concluded that such an interpretation was not at all untenable (decision quoted 4P_113/1994, at 2b/aa).

 

According to the Appellant, the intent expressed by the Geneva legislature in 1970 merely concerned the appointment of an arbitrator by the court and not a refusal to appoint an arbitrator. Indeed, had this not been so, the appeal seeking the annulment of the award would not have been reserved as a sufficient guarantee of the rights of the parties, since no award may be issued if the court refuses to appoint an arbitrator. Thus, from the Appellant’s point of view, the Court of Justice could not depart from the clear text of the law by resorting to the same historical interpretation to rule out any cantonal appeal against the decision of the Tribunal of First Instance refusing to appoint an arbitrator. The Appellant’s thesis is not groundless as such. This, however, is not sufficient to dispose of the issue.

 

If considered in a broader perspective, the opinion of the MP reporting on the work of the Ad-hoc Committee, reproduced above, certainly expresses the idea that the Court decision as to the appointment of an arbitrator, whether positive or negative, may be challenged only to the extent necessary to safeguard the rights of the parties to the dispute. Such an idea, which applies to arbitration the fundamental principle of procedural economy, implies that the decision of the Court appointing an arbitrator may be challenged only once, whether indirectly through an appeal against the award (ATF 115 II 294 at 2d and cases quoted; however, also see the criticism raised by the legal writers quoted in ATF 121 I 81 at 1b as to as solution carrying the risk to start the entire arbitral procedure all over again) and that the refusal to appoint an arbitrator could be subject to a judicial review, which would not unduly extend the duration of the process of constituting the arbitral tribunal. Seen from that point of view, the interpretation of Art. 458 (1) GRCP, as done by the Court of Justice, does not manifestly disregard the intent of the Geneva legislature, to the extent that such an intent may be deducted from the mere statement of the MP reporting on the work of the Ad-hoc Committee, which is not sure, even though that will appear only between the lines in the statement quoted above as to a refusal to appoint an arbitrator.

 

It appears also from the decision under appeal that the Cantonal court resorted above all, if not exclusively, to a teleological interpretation of the provision involved and that in doing so it tried to ascertain the goal of the provision whilst taking into account the possibility to challenge the Court decision in front of the Federal Tribunal as well as the future codification of the issue in dispute. As to the former, it underlines that, in Geneva, the impossibility to appeal the refusal of the Court to appoint an arbitrator, pursuant to Art. 179 (3) PILA, does not prevent the constitution of the arbitral tribunal as such a decision may be appealed to the Federal Tribunal directly, thus providing for a considerable time saving. Indeed, the Appellant does not take that possible appeal into consideration when it claims that the absence of an appeal at the cantonal level against the refusal to appoint an arbitrator would not allow a party to oppose a decision, which could block the arbitral process. As to the latter, the Geneva judges pointed out that the draft Federal Code of Swiss Civil Procedure provides for a single cantonal court for the appointment of an arbitrator in an internal arbitration (Art. 354 (2)(a); FF 2006 p. 7101). The result of such teleological interpretation, which confirms that of historical interpretation, does not contain anything untenable either.

 

3.2.4 Thus, the interpretation that the Court of Justice made of Art. 458 (1) GRCP leads to a solution which is defensible to the very least. Such an interpretation is therefore not arbitrary, even though it might not be the only possible one.

 

 

4.

4.1 The Court of Justice is also blamed by the Appellant for violating federal law, specifically Art. 179 (2) PILA, to the extent that it would impose on the cantons a duty to provide for a cantonal appeal against the decisions refusing to appoint an arbitrator.

 

According to the Appellant, such an obligation on the cantons would result from the Federal Tribunal’s interpretation of Art. 176 (2) PILA in the decision published in ATF 199 Ia 421. To substantiate its argument, the Appellant quotes the following French translation of the language at 2b of that decision (JdT 1994 I 625 ff, 626):

 

“According to the majority of legal writing, it behooves cantonal law (Art. 179 (2) PILA) to provide for an appeal against the decisions refusing to appoint an arbitrator (…). That opinion must be approved.”

 

4.2 The passage quoted is of no help to the Appellant. Indeed, it is clear from the context in which it was inserted and, specially, from the preceding sentence, that the passage referred only to the issue as to whether or not a cantonal appeal against a refusal of the Court to appoint an arbitrator was admissible under the Arbitration Concordate to which Art. 179 (2) PILA refers (opinion held by a majority of legal writers) or not (opinion held by Pierre Lalive, Jean-François Poudret and Claude Reymond, in: Le droit de l'arbitrage interne et international en Suisse, n. 3 ad Art. 12 ICA, p. 83 and n. 14 ad Art. 179 PILA, p. 335). The Federal Tribunal chose the former and stated the following (ATF 119 Ia 421 at 2b, p. 423):

 

“According to the majority of legal writing, it behooves cantonal law (Art. 179 (2) PILA) to provide for a possible appeal against the decisions refusing to appoint an arbitrator (…). That opinion must be approved.”8

 

From a comparison of the original version with the French translation reproduced above, it is immediately clear that the latter does not faithfully reproduce the idea of the Federal Tribunal, particularly because it fails to translate the adjective “possible”9 in the German text. That adjective, which is a peculiar Swiss expression (see Duden, Die deutsche Rechtschreibung, 24th Ed., p. 173), and its synonymous eventuell (in French “éventuel”), is of decisive importance in that sentence, to the extent that it rules out an interpretation that it would impose on the cantons the obligation to provide for an appeal against the decision by which the lower court would refuse to appoint an arbitrator.

 

Moreover, should any doubt remain in this respect, it would have been resolved in a subsequent decision of July 17, 1998 (case 4P_108/1998) in which the Federal Tribunal again disregarded the minority opinion held by Professors Lalive, Poudret and Reymond in the following terms (at 1b):

 

“However, that is not the point of view of prevailing jurisprudence and legal writing. Indeed, the Federal Tribunal, referring to several legal writers, held that a set of rules providing for a cantonal appeal, whether ordinary or extraordinary, against a decision refusing to appoint an arbitrator pursuant to Art. 179 PILA is not contrary to the provisions of the Arbitration Concordate to which Art. 179 (2) PILA implicitly refers. It joined the opinion according to which the cantons are empowered to provide for a cantonal appeal against the decisions refusing to appoint an arbitrator (ATF 119 Ia 421 at 2b). That jurisprudence was subsequently confirmed (see decision of January 10, 1995 in the case A.________ Ltd published in ASA Bulletin 1995, at 2a, p. 227).

 

This being said, the alleged violation of Art. 179 (2) PILA is not substantiated.

 

 

5.

Moreover, according to the Appellant, the decision under appeal would create unequal treatment because it gave different treatment to two cases – the case at hand and a similar previous matter – requiring identical treatment whilst also treating two cases – this case and a previous case relating to the appointment of an arbitrator – in the same way although they required different treatments.

 

5.1 Art. 8 (1) Cst. states that all human beings are equal in front of the law. The principle of equality thus formulated and the protection against arbitrary actions guaranteed by Art. 9 Cst. are closely bound. A decision is arbitrary when it does not rely on any serious and objective grounds or has neither sense nor goal. It violates the principle of equal treatment when it establishes legal distinctions justified by no reasonable ground considering the factual situation or when it fails to draw the necessary distinctions under the circumstances, namely when that which is similar is not treated similarly and that which is different is not treated in a different way. The unjustified different or similar treatment must relate to important facts. Whether or not there is a reasonable motive to make a distinction may receive different answers according to the times or the dominating ideas (ATF 133 I 249 at 3.3 and cases quoted). Unequal treatment thus appears as a peculiar form of arbitrariness consisting in giving unequal treatment to that which should receive similar treatment or conversely (ATF 131 I 349 at 4.2 and cases quoted).

 

At first sight, a judicial authority changing its jurisprudence gives unequal treatment because it contradicts itself by taking different decisions in two identical situations. However, Art. 8 Cst. cannot result in compelling to maintain a solution which, at a given time, appears less satisfying than another. Accordingly, a change in jurisprudence is consistent with Art. 8 Cst. under certain conditions (Andreas Auer/Giorgio Malinverni/Michel Hottelier, Droit constitutionnel suisse, vol. II, n. 1072). Such is the case when the change relies on objective reasons, such as a more precise knowledge of the intent of the legislature, the change of external circumstances, a change in legal concepts or the evolution of mores (ATF 130 V 492 at 4.1 and cases quoted). However, the more constant the jurisprudence, the more demanding a court must be as to the validity of the grounds invoked (ATF 120 II 137 at 3f, p. 142).

 

5.2 The Appellant claims unequal treatment because the Court of Justice would previously have found capable of appeal a matter appealed under circumstances identical to those of the case at hand. In this respect, it relies on a decision of February 7, 1991 (ASA Bulletin 1991, p. 155 ff., 159/160).

 

The decision under appeal and the previously quoted decision do indeed reach opposite solutions, albeit in similar circumstances. From an objective point of view, this is therefore unequal treatment. However, the unequal treatment thus brought to light results from a change in jurisprudence. At this stage, a finding as to whether this change of jurisprudence was made in the decision under appeal or previously must be reserved (see 6 hereunder). The important thing here is to state that the change of jurisprudence criticized relied on objective reasons, so that the unequal treatment it created is consistent with Art. 8 Cst.

 

It must point out in this respect that the decision of February 7, 1991 is apparently the only one published on the issue in dispute before the controversial change of jurisprudence. One is therefore not faced with clear and constant case law, let alone that the published part of the decision does not contain the language relating to the capability of appeal of the decision taken pursuant to Art. 179 (3) PILA (see ASA Bulletin 1991, p. 155 ff.). Moreover, and this is decisive, it has been shown above during the examination of the issue of arbitrariness (see at 3.2.3.2) that the new jurisprudence, whilst not disregarding the intent of the cantonal legislature, rather sought to realize it in a teleological perspective, taking into account the possibility to challenge the court decision in front of the Federal Tribunal as well as the future codification of the litigious issue. Under such conditions, the Appellant may not rely on the principle of equal treatment to oppose a new jurisprudence, which arises from a change in legal concepts as to the disputed issue.

 

The ground for appeal drawn from a violation of Art. 8 Cst therefore appears unfounded as well.

 

 

6.

In a last group of arguments, the Appellant argues that the lower judges would have violated the principle of good faith by introducing the change of jurisprudence criticized without warning it in advance and that the Appellant had to bear the costs of the appeal proceedings.

 

In that argument, the Appellant loses sight of the fact that the change of jurisprudence did not take place in the decision under appeal but in a previous decision. Indeed, it is in its previously quoted decision of March 3, 1994, reproduced at SJ 1994 at p. 446 ff., that the Court of Justice departed from the jurisprudence created by the precedent of February 7, 1991, stating the principle according to which henceforth every decision as to the appointment of an arbitrator issued by the Tribunal of First Instance would no longer be the object of an extraordinary appeal and thus escape its review. There is no doubt that jurisprudence referred to the refusal to appoint an arbitrator (negative decision) as well as to the appointment of an arbitrator (positive decision). Proof of that lies in the decision of March 10, 1995 published at ATF 121 I 81, in which the Federal Tribunal made specific reference to that decision to take notice that in the case under review, the decision of the Tribunal of First Instance refusing to appoint an arbitrator had been issued in the last Cantonal court and could therefore be challenged directly in front of the Federal Tribunal by way of a public law appeal (at 1a).

 

Under such circumstances, the Court of Justice was not bound to inform the Appellant of the fact that the matter was not capable of appeal since that resulted from a decision published long ago, neither did it have to forgo imposing the costs of the appeal proceedings on the Appellant. On the basis of the foregoing, the civil law appeal appears unfounded and must therefore be rejected.

 

 

7.

Finally, the Appellant seeks restitution of the time limit necessary to make a civil law appeal against the judgement issued on January 4, 2008 by the Tribunal of First Instance of the Canton of Geneva in the case between the parties.

 

7.1 Pursuant to Art. 50 (1) LTF, if a party has been faultlessly prevented from acting within the time limit for a reason other than an irregular notification, the time limit is reinstated if the party so requests, with reasons, within thirty days from the time that the party is no longer prevented from acting; the omitted act must be carried out within that time limit. Besides the fact that it extends from ten to thirty days the time limit within which the request must be filed and the omitted act carried out, that provision does not change the requirements on the merits set forth at Art. 35 OJ for a new time limit. Therefore, case law with regard to the provision now abrogated retains its value under the aegis of the new law (Kathrin Amstutz/Peter Arnold, Commentaire bâlois, Bundesgerichtsgesetz, n. 2 at Art. 50 LTF).

 

Allowing a new time limit is subject to the party or its representative which failed to act within the time limit having committed no fault. According to case law, a party or its representative is faultlessly prevented from acting not only under an objective impossibility, such as force majeure, but also under subjective impossibility due to personal circumstances or to an excusable error (see ATF 96 II 262 at 1a, p. 265; Jean-François Poudret, COJ, n. 2.3 and 2.7 at Art. 35). Case law, which is strict in appreciating whether or not that requirement is met, requires that the reason for which action was not taken should be clearly faultless (klare Schuldlosigkeit; see decision 1P_123/2005 of June 14, 2005 published in ZBI 107/2006 p. 390, at 1.2 and cases quoted; see also Amstutz/Arnold, op. cit., n. 5 at Art. 50 LTF)

 

7.2 If the Appellant had only had at hand the decision of the Court of Justice of February 7, 1991 before receiving the decision presently appealed, it could not be blamed for not appealing to the Federal Tribunal against the judgment issued by the Tribunal of First Instance. In such a case, it would undeniably have been faultlessly prevented from acting. However, in this case, two published decisions, issued in the meantime, significantly changed the problem. One is the Geneva decision of March 3, 1994 (SJ 1994 at p. 446 ff.) and the other is the Federal decision of March 20, 1995 (ATF 121 I 81). On the basis of these two decisions, the representative of the Appellant could not reasonably assume that the decision issued by the Tribunal of First Instance was capable of an extraordinary appeal to the Court of Justice. At least he had to consider the possibility that that authority would refuse to allow the appeal and act accordingly, namely by filing a civil law appeal against the aforesaid decision with the Federal Tribunal (ATF 134 I 199 at 1.3, p. 202). Not having used that possibility results in faulty failure to act. So would be the fact to have ignored the existence of the two aforesaid decisions.

 

Accordingly, the Appellant’s request to obtain a new time limit to appeal to the Federal Tribunal against the decision issued on January 4, 2008 by the Tribunal of First Instance cannot be granted.

 

 

8.

The Appellant, which is loosing, shall pay the judicial costs relating to the Federal proceedings (Art. 66 (1) LTF) and pay the Respondent’s costs (Art. 68 (1) and (2) LTF).

 

 

Therefore, the Federal Tribunal pronounces:

 

1.  The request for a new time limit to file a civil law appeal against the judgment issued on January 4, 2008 by the Tribunal of First Instance of the Canton of Geneva in the matter between the Parties is rejected.

 

2. The matter is not capable of a subsidiary constitutional appeal.

 

3. The civil law appeal is rejected.

 

4. The judicial costs, set at CHF 5’000, shall be borne by the Appellant.

 

5. The Appellant shall pay CHF 6’000 to the Respondent as costs.

 

6. This decision shall be notified to the representatives of the Parties and to the First Section of the Court of Justice of Canton of Geneva.

 

 

Lausanne, September 23, 2008

 

In the name of the First Civil Law Division of the Swiss Federal Tribunal

 

 

The presiding Judge:                                                                          The Clerk:

 

 

CORBOZ                                                                                          CARRUZZO

 

 

 
  • 1. Translator’s note: Quote as X.________ v. Y.________, 4A_215/2008. The original of the decision is in French. The text is available on the web-site of the Federal Tribunal www.bger.ch
  • 2. Translator’s note: PILA is the most frequently used English abbreviation for the Federal Statute of December 18, 1987, on Private International Law, RS 291.
  • 3. Translator’s note: French abbreviation for the Federal Statute of June 17, 2005 organising the Federal Tribunal, RS 173 110.
  • 4. Translator’s note: PILA is the most commonly used abbreviation for the Federal Statute of December 18, 1987 on Private International Law, RS291.
  • 5. Translator’s note: Cst is the French abbreviation for the Swiss Federal Constitution RS.
  • 6. Translator’s note: This means in internal arbitrations not governed by the rules of PILA.
  • 7. Translator’s note: This means the Geneva legislature.
  • 8. Translator’s note: The text is quoted in German in the original French version of the decision.
  • 9. Translator’s note: Allfällig in the German text.