Federal tribunal reaffirms that arbitration clauses must be interpreted according to the general rules of contract interpretation

Case information
August 20, 2012
4A_240/2012
Interest to foreign readers: 
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None
Topics: 
Arbitration clause
Jurisdiction of the Arbitral Tribunal
Original language: 
French
Published: 
31 ASA Bull 100 (2013)
Arbitrator (s): 

Parties

Appellant: 
Respondent: 

Counsel

Appellant: 
Introductory note: 

In 2007 a Swiss company, a Dutch company and a bank entered into a contract whereby the two companies were to control the delivery and storage of cereals bought by a third party - also a signatory of the contract - by way of the credit lines the Swiss bank was making available for this purpose.

The contract contained an arbitration clause providing for ad hoc arbitration in Geneva. Its language was somewhat convoluted and the contract also contained a jurisdiction clause in favor of the Swiss Courts, which was quite confusing and created a conflict between the two contractual provisions.

The cereals disappeared and the bank sued. The jurisdiction of the arbitral tribunal was challenged on the basis of the contractual provision containing a jurisdiction clause in favor of Swiss courts. The parties agreed on the appointment of Bernhard Meyer as sole arbitrator and the proceedings were bifurcated with a first phase limited to jurisdiction.

In March 2012, the Arbitrator found that he had jurisdiction and the award was appealed to the Federal Tribunal. The following are interesting in the opinion:

(i)            The Court confirmed its frequently stated view that arbitration clauses must be interpreted according to the general rules of contract interpretation (see section 4.1 of the opinion in this respect).

(ii)          Faced with two apparently contradictory clauses in a contract, the arbitral tribunal (or the state Court) must try to resolve the contradiction by way of interpretation in a manner that reconciles the two clauses if possible (see section 4.2 of the opinion in this respect).

(iii)         In upholding the solution chosen by the Arbitrator, the Court expressed once again its often stated view that although the existence of an arbitration clause should not be affirmed too lightly, once it is upheld its interpretation must be generous, that is in favor of arbitration (see section 3.1 of the opinion in this respect).

Translation: 

4A_240/20121

 

Judgment of August 20, 2012

 

First Civil Law Court

 

Federal Judge Klett (Mrs), Presiding

Federal Judge Rottenberg Liatowitsch (Mrs.),

Federal Judge Kolly,

Clerk of the Court: Carruzzo

 

1. X.________ SA,

2. Y.________ BV,

Both represented by Mr. Romain Félix,

Appellants,

 

v.

 

Y.________ SA,

Represented by Mr. Grégoire Mangeat and Mr. Claudius Triebold,

Defendant,

 

Facts:

 

A.

On July 16, 2007 the Swiss company X.________ SA, incorporated in A.________ and the Dutch company Y.________ BV, incorporated in B.________ signed a contract entitled Collateral Management Agreement (hereafter: CMA)with Swiss Bank Y.________ SA, which is based in [name of city omitted] and with a third party. Pursuant to this contract both aforesaid companies were entrusted with controlling the delivery and storage of cereals bought by the aforesaid third party in [name of country omitted] and in other countries by way of the credit lines granted by the aforesaid bank.

 

The CMA contains the clauses reproduced hereafter among others. It must be stated in this respect that as a consequence of oversight, its Art. 14.4 was omitted in the citation inserted at page 8 of the award, which mistakenly contains the text of Art. 14.5 under this number. The necessary correction will accordingly be made on the basis of the copy of the contract contained in the case file.

 

"14. ARBITRATION

 

14.1 Save in regard to claims for payment of liquidated amounts or where application may legitimately be made to a court of competent jurisdiction in Switzerland for urgent relief, any dispute between the parties relating to:

The interpretation of; or

14.1.1 The effect of; or

14.1.2 The implementation of; or

14.1.3 Any other matter arising directly or indirectly out of the agreement or the breach of any provision hereof shall be referred to arbitration.

 14.2 The arbitration shall take place informally at Geneva or such other place as the parties may, in writing, agree but otherwise under the provisions of the arbitration laws then in force in Switzerland and wherever possible the arbitration shall be completed within 21 (twenty one) days after the matter has been referred to arbitration. Each of the parties shall be entitled to be represented during the arbitration.

 14.3 The arbitrator shall be, when the dispute is:

14.3.1 Principally an accounting matter, a chartered accountant with at least 10 (ten) years' experience as a practicing auditor, as agreed to by the parties;

14.3.2 A legal matter or any other matter, a practicing senior barrister or a practicing solicitor with at least 15 (fifteen) years' experience, agreed upon between both parties.

 14.4 If the parties cannot reach agreement within 3 (three) days after any party has declared a dispute in writing as to the category in clause 16.3 to which the matter belongs, the dispute will be dealt with in terms of clause 16.3.2

 14.5 If the parties cannot agree upon an arbitrator within 5 (five) days of a dispute being declared in terms of clause 16.1, the dispute will be referred to the most senior executive officer of the professional body which represents the profession concerned, for appointment of an arbitrator.

 14.6 The arbitrator shall have the power to decide on the procedure to be followed for the speedy finalization of the dispute. The arbitrator shall have the sole discretion to decide whether it is necessary to file pleadings, discover documents or to hear oral evidence.

 14.7 The decision of the arbitrator, including any order as to costs, shall be binding on the parties and shall be executed by all parties as though it were an order of court.

 14.8 The parties agree to keep the arbitration, including the subject matter of the arbitration and the evidence heard during the arbitration, confidential and not to disclose it to anyone except for purposes of obtaining a court order.

 14.9 The parties waive any right they may have to dispute the stated location of the arbitration on the grounds that it is an inconvenient forum."

 ***

"15. DOMICILIUM CITANDI ET EXECUTANDI

 

15.1 The parties choose as their domicilia citandi et executandi for all purposes under this agreement, whether in respect of court process, notices or other documents or communications of whatsoever nature (including exercise of any option), the following addresses:

 15.1.1 - 15.1.3 [list of addresses for all Parties to the CMA]

 15.2 Any notice or communication required or permitted to be given in terms of this agreement shall be valid and effective only if in writing but is [sic] shall be competent to give notice by facsimile."

***

"16. GOVERNING LAW AND JURISDICTION

 

The validity of this agreement, its interpretation, the respective rights and obligations of the parties and all other matters arising in any way out of this agreement or its performance shall be determined in accordance with the Laws of Switzerland. The parties consent to the jurisdiction of the courts of Geneva, Switzerland for the purposes of legal proceedings in terms of clause 15.1"2.

 

B.

On October 18, 2011 Y.________ SA discovered that the cereals stored pursuant to the CMA and guaranteeing its loans had disappeared and it sent a request for arbitration to X.________ SA and Y.________ BV, which it held liable for this disappearance, seeking payment of at least some 78 million dollars.

 

A sole ad hoc arbitrator was appointed by agreement between the Parties to hear the case. The Defendants immediately objected to the jurisdiction of the Arbitral tribunal because the Claimant should have acted in front of the Geneva State Courts in accordance with the jurisdiction clause at Art. 16 CMA which, in their view, prevailed on the arbitration clause contained at Art. 14 CMA. It was decided that in a first phase the arbitral proceedings would be limited to this issue.

 

In a preliminary award of March 29, 2012 the ad hoc Arbitrator found that he had jurisdiction to decide the dispute between the Parties.

 

C.

On April 30, 2012, both Defendants (hereafter: the Appellants) filed a Civil law appeal to the Federal Tribunal with a view to obtaining the annulment of the preliminary award and a finding that the ad hoc Arbitrator has no jurisdiction to decide the case.

 

In its answer of June 4, 2012 the Claimant/Respondent submitted that the appeal should be rejected.

 

The request for a stay of enforcement submitted by the Appellants was granted by decision of the Presiding Judge on May 29, 2012.

 

 

Reasons:

 

1.

According to Art. 54 (1) LTF3, the Federal Tribunal issues its decision in an official language, as a rule in the language of the decision under appeal. When the decision was issued in another language (here English), the Federal Tribunal resorts to the official language4 chosen by the parties. In front of this Court both used French. This judgment will accordingly be issued in French.

 

2.

2.1

In the field of international arbitration a Civil law appeal is allowed against the decisions of arbitral tribunals pursuant to the requirements of Art. 190 to 192 PILA5 (Art. 77 (1) LTF).

 

The seat of the arbitration is in Geneva. At least one of the parties (i.e. Appellant nr 2) did not have its domicile within the meaning of Art. 21 (1) LTF in Switzerland at the decisive time. The provisions of Chapter 12 PILA are accordingly applicable (Art. 176 (1) PILA).

 

When , as is the case here, an arbitral tribunal finds that it has jurisdiction in a separate award, it issues an interlocutory decision (Art. 186 (3) PILA) which may be appealed to the Federal Tribunal only on the grounds listed at Art. 190 (3) PILA. The Appellants in this case invoke one of these grounds, namely the alleged lack of jurisdiction of the Arbitrator to adjudicate the claim the Respondent brought against them (Art. 190 (2) (b) PILA). The Arbitrator rejected the jurisdictional defense raised by the Appellants, and accordingly they are especially affected by the award under appeal and consequently have a legally protected interest to its annulment, which gives them standing to appeal (Art. 76 (1) LTF).

 

Timely filed (Art. 100 (1) LTF in connection with Art. 86 (1) (a) LTF) in the legally prescribed format (Art. 42 (1) LTF), the appeal is admissible.

 

2.2

The appeal may only seek the annulment of the decision (see Art. 77 (2) LTF ruling out the applicability of Art. 107 (2) LTF). However when the dispute concerns the jurisdiction of an arbitral tribunal case law exceptionally admitted that the Federal Tribunal could itself issue a finding in favor or against the jurisdiction (ATF 136 III 605 at 3.3.4 p. 616; 128 III 50at 1b).

 

The Appellants’ submission asking the Federal Tribunal to find that the Arbitrator has no jurisdiction to decide the dispute they have with the Respondent is accordingly admissible.

 

2.3

The Federal Tribunal issues its decision on the basis of the facts found in the award under appeal (see Art. 105 (1) LTF). This Court may not rectify or supplement ex officio the findings of fact of the arbitrators even when the facts were established in a manifestly inaccurate manner or in violation of the law (see Art. 77 (2) LTF ruling out the applicability of Art. 105 (2) LTF). However, as was already the case under the aegis of the Federal Statute Organizing the Courts (see ATF 129 III 727 at 5.2.2; 128 III 50 at 2a and the cases quoted) the Federal Tribunal retains the faculty to review the factual findings on which the award under appeal is based if one of the grievances mentioned at Art. 190 (2) PILA is raised against such factual findings or when new facts or evidence are exceptionally taken into account in the framework of the Civil law appeal proceedings.

 

2.4 Seized of a jurisdictional defense, the Federal Tribunal freely reviews the legal issues, including the preliminary issues, determining the jurisdiction of the arbitral tribunal or the lack thereof. However this does not make it a Court of appeal. Thus it does not behoove this Court to research in the award under appeal which legal arguments could justify upholding the ground for appeal of art. 190 (2) PILA. The appellant has to draw the Court’s attention to them in order to comply with the requirements of art.42 (2) LTF (ATF 134 III 565 at 3.1 and the cases quoted).

 

3.

3.1

In his interlocutory award the Arbitrator first reviewed the arbitration clause and the jurisdiction clause separately (Art. 16 CMA) in the light of the principles governing the interpretation of contracts and specifically that of arbitration clauses. Taking into account in particular the circumstances in which the CMA had been adopted, he reached the conclusion that the contract contained both a valid arbitration clause and a jurisdictional clause with no limitation to its scope. He deducted that there was a conflict between the two clauses.

 

The Appellants specifically accepted this conclusion, in particular they do not challenge the finding that the arbitration clause was intrinsically valid and they abandoned their initial submission – rejected by the Arbitrator – that the exhibits produced by the Respondent in connection with the negotiation and the execution of the CMA should not be admitted into the record of the arbitration (appeal p. 9 (C) and p. 16 (e)).

 

Accordingly, the Federal Tribunal will not address these legal issues, which must be considered as solved.

 

3.2

In a second step, the Arbitrator attempted to resolve the conflict between the arbitration clause and the jurisdictional clause. He did so on the basis of reasons that can be summarized as follows.

 

Firstly Art. 14 CMA extends over more than one page and is very detailed. In its first sentence it states two specific exceptions to the arbitration clause in favor of the Swiss State Court having jurisdiction and these relate to the payment of “liquidated amounts” and to “urgent relief “. Therefore the Respondent’s argument that it considered the reference to the “courts of Geneva” at Art. 16 CMA as encompassing these two exceptions appears credible and reasonable.

 

Furthermore, in view of the length of Art. 14 CMA, the arbitration clause was far more noticeable to the reader of the contract than the jurisdictional clause contained in a small sentence hidden at Art. 15 CMA. Therefore, according to the rules of good faith and the principle of mutual trust, it behooved the Appellants to demonstrate that the Respondent, at the time it signed the contract, had understood that the last sentence of Art. 16 CMA would prevail on the lengthy arbitration clause and make it superfluous. Yet, no such demonstration was made.

 

Finally one should not forget that the Appellants themselves introduced the arbitration regime into the CMA as they appeared to be doing systematically in the contracts of the same type they were concluding at the time.

 

On the basis of this reasoning the Arbitrator held that the arbitration clause prevailed over the jurisdictional clause which, considered in its context, would apply only to the two specific situations mentioned at Art. 14.1 CMA (“liquidated amounts” and “urgent relief”).

 

4.

4.1

An arbitration clause must be interpreted according to the general rules of contract interpretation, except that case law recommends not to accept too easily that an arbitration agreement was concluded if this is in dispute (ATF 138 III 29 at 2.2.3; 129 III 675 at 2.3 p. 680 ff, 128 III 50 at 2c/aa p. 58, 116 Ia 56 at 3b p. 58). However in this case the latter hypothesis is not to be taken into account as the Appellants specifically acknowledge that the CMA contains a valid arbitration clause (see 3.1 above). Therefore the issue in this case is not the interpretation of an arbitration agreement as such but that of a contract containing an arbitration clause and a jurisdictional clause apparently irreconcilable with each other in order to decide which applies in this case. To do so it is sufficient to resort to the ordinary rules of interpretation of contracts.

 

Seized of a dispute as to the interpretation of a contract, a Court must first research the real and common intent of the parties, even empirically on the basis of such hints as may be available, without limiting itself to the wordings and inaccurate denominations the parties may have used (Art. 18 (1) CO6; ATF 131 III 280 at 3.1). This so called subjective interpretation is an issue of fact and of assessment of the evidence (ATF 132 III 626 at 3.1; 131 III 606 at 4.1 p. 611).

 

If the effective intent cannot be sufficiently established or if the Court finds that one of the contracting parties did not understand the real intent expressed by the other, the Court will determine the meaning they could and should have given to their respective expressions of will according to the rules of good faith (in accordance with the principle of mutual trust; ATF 136 III 186 at 3.2.1). Such objective interpretation is an issue of law and is carried out not only on the basis of the text of the contract and the context of the statements, but also in the light of the circumstances preceding and accompanying them, to the exclusion of what took place afterwards (ATF 136 III 186 at 3.2.1; 119 II 449 at 3a). If a doubt remains as to the intent of the parties, additional means can be resorted to. Therefore, in the spirit of favor negotii, when faced with contradictory clauses, one should choose, to the extent possible, an interpretation making it possible to harmonize such clauses (Bénédict WINIGER, in Commentaire romand, Code des obligations I, 2nd ed. 2012, nr 45 ad Art. 18 CO).

 

4.2

In the case at hand the Arbitrator did not establish a concurring will of the Parties as to how the two contradictory clauses should be reconciled. He accordingly interpreted them on the basis of the principle of mutual trust.

 

Considered in the light of the aforesaid principles of case law and in view of the arguments contained in the answer to the appeal, the Appellants’ arguments challenging the results of objective interpretation call for the following remarks.

 

4.2.1 Firstly, the Appellants challenge the conclusions drawn by the Arbitrator from the length and the detailed nature of the arbitration clause as compared to the jurisdictional clause. They argue in this respect that it is natural for an arbitration clause to be detailed while a jurisdictional clause will be short as it limits itself to indicate the competent court ratione loci. In their view the fact that the Parties unquestionably gave more attention to the jurisdictional clause when negotiating the CMA and not to the arbitration clause is more important as the latter’s references, although obviously erroneous, remained unchanged through the successive drafts while the reference in the jurisdictional clause was adapted during the contractual negotiations (appeal litt. c (i) p. 11 ff).

 

In itself the Appellants’ initial remark justifying the difference in length of the two clauses in dispute is not inaccurate. Yet the arbitration clause takes more than one page of a contract containing only fifteen pages, is of unusual length, so that it could not escape the attention of any reader and particularly not that of a bank and two service companies with great commercial experience. It is therefore unthinkable that the contracting Parties would not have noticed the existence of such a clause when they signed the contract containing the jurisdictional clause in dispute. Conversely the jurisdictional clause – further down the text of the same contract incidentally – does not immediately attract the reader’s attention and that is the least one can say: not only does it contain one line at the end of a provision – Art. 16 CMA – also dealing with another issue (“governing law”) but above all the reference there to “legal proceedings in terms of clause 15.1” appears very abstruse, as the latter clause merely spells out the “domicilia citandi et executandi” of the Parties. That the jurisdictional clause allegedly was negotiated more intensely than the arbitration clause does not change this finding. As to the inaccurate references in the arbitration clause, they have no impact on the interpretation process of the two clauses at hand, considering that the Parties agreed in the arbitral proceedings to identify the clauses that were effectively referred to (see award nr 51).

 

It must accordingly be held in this respect that the Respondent could objectively an in good faith assume that the arbitration clause inserted at Art. 14 CMA at the Appellants’ initiative corresponded to their will. Moreover it is not relevant whether the will expressed by them corresponded to their real intent or not.

 

4.2.2 The arbitration clause reserved the jurisdiction of Swiss State Courts in two specific situations, namely a claim for payment of liquidated amounts or urgent relief (see Art. 14.1 CMA). The Appellants emphasize this and argue that this would not at all mean that the Parties wanted to limit the jurisdiction of the Geneva Courts as provided in the jurisdictional clause to these two situations only. Firstly, this would not be practicable concerning the liquidated amounts, for which the CMA gives no clue and without practical bearing for urgent relief as the jurisdiction of Swiss Courts to order such relief is already provided by law (Art. 183 PILA). Secondly, if the Parties had really wanted to give jurisdiction to the State Courts in the two situations contemplated by Art. 14.1 CMA, they would have specifically referred to the Geneva Courts and not to the Swiss Courts in general, knowing that one of the Appellants is based in the Netherlands. Thirdly and finally, it is contradictory to find, as the Arbitrator did, that the jurisdictional clause contains no restriction to its scope while concluding that the Parties wanted to limit the jurisdiction of the Geneva Courts only to the two situations mentioned in the clause.

 

As to the first argument, the Respondent convincingly demonstrates at page 9 of its answer, with references, that the concept of “liquidated amounts” is not limited to claims arising from a penalty clause, but also refers to a specific amount to be paid by one of the Parties as compensation for a specific damage (also see judgment 4A_150/20127 of July 12, 2012, litt. B. and at 3.2.1); that it is not impossible to find a practical example of this legal concept in the CMA and its enclosures; finally, that reference had already been made to “liquidated amounts” in another contract entered into by one of the Appellants with the Respondent at the same time and that was part of the arbitration record (exhibit C-14 quoted at nr 68 (d) of the award under appeal). The Respondent rightly concludes that contrary to what the Appellants claim, it had no reason to conclude that the reference to claims based on “liquidated amounts” would be an alien body in the economy of the CMA. Moreover, as the Respondent rightly emphasizes, the fact that, by hypothesis, the reserved jurisdiction of the State Courts for urgent relief could be theoretically superfluous was certainly not a reason to doubt the applicability of the arbitration clause. Moreover the lack of any specific reference to the Geneva Courts at Art. 14.1 CMA – where reference is made to the Swiss Court having jurisdiction – leads to the same conclusion. Moreover, no matter what the Appellants claim, it was not excluded that one of the contracting Parties could seize some other Swiss Courts than the Geneva Courts depending on where the relief sought was to be enforced (see Art. 10 (b) PILA; Andreas BUCHER, Commentaire romand, Loi sur le droit international privé - Convention de Lugano, 2011, nr 11 ad Art. 183 PILA), so that the general reference to Swiss Courts made sense. In any event, assuming the two exceptions reserved at Art. 14.1 CMA to be useless, this would not mean that the jurisdictional clause would have to govern all disputes arising from the CMA to the exclusion of the arbitration agreement. Finally the contradiction the Appellants claim is in appearance only: the Arbitrator did indeed find that a restriction to its scope could not be deducted from the very text of the jurisdictional clause but, by way of objective interpretation of the two clauses in dispute, taken jointly and put into context, he reached the conclusion that Art. 16 CMA should apply only to the two exceptional situations in which Art. 14.1 reserved the jurisdiction of State Courts.

 

4.2.3 The Arbitrator held that it behooved the Appellants to demonstrate that the Respondent had understood that the last sentence at Art. 16 CMA prevailed over the lengthy arbitration clause at Art. 14 CMA, thus making it superfluous (award nr 68 (b)). According to the Appellants, their only burden of proof was to show that, from the two irreconcilable clauses, the arbitration clause should be set aside as an alien body in the CMA. Yet they would have proved that by showing that they never had any intent to resort to arbitration, which according to them resulted from the very existence of a standard jurisdictional clause, clear, unlimited and carefully considered by the Parties, as opposed to the obscure and impractical arbitration clause, providing for an realistic frame (21 days) and containing many mistaken references (appeal, litt. d, p. 14 ff).

 

The argument is unfounded. As to the burden of proof, one does not see the difference between the Arbitrator’s opinion and that of the Appellants as described above, since ultimately the issue was to determine which of the incompatible clauses had to prevail as to the dispute between the Parties. The Arbitrator did not address the issue as one of fact – or consequently one of evidence – to resolve it, as he indeed resorted to objective interpretation, which is a matter of law. This being said and from a more general point of view, there is no denying that to the extent that the Appellants challenged the Arbitrator’s jurisdiction they had the burden of showing why pursuant to the CMA the Respondent should have sued them in the Geneva State Courts. Yet the aforesaid arguments, which they raise in this respect, are not pertinent at all as already pointed above. The same applies to the one drawn from the short time limit at Art. 14.2 CMA. It is doubtlessly due to the nature and to the object of the contractual obligations undertaken by the Appellants, namely to control the delivery and the storage in a foreign country of cereals bought by a third party.

 

4.2.4 The Appellants also claim that the issue as to which Party initially presented the CMA would be irrelevant as to the determination of whether or not the arbitration clause prevails over the jurisdictional clause (appeal litt. f (1) p. 16 ff). They are doubtlessly right in this respect. However, besides the fact that such a circumstance is not decisive to resolve the issue in dispute, it is not irrelevant to find that the Appellants themselves introduced the two apparently contradictory clauses into the CMA.

 

Moreover, when they challenge the Arbitrator’s conclusion (award nr 68 litt. d second sentence) drawn from a specific example, according to which they would usually insert arbitration clauses in similar contracts (appeal litt. f (ii), p.17 ff), the Appellants submit an inadmissible argument (see above at 2.3) relating to a factual finding – more precisely to a factual deduction (the usual behavior of a party) – based on a finding (the existence of an arbitration clause in an agreement similar to the CMA) drawn from a document which is part of the record of the arbitration (exhibit C-14).

 

4.2.5 Finally, the precedent quoted by the Appellants to substantiate their argument, namely judgment 4A_279/20108 of October 25, 2010 is not relevant. The Respondent convincingly showed this in its answer (p. 15 ff, nr 8). Indeed in that case, the Federal Tribunal dealt with a clause submitting the dispute to binding arbitration through the American Arbitration Association or to any other US Court9. Interpreting this subsidiary clause in light of the circumstances of the case at hand, this Court reached the conclusion that there was no clear and unequivocal will of the parties to rule out the jurisdiction of State Courts. Yet in this case the Arbitrator did not have to decide between the two irreducible terms of an alternative, but to conciliate through interpretation two separate clauses that ultimately were incompatible in appearance only. He did so by finding that Art. 16 CMA, considered in the light of Art. 14 (1) CMA, provides the residual jurisdiction of the Geneva State Courts for the exceptional situations reserved in the arbitration clause. The result of his interpretation is above criticism, no matter what the Appellants claim.

 

Consequently the Arbitrator was right to accept jurisdiction to decide the dispute between the Parties. The appeal submitted to the Federal Tribunal cannot therefore but be rejected.

 

5.

In view of the outcome the Appellants shall severally pay the costs of the federal proceedings (Art. 66 (1) and (5) LTF) and pay compensation to the Respondent (Art. 68 (1), (2) and (4) LTF).

 

Therefore the Federal Tribunal pronounces:

 

  1. The appeal is rejected.
  2. The judicial costs, set at CHF 25’000 shall be borne by the Appellants severally.
  3. The Appellants shall pay to the Respondent severally an amount of CHF 30’000 for the federal judicial proceedings.
  4. This judgment shall be notified in writing to the Parties and to the sole Arbitrator.

 

Lausanne August 20, 2012.

 

In the name of the First Civil law Court of the Swiss Federal Tribunal.

 

 

The Presiding Judge:                                     The Clerk:

 

Klett (Mrs.)                                                      Carruzzo

 

 

 
  • 1. Translator’s note: Quote as X._____ SA and Y._____ BV v. Y._____ SA, 4A_240/2012. The original of the decision is in French. The 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: LTF is the French abbreviation for the Federal Statute of June 17, 2005 organizing the Federal Tribunal, RS 173.110.
  • 4. Translator’s note: The official languages of Switzerland are German, French and Italian.
  • 5. 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.
  • 6. Translator’s note: CO is the French abbreviation for the Swiss Code of Obligations.
  • 7.  
  • 8. Translator’s note: Full English translation at http://www.praetor.ch/arbitrage/validity-of-pathological-arbitration-clause-rightly-denied-by-sw/
  • 9. Translator’s note: In English in the original text.