Proper interpretation of arbitration clauses

Case information
September 15, 2015
Interest to foreign readers: 
Very interesting
Jurisdiction of the Arbitral Tribunal
Original language: 


Introductory note: 

The case involved three companies from France, the United Kingdom and Russia. The companies entered into a distribution agreement in 2009 governed by Swiss law and containing a fairly pathological clause entitled “arbitration” but referring to the “empowered jurisdiction of Geneva, Switzerland.” To add to the confusion, they then entered into a data exchange contract, to which the UK company was not a party, by which the French and Russian company submitted to French law and jurisdiction would be in the state courts of Lyon in France…


When a dispute arose, the UK company initiated legal proceedings in the Geneva State Court (“empowered jurisdiction of Geneva”) but  the Respondent immediately objected to the jurisdiction of the Geneva Court and raised an arbitration defense. Since the state proceedings in Geneva were merely conciliatory proceedings, the matter stopped there but some months later, an arbitration was indeed initiated by the UK and Russian companies in Geneva.


The Geneva Chamber of Commerce appointed a sole arbitrator (whose name seems to be a state secret for some reason, so much for Swiss transparency….) and he bifurcated the proceedings to address jurisdiction first.


In an “interlocutory decision on jurisdiction” – actually a jurisdictional award – of February 3, 2015, the mysterious arbitrator found that he had jurisdiction.


The French company appealed to the Federal Tribunal and the opinion is quite interesting because it contains a clear and convincing re-statement of Swiss law as to the validity of an arbitration clause in international arbitration:


  1. The arbitration clause is valid if it meets the requirements of Swiss law, of the law chosen by the parties, or of the law governing the subject of the dispute. Any one of the three will do. (See Section 2.2.1 of the decision in this respect.)


  1. The arbitration agreement embodies the agreement of the parties to waive state jurisdiction in favour of a private arbitral tribunal and a pathological clause must be interpreted by determining the real and common intent of the parties or, when that is not possible, by applying the principle of trust to determine the meaning of the statements exchanged by the parties at the time, or, if that also fails, by giving the pathological clause a meaning which makes it possible to uphold the agreement to arbitrate. (See Section 2.2.2 of the decision in this respect.)


  1. When an arbitral tribunal determines what the parties actually wanted, it issues a finding of fact, which binds the Federal Tribunal. (See Section of the decision in this respect.)

Further comments can be found in Hansjörg Stutzer and Bruno Boesch’s interesting Neswletter, a copy of which is attached for ease of reference.






Judgment of September 15, 2015



First Civil Law Court



Federal Judge Kiss (Mrs.), Presiding

Federal Judge Klett (Mrs.)

Federal Judge Hohl (Mrs.)

Clerk of the Court: Mr. Carruzzo


A.________ Laboratory,

Represented by Mrs. Anne-Florence Raducault,





1. B.________ Ltd,

2. C.________,

Both represented by Mrs. Anne-Virginie La Spada-Gaide,









Pursuant to a three-party distribution agreement of July 21, 2009, (hereafter: the Distribution Agreement), governed by Swiss law, A.________ Laboratory (hereafter: A.________), a French company specialized in the manufacture of medicinal products, which is based in Lyon, undertook to sell certain pharmaceuticals to the English company, B.________ Ltd (hereafter: B.________), which undertook to deliver the products to the Russian company, C.________, with a view to their distribution in Russia.


The Distribution Agreement contains a clause worded as follows:



Any disputes and disagreements that may arise out of or in connection with this Contract have to be settled between the Parties by negociations. If no Contract can be reached, the Parties shall submit their dispute to the empowered jurisdiction of Geneva, Switzerland.2


On April 1, 2010, the same parties signed an addendum to the Distribution Agreement, which did not modify the aforesaid clause (hereafter: the Addendum).


In conformity with Art. 6 of this Addendum, A.________ and C.________ entered into a contract on June 9 and 24, 2010, entitled Quality and Safety Data Exchange Agreement (hereafter: the Data Exchange Contract), constituting an annex to the Distribution Agreement, pursuant to which they formalized their respective duties as to pharmacovigilance in particular.


The Data Exchange Contract contains a clause stating the following:


7-1) Governing Law – Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of France.

The Parties shall do their utmost to reach an amicable settlement to any dispute arising hereunder. If no agreement can be reached, the Parties shall submit their dispute to the empowered jurisdiction of Lyon, France.


This Agreement constitutes the entire agreement of the Parties hereto with respect to its object and supersedes and cancels any prior representation, commitment, undertaking or agreement between the parties, whether oral or written, with respect to or in connection with any of the matters or things to which such Agreement applies or refers.

The English version of this Agreement shall prevail.3


In a letter of May 26, 2011, sent to C.________, A.________ terminated the Distribution Agreement in advance. This produced a dispute between the parties to the aforesaid Contract.



On May 22, 2013, B.________ invoked Art. 22 of the Distribution Agreement and filed a request for conciliation in the Court of First Instance of the canton of Geneva with a view to obtaining payment by A.________ of a total of EUR 2’687’361.60, with interest, for delivery of defective products and wrongful termination of the aforesaid contract. Under the heading in the request “Jurisdiction of the Tribunal of First Instance” it stated the following in its legal reasoning (p. 16 ff.):


According to Art. 22 of the Distribution Agreement of July 21, 2009, between B.________ and A.________, any dispute or disagreement that may arise in connection with the Contract must be settled by negotiations between the parties and, in the absence of an agreement, the parties shall submit their dispute to the competent courts of Geneva.


B.________ and A.________ therefore accepted the jurisdiction of the Geneva courts as authorized by Art. 5 PILA.4


In this respect, the fact that Art. 22 of the Contract is entitled “Arbitration” does not mean that the parties agreed on an arbitration clause. None of the words used in Art. 22 refer to arbitral proceedings. Moreover, the Contract expressly states at page 4, just before article 1, that the headings of the clauses are inserted solely out of convenience and do not affect the interpretation of the contract (…).


It must also be pointed out that in Russian the word, “arbitration” merely means “jurisdiction”, which the clear wording of Art. 22 of the Contract confirms (…).


Moreover, under n. 55 of the request for conciliation, B.________ explained the absence of the Russian company in the rubrum5 of the brief as follows:


C.________ for its part will initiate legal proceedings against A.________ in the courts of Lyon, France, according to Art. 7-1 of the Agreement between A.________ and B.________ (sic) modifying the jurisdiction clause of the Distribution Agreement as to the relationship between A.________ and C.________.


Further to the filing for the request for conciliation, A.________ spontaneously submitted a brief dated August 30, 2013, and entitled, “Submissions n. 1” in which it stated the following as to Art. 22 of the Distribution Agreement (p. 3 ff.):


“The three-party Distribution Agreement entered into on July 21, 2009, between A.________ Laboratory, B.________ and C.________ is written in the Russian language and in English but the English version prevails according to Art. 21 of the aforesaid Contract.


This Contract contains an arbitration clause at its Art. 22 entitled “ARBITRATION”, which means, “Arbitration” in French.


According to the Larousse French-English dictionary, the English word, “arbitration” means “arbitrage” in the legal meaning of the term and “arbitration clause” means “clause compromissoire.”


The wording of the clause entitled, “ARBITRATION” is clear: in case of dispute or disagreement between the parties as to this Distribution Agreement, the parties have to negotiate to reach an amicable settlement. If no settlement is concluded, the parties submit their dispute to the Geneva court having jurisdiction.


This arbitration clause really does not address the jurisdiction of the Civil Court of Geneva but the competent body as to arbitration in Geneva, namely the Geneva Chamber of Commerce, Industry and Services.


This clause may therefore not be interpreted at all as a jurisdictional clause, but as a clause giving the parties the opportunity to settle their dispute by arbitration and in choosing this as a possibility, they mutually agreed to defer to the Geneva arbitration bodies.


The clause is not a choice of jurisdiction clause either, but a mere arbitration clause: if the parties wish to resort to arbitration, they have to go to the Geneva Chamber of Commerce, Industry and Services but they have no obligation to submit their claims to this body.


The title of Art. 22 of the Contract – “ARBITRATION” – cannot be considered as clumsy drafting as Company B.________ seeks to demonstrate in vain.


Therefore, when taking A.________ Laboratory to the Court of First Instance of Geneva, Company B.________ sued in a court without jurisdiction because it was not chosen by the parties.


Moreover, as to the jurisdiction rules concerning judicial bodies, reference to EU law is required in view of the nationality of the parties.”


On April 15, 2014, the Tribunal of First Instance of the canton of Geneva authorized B.________ to proceed.



C.a. On May 23, 2014, B.________ and C.________ jointly sent a request for arbitration to the Geneva Chamber of commerce, industry and services (CCIG). The English company repeated the submissions contained in its request for conciliation whilst the Russian company sought payment of a total amount of EUR 692’148.26 with interest on the same ground as its co-Claimant. As to jurisdiction, the Claimants quoted the text reproduced above (see B) of the arbitration defense raised by A.________ in the Geneva state court and added the following (p. 4, n. 13):


The attempts at conciliation having failed (…), after several months of fruitless exchanges, the Claimants agreed to the interpretation of Art. 22 of the Contract stated by the Defendant in the Swiss court and consequently submit this Request.


In its answer to the request for arbitration of June 20, 2014, A.________ disputed the existence of a valid arbitration agreement which could bind the parties. In its view, the Distribution Agreement, signed in 2009, and the Data Exchange Contract, signed in 2010, contained contradictory jurisdictional rules – Art. 22 of the former and Art. 7 of the latter – so that priority should be given to the most recent contract using the jurisdiction of the state courts of Lyon. As a party to the latter contract, C.________ therefore had to act in those courts and the proceedings between A.________ and B.________ should be stayed until disposition of the legal issues in the case that the Russian company would potentially initiate against the French company in Lyon. Be this as it may, Art. 22 of the Distribution Agreement did not constitute a valid arbitration agreement because several elements necessary to conduct an arbitral procedure were missing (the designation of the arbitral jurisdiction, the number of arbitrators, the duration of the arbitration, etc.). Upon careful reading, the aforesaid clause instituted in reality a mere mechanism of dispute settlement in two phases of the disputes which may oppose the parties one day: the first would be free negotiations between the parties; the second, a negotiation supervised by the Geneva courts. Moreover, by seizing these courts, B.________ engaged in a “judicial confession” as to the interpretation of Art. 22 and therefore renounced arbitration in favor of the national courts having jurisdiction. Yet, the rules of European Union law as to jurisdiction established the jurisdiction of the state courts in Lyon, which is the seat of the Defendant, just like Art. 7 of the Data Exchange Contract or Art. 5(3) PILA, incidentally.


On September 23, 2014, the Sole Arbitrator (hereafter: the Arbitrator) appointed by the CCIG decided to bifurcate the case and to issue an interlocutory decision as to his jurisdiction in accordance with Art. 186(3) PILA. To this purpose, he ordered a second exchange of briefs on this issue and he closed the proceedings by an email of December 22, 2014.


C.b. By way of an, “interlocutory decision on jurisdiction” of February 3, 2015, the Arbitrator found that he had jurisdiction to address the dispute between the parties. He stated that the costs concerning the jurisdictional phase would be dealt with in the final award. The reasons leading him to accept jurisdiction may be summarized as follows.


By raising the jurisdictional defense before any defense of the merits, A.________ complied with the rules of Art. 186(2) PILA. Its defense is therefore admissible. The real and common intent of the parties to resort to arbitration is expressed at Art. 22 of the Distribution Agreement and confirmed by the subsequent behavior of the parties to the arbitration, as it can be inferred from the spontaneous submissions filed by A.________ before the judicial body of conciliation in Geneva and from the filing of the arbitration request. The absence of an agreement between the parties as to secondary items of the arbitration cannot affect the validity of the arbitration agreement. The reference to the ‘powered [recte: empowered] jurisdiction of Geneva,’ which does not at all contradict the intent of the parties to resort to arbitration, may not be explicit but it nonetheless reveals the intention of the parties to describe a tribunal to be constituted under the aegis of the CCIG and operating according to the Swiss Rules of International Arbitration of the Swiss Chambers’ Arbitration Institution.


One cannot find from Art. 7 of the Data Exchange Contract of 2010 that the arbitration agreement contained in the Distribution Agreement was revoked: on the one hand, the clear intent of the parties to do so fails; on the other hand, the parties to these two successive contracts are not the same.


Moreover, A.________ does not claim in the arbitration that a possible binding pre-arbitration mechanism would have been breached, which may lead to the lack of jurisdiction of the Arbitrator ratione temporis as the case may be. Be this as it may, the requirements of case law as to the recognition of such a binding prerequisite are manifestly not met in the case at hand.


Finally, one does not see that the Claimants renounced or appeared to renounce the arbitration clause by seeking conciliation in the Geneva judicial bodies, or that they may be accused of contradictory behavior in this respect. Indeed, according to their understanding of Art. 22 of the Distribution Agreement, the clause demanded that the former bodies be seized beforehand with a view to conciliation. Therefore, they cannot be blamed for acting according to what they thought was the first step of the contractual dispute resolution mechanism. And even in the contrary hypothesis, it would still be necessary for the Defendant to proceed on the merits without raising the arbitration defense in order to admit tacit renunciation to the arbitration agreement. Yet, it was not so since, quite to the contrary, A.________ immediately raised such a defense with reasons in its brief of August 30, 2013.



On March 3, 2015, A.________ (hereafter: the Appellant) filed a civil law appeal with a quest for a stay of enforcement for violation of Art. 190(2)(b) PILA. It submits that the interlocutory decision of February 3, 2015, should be annulled, its opponents be ordered to pay the costs of the federal proceedings and those of the arbitration, and requests the payment of an amount of EUR 30’000 by each of them for improper proceedings.


At the outset of their joint answer of April 30, 2015, B.________ and C.________ represented by the same counsel, submit that the appeal should be rejected insofar as the matter is capable of appeal and the decision under appeal confirmed.


In a reply of May 26, 2015, and a rejoinder of June 16, 2015, the Appellant and the Respondents maintained their previous submissions.


The Arbitrator submitted the file of the case and stated that he had no observations to make with regards to the appeal.


The request for a stay of enforcement was upheld by the decision of the presiding judge of May 27, 2015.








A civil law appeal is admissible against international arbitral awards pursuant to the requirements of Art. 190 to 192 PILA (Art. 77(1)(a) LTF6). Whether as to the object of the appeal, the standing to appeal, the time limit to appeal, the Appellant’s submissions as to jurisdiction, or the grievance raised in the appeal brief, none of these admissibility requirements raises any problem in the case at hand. The merits of the appeal may therefore be addressed.



In a sole argument based on Art. 190(2)(b) PILA, the Appellant submits that the Arbitrator was wrong to accept jurisdiction to address the request.


2.1. Seized of a jurisdictional defense, the Federal Tribunal reviews the legal issues freely, including such preliminary issues as determining the jurisdiction or the lack of jurisdiction of the arbitral tribunal. Yet, this does not make it a court of appeal. Therefore, it does not behoove this Court to search the award under appeal for legal arguments which may justify upholding the arguments based on Art. 190(2)(b) PILA. Instead, it behooves the Appellant to draw the Court’s attention to them in order to comply with the requirements of Art. 77(3) LTF (ATF 134 III 5657 at 3.1 and the cases quoted).


However, the Federal Tribunal reviews the factual findings only within the usual limits, even when addressing arguments based on the lack of jurisdiction of the arbitral tribunal (judgment 4A_90/2014 of July 9, 2014, at 3.1). Therefore, the Appellant’s request that the Court should rectify or supplement the factual findings of the Arbitrator is inadmissible, based on Art. 97(1) and 105(2) LTF. The Appellant overlooked that the applicability of these two provisions is specifically excluded by Art. 77(2) LTF in a civil law appeal against a decision of an arbitral tribunal, whether in international or in domestic arbitration.



2.2.1. The arbitration agreement must meet the requirements of Art. 178 PILA.


It is not disputed nor can it be disputed that Art. 22 of the Distribution Agreement meets the formal requirements of Art. 178(1) PILA.


Pursuant to Art. 178(2) PILA, the arbitration clause is valid if it meets the requirements of either the law chosen by the parties, the law governing the object of the dispute and in particular the law applicable to the main contract, or Swiss law.


The provision quoted upholds three alternative connecting factors in favorem validitatis, without any hierarchy between them, namely the law chosen by the parties, the law governing the object of the dispute (lex causae) and Swiss law as the law of the seat of the arbitration (ATF 129 III 727 at 5.3.2, p. 736). Failing a choice of law as to Art. 22 of the Distribution Agreement, the Arbitrator reviewed the substantive validity of the clause in the light of Swiss law, which was both the lex causae and the lex fori. The review of the Court is therefore limited to the issue as to whether the Arbitrator disregarded Swiss law by accepting jurisdiction.


2.2.2. The arbitration clause is an agreement by which two or more determinate or determinable parties agree to entrust an arbitral tribunal or a sole arbitrator with the mission of issuing a binding award as to one or several existing disputes (arbitration agreement) or future disputes (arbitration clause) resulting from a determinate legal relationship, in lieu of the state court that otherwise would have jurisdiction (judgment 4A_515/20128 of April 17, 2013, at 5.2 and the references). It is important that the will of the parties to waive the jurisdiction of the state court that would normally have jurisdiction in favor of the private jurisdiction, which is an arbitral tribunal, should appear there. As to the arbitral tribunal called upon to decide the dispute, it must be determinate or, at the very least, determinable (ATF 138 III 299 at 2.2.3, p. 35).


The provisions of arbitration agreements which are incomplete, unclear, or contradictory are considered as pathological clauses (as to the various types of pathological clauses, see among others: Lukas Wyss, Aktuelle Zuständigkeitsfragen in Zusammenhang mit internationalen kommerziellen Schiedsgerichten mit Sitz in der Schweiz, Jusletter of June 25, 2012, n. 96 to 107). As long as they do not concern any items that are mandatory in an arbitration agreement, in particular the commitment to refer the dispute to a private arbitral tribunal, such clauses do not necessarily void the arbitration agreements in which they are. Instead, one must resort to interpretation and, as the case may be, to supplement in the contract in accordance with the general rules of contract law, to reach a solution complying with the fundamental will of the parties to submit to arbitral jurisdiction (last case quoted, ibid.).


The interpretation of an arbitration agreement in Swiss law takes place according to the general rules of interpretation of contracts. First, the court must find the real and common intent of the parties – empirically as the case may be – on the basis of clues, looking beyond the inaccurate expressions or descriptors that they may have used. Determining what a party to a contract knew or wanted at the time of conclusion is in the realm of fact finding; determining the real will of the parties is known as subjective interpretation (ATF 131 III 606 at 4.1, p. 611). If the court succeeds in establishing a real and mutual will of the parties, this is a factual finding which binds the Federal Tribunal. If it does not succeed, it shall then apply the principle of reliance to research the meaning that the parties could and should have given to their mutual manifestations of will according to the rules of good faith under all the circumstances (ATF 140 III 134 at 3.2; 135 III 295 at 5.2, p. 302 and the cases quoted). Should the application of this principle fail to bring a conclusive result, some alternate means of interpretation may be resorted to, such as the so-called rule of ambiguous clauses, which states that when in doubt, the contract must to be interpreted against the drafter (Unklarkeitsregel, in dubio contra stipulatorem or proferentem; ATF 124 III 155 at 1b, p. 158 and the cases quoted). Moreover, if the interpretation leads to the conclusion that the parties indeed wanted to waive the jurisdiction of the state court as to their dispute in order to submit it to an arbitral tribunal but some differences remain as to how the arbitration proceedings should be conducted, the principle of utility (Utilitätsgedanke) must be applied: namely, the pathological clause must be given a meaning which permits the arbitration agreement to be upheld (ATF 138 III 2910 at 2.3.3 [condition met]; judgments 4A_388/201211 of March 18, 2013, at 3.4.3 and 4A_244/201212 of January 17, 2013, at 4.4 [condition not met]). Thus, the erroneous or imprecise wording of an arbitral tribunal does not necessarily cause the arbitration agreement to be invalid (ATF 138 III 2913 at 2.2.3, p. 36, and the cases quoted).


These principles have been confirmed recently again (judgment 4A_676/2014 of June 3, 2015, at 3.2.2).  The arguments advanced by the Appellant must be examined in light of them.


2.2.3. The summary of its argument above (see C.b, §3) shows that the Arbitrator succeeded in establishing the real and mutual agreement of the parties to resort to arbitration. He did so on the basis of the very text of Art. 22 of the Distribution Agreement and by taking into account the subsequent behavior of the two parties (see decision under appeal, n. 52 and 55). This is a factual finding that binds the Federal Tribunal, whether it is founded or not. Thus, the Appellant seeks to challenge it in vain by proposing a different assessment of the information in the arbitration file. It does so as it would in ordinary appeal proceedings, mixing factual and legal arguments and leaving the Court to sort them out, which is not permissible in argumentation concerning an appeal in the field of international arbitration (see Art. 77(3) LTF).


Moreover, even if the Arbitrator’s findings were the result of quod non objective interpretation of Art. 22 of the Distribution Agreement, they could only be approved. The title of the clause in dispute – “ARBITRATION” – written in bold and capital letters, certainly has weight in the analysis of its meaning. In comparison, the general clause inserted in the body of the text of the contract, before Art. 1 with other details, and which states “The headings to clauses are inserted for convenience only and shall not affect the construction of this Contract”14 appears substantially less important. Moreover, the Appellant’s thesis, which sees in the clause in dispute the institution of a double mechanism for the amicable settlement of future disputes is rather artificial because it implies that the parties to the contract would not have considered it necessary to determine in the contract the procedure to be followed should the double attempt at settling the dispute amicably fail. Moreover, once this thesis is rejected, one would still have to explain, by admitting with the Appellant, that the words “empowered jurisdiction of Geneva”15 refer to the Geneva state courts, while the parties adopted a procedural solution which was not admissible under EU law, as the Appellant seeks to demonstrate elsewhere. Incidentally, the adjective empowered, which could be translated into French as “autorisée” or “habilitée” (Dictionnaire juridique Dahl, 3rd ed. 2007, p. 474), does not necessarily refer to a state court as the Arbitrator demonstrates in his interlocutory decision (n. 52) even if the term powered is inadvertently substituted for empowered, as in the clause at hand.


The international nature of the Distribution Agreement also argues in favor of the characterisation held by the Arbitrator. It is indeed rather likely that three commercial companies with their seats in three different countries, which do not all belong to the same economic and legal area – the Russian Republic on one hand, France and the United Kingdom, members of European Union, on the other hand – would have wished to resort to private arbitration instead of submitting to the jurisdiction of a regional court of a third country. It is even more likely because, whether one wants it or not, arbitration tends to become the common law justice of international trade and Geneva is a well-known place of arbitration.


That Art. 22 of the Distribution Agreement may be quite sketchy, to the extent that it should be considered a pathological clause and requires supplementing, is not decisive, as the Arbitrator rightly saw, as the duty of the parties to refer the dispute to a private tribunal may be deduced therefrom. The Appellant’s argument, according to which the jurisdiction clause at Art. 7. Of the 2010 Data Exchange Contract, would have rendered meaningless that at Art. 22 of the 2009 Distribution Agreement cannot succeed.


First, the two contracts do not bind the same parties and B.________ does not appear in the most recent one.


Then, the Data Exchange Contract is a mere annex to the Distribution Agreement, which it supplements rather cancels.


Finally, the second contract in time has a much narrower scope than the first because it concerns the relationships between A.________ and C.________, essentially in terms of pharmacovigilance. The Arbitrator considers that in the arbitral proceedings, the Appellant did not raise the breach of a possible contractual mechanism that would constitute a mandatory prerequisite to the arbitration.


The Appellant does not challenge this finding, which binds the Federal Tribunal in any event. It is therefore in vain that it appears to argue that C.________ did not initiate this procedure. Moreover, the Arbitrator himself finds that “according to their own admissions, the parties proceeded to conciliation” (decision under appeal, n. 57 in fine), which the Respondents moreover demonstrate in their answer to the appeal (n. 35/36) and in their rejoinder (p. 2 in medio). Finally, the various arguments that the Appellant seeks to draw from the procedural steps taken by B.________ on May 22, 2013, as described above (see B), are also doomed, in addition to the fact that they cannot be attributed to the second Respondent, C.________.


To the extent that the Appellant uses it to challenge the interpretation of the Contract by the Arbitrator, it seeks in vain to challenge the subjective interpretation of the clause in dispute, which the Arbitrator carried out on the basis of its text and in view of the subsequent behavior of the parties. Whether in assessing this behavior the Arbitrator sufficiently took into consideration all pertinent circumstances, including what is at issue here, does not change the matter as his approach concerns the facts and therefore cannot be criticized.


Furthermore, the Arbitrator explained why – assuming that the filing of a request for conciliation could be likened to a waiver of the arbitration – the fact that the Appellant did not proceed on the merits before the Geneva court but immediately and spontaneously raised an arbitration defense, did not justify treating B.________’s behavior as a tacit waiver of the arbitration clause in the light of federal case law as to this issue (judgment 4A_579/2010 of January 11, 2011, at 2.2.2 and the references).


Finally, from the point of view of good faith, which also governs arbitration proceedings (judgment 4A_374/2014 of February 26, 2015, at 4.2.2), one may wonder whether it is admissible for a party such as the Appellant to raise an arbitration defense when taken to conciliation in a state court by its opponent, only to argue the Arbitrator’s lack of jurisdiction when the same opponent, agreeing with its views, then files a request for arbitration.


This being so, the argument based on Art. 190(2)(b) PILA proves unfounded insofar as it is not inadmissible.



The Appellant loses and shall pay the costs of the federal proceedings (Art. 66(1) LTF) and pay the costs of the Respondents, which are entitled to them jointly (Art. 68(1) and (2) LTF).





Therefore the Federal Tribunal pronounces:



The appeal is rejected insofar as the matter is capable of appeal.



The judicial costs set at CHF 10’000 shall be borne by the Appellant.



The Appellant shall pay to the Respondents as joint creditors an amount of CHF 12’000 for the federal proceedings.



This judgment shall be notified to the representatives of the parties and to the Sole Arbitrator.




Lausanne, September 15, 2015



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



Presiding Judge:                                              Clerk:


Kiss (Mrs.)                                                       Carruzzo