Arbitration clause survives termination. Its scope is to be interpreted liberally
The case involved a license agreement basically providing that after the license expired or if it was terminated, some provisions of the contract would remain in force but that otherwise all rights and obligations of the parties would terminate.
A dispute arose and arbitration proceedings were initiated in Zürich in August 2011 pursuant to the ICC arbitration clause contained in the 2006 license agreement. A three-member ICC arbitration tribunal was constituted (Thomas Legler chairman, with arbitrators Andrea Mondini and Michael Ritscher). In a jurisdictional award in July 2013, the Arbitral Tribunal accepted jurisdiction despite the termination.
An appeal was made to the Federal Tribunal and the following are very interesting in the opinion:
- The existence of an arbitration clause cannot be accepted lightly. The agreement to resort to arbitration and to abandon the jurisdiction of the state courts must be clearly expressed. In this respect the Court confirmed its often-expressed view. (See section 3.2 of the opinion in this respect.)
- Once the existence of an arbitration agreement has been found, its scope must be interpreted liberally. This is also in accordance with previous case law. (See section 3.2 of the opinion in this respect.)
- The severability of the arbitration clause is a cornerstone of arbitration and if a contract provides that the rights and obligations of the parties cease at termination, this will not extend to the arbitration clause unless very specifically stated in the contract. (See section 3.3.3 of the opinion in this respect.)
This judgment confirms the liberal approach of the Federal Tribunal to arbitration agreements. They must be interpreted like any other contract but once their existence has been established by factual findings or interpretation, they must be construed liberally in favour of arbitration. The autonomy of the arbitration clause is fundamental and unless clearly agreed by the parties in the main contract, the arbitration clause survives termination, irrespective of other contractual provisions.
Judgment of February 27, 2014
First Civil Law Court
Federal Judge Klett (Mrs.), Presiding
Federal Judge Kolly
Federal Judge Hohl (Mrs.)
Federal Judge Kiss (Mrs.)
Federal Judge Niquille (Mrs.)
Clerk of the Court: Leemann
Represented by Mr. Daniel Plüss and Mr. Stephan Erbe,
1. A.Y.________ AG,
2. B.Y.________ Inc.,
Both represented by Dr. Balz Gross und Stefan Gäumann,
X.________ Company (the Defendant, the Appellant) is seated in A.________ [name of city omitted]. On February 22, 2006, D.________ entered into a patent license agreement with A.Y.________ AG, B.________ (Claimant 1, Respondent 1) and B.Y.________ Inc., C.________, D.________ (Claimant 2, Respondent 2). Accordingly, X.________ could make use of various patents of A.Y.________ AG or B.Y.________ Inc. against payment of the corresponding licensing fee.
§ 4.7 of the license agreement contains a detailed provision as to the duty of X.________ to keep books and render accounts. As to the termination of the contract, § 8 contains the following:
“TERM AND TERMINATION
8.1Term. The term of this Agreement shall commence as of the Effective Date and this Agreement including the license grants contained in Article 2 herein shall continue until the date on which each and every claim of every Licensed Patent has: (a) expired or been abandoned or disclaimed, or (b) been revoked, canceled, terminated or held invalid or unenforceable by an administrative agency or court of competent jurisdiction from which no further appeal is possible or has been taken within the time period provided under the applicable law of such appeal.
(a) X.________ may terminate this Agreement with respect to all or any one or more of the Licensed Patents for any reason by written notice to Y.________ at any time during the term.
(b) Either X.________ or Y.________ may terminate this Agreement as to any one or more or all the Licensed Patents at any time upon ninety (90) days’ prior written notice to the other Party, for breach by the other Party of any of the material provisions hereof, including, but not limited to, nonpayment of royalties or other monies to be paid, provided that during such ninety (90) day period the default is not cured to the reasonable satisfaction of the Party giving notice. In the event X.________ fails to make any installment of the B.________ Fee or the D.________ Fee, which failure remains uncured for ninety (90) days, Y.________ may immediately terminate this Agreement and all sums due including any unpaid portion of the B.________ Fee and/or D.________ Fee shall be immediately due and payable along with interest as provided herein.
(c) Either X.________ or Y.________ may terminate this Agreement upon fifteen (15) days’ prior written notice to the other Party if:
(i) the other Party shall become insolvent or make a general assignment for the benefit of creditors; or
(ii) a petition or case under any bankruptcy act or similar statute is filed or commenced by or against such other Party and is not vacated within ten (10) days after it is filed.
(d) Y.________ shall have the right to terminate this Agreement by written notice to X.________, effective immediately, upon X.________’s: (i) dissolution, liquidation or otherwise termination of its existence, except as a consequence of a merger into, consolidation with or sale of substantially all of its assets to, another Person which agrees to assume the rights and obligations of X.________ under this Agreement and which has received the prior written approval therefore by Y.________, or (ii) taking any action to challenge the validity of any of the Licensed Patents in any administrative or legal proceeding, or assisting any third Person to take any such action.
(e) In the event of the termination of any license, in whole or in part, under this Agreement, the manufacture and/or Sale by the X.________ Sellers of products covered by such license shall cease immediately to the extent that such manufacture and/or Sale no longer is licensed as a result of such termination, except that such products in inventory as of the date of such termination may be Sold in accordance with the terms and subject to the conditions and restrictions of this Agreement for a period of one hundred eighty (180)days following such termination and royalties shall be due and payable on the Net Sales of such products in accordance with the terms and conditions of this Agreement.
(f) Expiration and termination of this Agreement shall not affect the ability of any Party to seek resolution of any matter arising prior to such expiration or termination pursuant to Article 11 herein.
8.3 Survival of Certain Rights Upon Expiration or Termination. All rights granted to and obligations undertaken by the Parties hereunder shall terminate immediately upon the expiration of the Term of this Agreement (as set forth in Section 8.1 above) or the termination of this Agreement (pursuant to 8.2 above) except for:
(a) The obligations of X.________ to pay any and all royalties or other consideration accrued hereunder prior to such expiration or termination (or during the one hundred eighty (180) day period following termination in the case of inventory as of the date of termination, as provided in Section 8.2 (e) above);
(b) The right of Y.________ to have audited by an independent certified public accounting firm the books and records of X.________ and X.________’s Affiliates as provided in Section 4.7 above;
(c) The indemnification provisions of Section 6.2 above;
(d) The procedures set forth in Article 11 herein in respect of any matter arising prior to such expiration or termination;
(e) Any and all confidentiality obligations provided for in this Agreement; and
(f) Any other provision (s) of this Agreement which would reasonably be expected to survive expiration or termination.”2
The patent license agreement contains a choice of law clause in favor of Swiss law (§13.2) and the following arbitration clause (§11):
11.1 Good Faith Resolution. The Parties shall attempt to settle amicably by good faith discussions any dispute or disagreement between them relating to or arising out of any provision of this Agreement. If the Parties are unable to resolve the dispute or disagreement by such discussions, then the Parties shall refer the dispute or disagreement for resolution to the following designated officers (or designees) of the Parties: […].
11.2 Arbitration. If the Parties are unable to resolve such dispute or disagreement within thirty (30) days after the referral of such dispute or disagreement to their designated officers, then such dispute or disagreement shall be arbitrated to their designated officers, then such dispute or disagreement shall be arbitrated by final and binding arbitration pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce (Paris) as hereinafter provided:
(a) The arbitration tribunal shall consist of one (1) or three (3) arbitrators. If the Parties cannot agree on one (1) arbitrator each, Party shall nominate in the request for arbitration and the answer thereto one (1) arbitrator, and the two (2) arbitrators so named will then jointly appoint a third neutral arbitrator as chairman of the arbitration tribunal. If one Party fails to nominate an arbitrator or, if the Parties’ arbitrators cannot agree on the person to be named as chairman within sixty (60) days, the court of arbitration of the International Chamber of Commerce shall make the necessary appointment for arbitrator or chairman.
(b) The arbitration proceedings shall be held in the English language. The place of arbitration shall be Zurich (Switzerland).
In a letter of July 30, 2010, X.________ referred to §8.2(a) of the license agreement and terminated it with regard to the US Patent Nr. [number omitted] as of August 6, 2010. A.Y.________ AG and B.Y.________ Inc. took the view in a letter of August 31, 2010, that the patent at issue was still valid and that, according to §8.2(e) of the license agreement, X.________ was forbidden to make or distribute products falling under the aforesaid patent except during the selling period according to §8.2(e).
On August 8, 2011, A.Y.________ AG and B.Y.________ Inc. started arbitration proceedings according to the rules of the International Chamber of Commerce submitting that X.________ was to be ordered on the basis of §8.2(e) of the patent license agreement to pay a minimum of USD 7 million and to stop the production and the distribution of any products the subject of claim 21 of the US Patent Nr. [number omitted].
In a letter of October 20, 2011, the Defendant terminated the entire patent license agreement with reference to §8.2(a). The Claimants disputed the validity of the termination.
In a submission of October 21, 2011, the Defendant challenged the jurisdiction of the Arbitral Tribunal and took the view that the dispute was not covered by the arbitration agreement contained in the patent license agreement.
On February 1, 2012, the two party-appointed Arbitrators were confirmed by the Secretary General of the ICC Court of Arbitration, and the Chairman on March 6, 2012.
In a submission of April 23, 2012, the Claimants furthermore asked that the Defendant be ordered to render accounts according to Art. 4.7 of the license agreement as to the figures of the sales of products for which a fee was due.
In a partial award of July 30, 2013, the ICC Arbitral Tribunal sitting in Zürich rejected the jurisdictional challenge of the Defendant and held that it had jurisdiction to decide the submissions in the claim (operative part of the award - §1).
In a civil law appeal, the Defendant asks the Federal Tribunal to annul §1 of the operative part of the interim award of July 30, 2013, of the ICC Arbitral Tribunal sitting in Zürich as to the submissions of the claim of August 8, 2011, and correspondingly to hold that there is no arbitral jurisdiction. In the alternative, the matter should be sent back to the Arbitral Tribunal for supplemental fact-findings and a new decision.
The Respondents submit that the appeal should be rejected if the matter is capable of appeal. The Arbitral Tribunal did not take a position.
The Appellant submitted a reply to the Federal Tribunal on December 3, 2013. The Respondents stated their views in this respect in a rejoinder of December 20, 2013.
According to Art. 54(1) BGG,4 the decision of the Federal Tribunal is issued in an official language,5 as a rule in the language of the decision under appeal. If that is in another language, the Federal Tribunal uses to the official language used by the parties before the Federal Tribunal. The award under appeal is in English. As this is not an official language and the parties used the German language before the Federal Tribunal, the judgment of the Federal Tribunal shall be issued in German.
In the field of international arbitration, a Civil law appeal is allowed under the requirements of Art. 190-192 PILA6 (SR 291) (Art. 77(1)(a) BGG).
The seat of the Arbitral Tribunal is in Zürich in this case. The Appellant and Respondent 2 had their seat outside Switzerland at the relevant point in time (Art. 176(1) PILA). As the parties did not specifically opt-out of the application of Chapter 12 PILA, the provisions of that chapter are applicable (Art. 176(2) PILA).
The award under appeal is an interim award on jurisdiction issued on its own. According to Art. 190(3) PILA, it can be the object of Civil law appeal (BGE 130 III 76 at 3.1.3, p. 79, at 3.2.1, p. 79 f.).
A Civil law appeal within the meaning of Art. 77(1) BGG may in principle only seek the annulment of the decision under appeal (see Art. 77(2) BGG, ruling out the applicability of Art. 107(2) BGG, to the extent that this would allow the Federal Tribunal to decide the matter itself). However, there is a substantial exception to this when the dispute concerns the jurisdiction or the composition of the arbitral tribunal and the Federal Tribunal may itself decide the jurisdiction or the lack thereof of the arbitral tribunal as well as the removal of a challenged arbitrator (BGE 136 III 6057 at 3.3.4, p. 616 with references).
The Appellant submits that §1 of the operative part of the award should be annulled to the extent that the Arbitral Tribunal thereby upheld its jurisdiction to adjudicate the submissions of August 8, 2011, and also a corresponding finding of lack of jurisdiction. The submission is licit (see as to the submission for a partial annulment judgment 4A_360/20118 of January 31, 2012, at 6.1, published in: ASA Bull. 2012, p. 645). As to the jurisdiction to adjudicate the Claimant’s submission of April 23, 2012, that accounts should be rendered according to §4.7 of the License Agreement, the interim award of the Arbitral Tribunal remains unaffected.
According to Art. 77(3) BGG, the Federal Tribunal reviews only the grievances that are raised and reasoned in the appeal brief; this corresponds to the duty to provide reasons in Art. 106(2) BGG for the violation of constitutional rights and of cantonal and intercantonal law (BGE 134 III 186,9 at 5, p. 187 with references). Criticism of an appellate nature is not permitted (BGE 134 III 56510 at 3.1, p. 567; 119 II 380 at 3b, p. 382).
The Federal Tribunal bases its judgment on the factual findings of the arbitral tribunal (Art. 105(1) BGG). In view of the very limited grounds on which an international arbitral award can be appealed, the Court cannot itself rectify or supplement the factual findings of the arbitral tribunal, even if they are obviously inaccurate or based on a violation of the law within the meaning of Art. 95 BGG (see Art. 77(2) BGG, ruling out the applicability of Art. 97 BGG and of Art. 105(2) BGG).
The Appellant disregards this in its criticism of the arbitral finding that both contractual parties were “sophisticated major players in the health care business”11 as obviously inaccurate and submits instead that the parties would have had “massively unequal negotiating power” in the case at hand. In this respect, the Appellant impermissibly submits to the Federal Tribunal its own view of the matter as to the background of the contract negotiation and preparation. The corresponding submissions will therefore remain unaddressed.
The Appellant argues that the Arbitral Tribunal wrongly accepted jurisdiction (Art. 190(2)(b) PILA) as the dispute at hand was not within the scope of the arbitration agreement.
The Federal Tribunal exercises free judicial review in legal terms as to the jurisdictional argument according to Art. 190(2)(b) PILA, including the preliminary substantive issues from which the determination of jurisdiction depends (BGE 138 III 2912 at 2.2.1, p. 34; 134 III 56513 at 3.1, p. 567; 133 III 139 at 5, p. 141).
An arbitration clause must be understood as an agreement in which two or more determined or determinable parties agree and bind themselves to submit one or several existing or future disputes to an arbitral tribunal to the exclusion of the original jurisdiction of the state pursuant to a directly or indirectly determined legal order (BGE 130 III 66 at 3.1, p. 70). It is decisive that the will of the parties should be expressed to leave the decision of some specific disputes to an arbitral tribunal and not to a state court (BGE 138 III 2914 at 2.2.3, p. 35; 129 III 675 at 2.3, p. 679 f.).
The objective scope of an arbitration clause is determined according to Art. 178(2) PILA based on the law chosen by the parties, the law applicable to the dispute, in particular the law applicable to the main contract or according to Swiss law (Dieter Gränicher, in: Basler Kommentar, 3rd ed., 2013, nr. 56 to Art. 178 PILA; Pierre-Yves Tschanz, in: Commentaire romand, 2011, nr. 56 and 85 to Art 178 PILA; Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration, 2nd ed., 2007, Rz. 295). The Arbitral Tribunal therefore rightly interpreted the arbitration agreement concluded by applying Swiss law.
3.2. The interpretation of an arbitration agreement follows the generally applicable principles of interpretation of private intents of will (BGE 130 III 66 at 3.2, p. 71 with references). If it cannot be ascertained, the arbitration clause is to be interpreted according to the principle of reliance, i.e. the presumed will of the parties is to be determined as that which could and should have been understood by the addressee in good faith under the circumstances (BGE 138 III 2915 at 2.2.3; 135 III 295 at 5.2, p. 302; 130 III 66 at 3.2, p. 71; 129 III 675 at 2.3, p. 680). In this respect, the Court must take into account that which is appropriate and it must not assume that the parties would have wanted an unreasonable solution (BGE 122 III 420 at 3a, p. 424; 117 II 609 at 6c, p. 621; see also BGE 133 III 607 at 2.2, p. 610). Even when the choice of words appears clear at first sight, other contractual provisions may determine that, in view of the intent of the parties or other circumstances, the wording of the provision in dispute does not exactly convey the meaning of the agreement of the parties (BGE 136 III 186 at 3.2.1, p. 188; 131 III 606 at 4.2, p. 611 f.; 129 III 702 at 2.4.1, p. 707; each with references).
The legal nature of an arbitration clause must be taken into account in its interpretation; in particular it must be considered that by renouncing the state court, the legal remedies are much more limited. Such an intent to renounce cannot be accepted lightly according to the case law of the Federal Tribunal (BGE 138 III 2916 at 2.3.1, p. 36 f.; 129 III 675 at 2.3, p. 680 f.; 128 III 50, p. 58 at 2c/aa). Yet, with an arbitration agreement there is no reason to interpret it restrictively; instead it must be assumed that the parties wanted broad jurisdiction of the Arbitral Tribunal (BGE 138 III 68117 at 4.4, p. 687; 116 Ia 56 at 3b; each with references).
3.3.1. The Appellant does not dispute that with §11 of the patent license agreement the parties entered into a valid arbitration clause. Instead it takes the view that pursuant to §8.3(1) of the license agreement, the termination according to §8.2 would cause al the rights of the parties – including the disposition of a dispute by an arbitral tribunal – would end at the time of termination. §8.2(f) and §8.3(d) would mean that the parties wanted to make the arbitral jurisdiction subject to a condition subsequent to the performance of the contract, or alternatively, to its termination. Its termination of the contract on July 31, 2010, based on the US Patent Nr. [number omitted] would have become effective as of August 6, 2010, and according to §8.3(1) of the license agreement, it also would have put an end to the commitment to submit any possible disputes in this respect to an arbitral tribunal. As the matter at hand is not a dispute or a difference of opinion that arose before termination, no jurisdiction of the Arbitral Tribunal could be based on the patent license agreement concluded.
3.3.2. Because the Arbitral Tribunal could not factually determine a common will of the parties as to the scope of the arbitration clause, it rightly interpreted it according to the principle of reliance. As it is undisputed that there is a valid arbitration clause, there is no place for restrictive interpretation contrary to the Appellant’s view; instead it must be basically assumed that the parties desired the broad jurisdiction of the of the Arbitral Tribunal (BGE 138 III 681 at 4.4, p. 687; 116 Ia 56 at 3b; each with references).
§11 of the patent license agreement is broadly drafted as to the objective scope of the arbitration clause: accordingly, all differences of opinion or legal disputes between the parties are to be submitted to an arbitral tribunal when they arise in connection with the provisions of the contracts (“any dispute or disagreement between them relating to or arising out of any provision of this Agreement”). Such a description is to be understood as a rule as meaning that the parties did not wish to submit claims arising from their contractually regulated relationship to an arbitral tribunal or to a state court, depending on the legal cause of action; instead is must be assumed that the presumable intent of the parties was to submit to the exclusive jurisdiction of an arbitral tribunal all claims arising from the contractually regulated facts or directly concerning them (BGE 138 III 68118 at 4.4, p. 687 with references).
Such an arbitration clause includes in particular any claims based on the termination of the contract in addition to disputes as to its conclusion or validity (Gränicher, Ibid., nr. 35 to Art. 178 PILA; judgment 4A_452/2007 of February 29, 2008, at 2.5.1). This is in conformity with the principle of autonomy of the arbitration clause, according to which the main contract does not share the fate of the arbitration clause as to its entry in force, validity, or termination (BGE 121 III 495 at 5a, p. 497; 119 III 380 at 4a, p. 384; 115 Ia 56 at 3b, p. 59; each with references).
3.3.3. The legal dispute concerning the damages and the prohibition of production or distribution based on §8.2(e) of the license agreement are accordingly covered by the broadly described jurisdiction of the Arbitral Tribunal according to §11, which Appellant 2 does not fundamentally challenge. Instead, it relies on two additional contractual clauses in which the arbitration clause is mentioned and it deduces from those a limitation in time of the arbitration clause to disputes arising before the termination of the contract: §8.2(f) and §8.3(d) under the common title “Term and Termination” refer to §11 of the patent license agreement.
According to the aforesaid principle of autonomy of the arbitration clause, it must be basically assumed that the arbitration clause contained in a contract is not affected by the expiry of the contractual time or its termination. An agreement to the contrary cannot be accepted lightly and it must be clear from the agreement, as the Arbitral Tribunal rightly pointed out, contrary to the Appellant’s view, Art. §8 of the license agreement does not in good faith entail a presumable will of the parties to abandon the jurisdiction of the Arbitral Tribunal at the end of the contract or with its termination. Instead §8.2(f) confirms, in conformity with the aforesaid principle of autonomy, that the arbitration clause in §11 is not affected by the termination of the contract by expiration or termination. If considered in isolation, the wording of §8.2(f) (“[…] resolution of any matter arising prior to such expiration or termination”19) could suggest a limitation in time of the opportunity to submit possible disputes to arbitral adjudication. However, in view of the detailed and broadly expressed arbitration clause at §11 – which suggests no reference to a factual or temporal limitation – it cannot be assumed in good faith that the parties wanted to submit the arbitration clause to a condition subsequent to the expiration or the termination of the contract by way of the wording of the provision concerning termination. Instead, it must be assumed that they wanted to emphasize that the termination of the license agreement would not affect the arbitration clause it contained, as suggested by the negative wording of the introduction of §8.2(f) (“Expiration or termination of this Agreement shall not affect the ability of any Party to seek resolution […]”20).
In view of the principle of autonomy of the arbitration agreement, the arbitration clause in §11 simply does not fall within the rules in §8.3.1 of the license agreement, according to which, all rights and obligations of the parties expire at the end of the contract as a consequence of expiration or termination. The Appellant’s view that §8.3(d) would exceptionally revive the jurisdiction of the Arbitral Tribunal for some very specific disputes after termination of the contract according to §8.3(1) is not convincing. The opposite conclusion contained in the appeal brief that, as a consequence of the limitation in §8.3(d) any further disputes should be submitted to a state court, is furthermore not persuasive because in the very provision as to the continuation of contractual rights in §8.3(f), it is stated that, aside from those expressly mentioned, other rights and duties concerning contractual provisions remain in force after termination to the extent that their perpetuation was to be reasonably expected. The argument that the Arbitral Tribunal set aside the system of the contract is accordingly unfounded. The reference to the continuation of the contractually agreed procedure to resolve disputes in §8.3(d) also accordingly clarifies a legal situation which already exists and therefore resorting to a more restrictive wording when compared to §11 cannot be understood in good faith as limiting the scope of the arbitration clause materially or temporally.
3.3.4. As the Arbitral Tribunal rightly pointed out, the interpretation the Appellant considers accurate would lead to some inappropriate consequences: disputes concerning license fees arising before termination would be submitted to the Arbitral Tribunal while a dispute concerning license fees after termination, which remain due during the 100 day period to sell the stock according to §8.2(e) and is specifically mentioned as a claim remaining after termination according to §8.3(a), would have to be decided by some unspecified state court. In general, the acceptance of an expiration of the arbitration clause as a consequence of the termination of the contract would carry some significant uncertainties, particularly because the very validity of the termination, its time and consequences are indeed often in dispute between the parties as is the case in this dispute. Adopting rules as to jurisdiction that would be dependent upon the time and the validity of the termination of the main contract appears therefore tedious and problematic as indeed a finding of the contractually instituted Arbitral Tribunal that the termination would be valid would result in its lack of jurisdiction and render impossible an arbitral award as to the termination or its consequences. This would then cause the parties to seize a state court to determine whether the contract still remains in force or not and – should this be the case – to invoke the arbitration clause again. Such a result would contradict the intention of the parties expressed in the arbitration clause to submit any possible disputes to a specific dispute resolution mechanism (illustrative in this respect is the judgment of the Supreme Court of Western Australia of January 17, 2014, Pipeline Services WA Pty Ltd vs. ATCO Gas Australia Pty Ltd,  WASC 10 nr. 47 ff.).
It would not be less difficult to deal with the separation advocated by the Appellant between private and state jurisdiction concerning not only the validity of termination but also the time at which a dispute arose. Furthermore, such separation would make it possible to circumvent the undesired jurisdiction of the Arbitral Tribunal by termination even before any disagreement came to light, as the Respondent rightly points out. From a practical point of view, the solution does not appear appropriate and therefore, it cannot be easily assumed that the parties would have wanted such a solution.
3.3.5. Contrary to the view expressed in the appeal brief, no “clear expression of contractual will” may be deduced from §8.2(f) and §8.3(d) that disputes arising from or in connection with the license agreement of February 22, 2006, would be within the jurisdiction of the contractually instituted Arbitral Tribunal until termination while other disputes after termination, in connection with the contract, would have to be decided by some unspecified state court. Interpretation in good faith instead leads to the conclusion that the parties wanted disputes related to the termination of the patent license agreement to be submitted to the Arbitral Tribunal instituted at §11. The Arbitral Tribunal was therefore right to accept jurisdiction as to the submissions in the claim that were directly related to the performance and termination of the license agreement.
The appeal proves to be unfounded and is to be rejected to the extent that the matter is capable of appeal. In accordance with the outcome of the proceedings, the Appellant must pay costs and compensate its opponent (Art. 66(1) and Art. 68(2)).
Therefore the Federal Tribunal Pronounces:
The appeal is rejected to the extent that the matter is capable of appeal.
The judicial costs set at CHF 12’000 shall be paid by the Appellant.
The Appellant shall pay to the Respondents an amount of CHF 14’000 for the federal judicial proceedings.
This judgment shall be notified in writing to the parties and to the ICC Arbitral Tribunal sitting in Zürich.
Lausanne, February 27, 2014
In the name of the First Civil Law Court of the Swiss Federal Tribunal
Presiding Judge: Clerk:
Klett (Mrs.) Leemann
- 1. Translator’s Note: Quote as X.________ v. A.Y.________ AG and B.Y.________ Inc., 4A_438/2013. The original decision is in German. The full text is available on the website of the Federal Tribunal, www.bger.ch.
- 2. Translator’s Note: In English in the original text.
- 3. Translator’s Note: In English in the original text.
- 4. Translator’s Note: BGG is the German abbreviation for the Federal Statute of June 17, 2005, organizing the Federal Tribunal, RS 173.110.
- 5. Translator’s Note: The official languages of Switzerland are German, French and Italian.
- 6. Translator’s Note: PILA is the most commonly used English abbreviation for the Federal Statute on International Private Law of December 18, 1987, RS 291.
- 7. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/independence-and-impartiality-of-a-party-appointed-arbitrator-in
- 8. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/icc-award-annulled-for-breach-of-the-right-to-be-heard-post-hear
- 9. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/right-to-be-heard-equality-between-the-parties
- 10. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/extension-of-arbitration-clause-to-non-signatories-case-of-a-gua
- 11. Translator’s Note: In English in the original text.
- 12. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/jurisdiction-of-the-cas-upheld-a-pathological-clause-has-to-be-s
- 13. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/extension-of-arbitration-clause-to-non-signatories-case-of-a-gua
- 14. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/jurisdiction-of-the-cas-upheld-a-pathological-clause-has-to-be-s
- 15. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/jurisdiction-of-the-cas-upheld-a-pathological-clause-has-to-be-s
- 16. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/jurisdiction-of-the-cas-upheld-a-pathological-clause-has-to-be-s
- 17. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/jurisdictional-objection-partially-upheld-federal-tribunal-when-jurisdictional-defense-based
- 18. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/jurisdictional-objection-partially-upheld-federal-tribunal-when-jurisdictional-defense-based
- 19. Translator’s Note: In English in the original text.
- 20. Translator’s Note: In English in the original text.