In principle, if an application for an annulment of an arbitral award is upheld, the Supreme Court may cancel only the award (the so-called 'cassatory' nature of the setting aside proceeding). However, as shown by a recent decision, the Supreme Court's findings underlying a cancellation for the violation of a party's right to be heard seem to qualify as directions for the arbitral tribunal which must remake the decision.
The formal nature of the right to be heard has long been recognised by the Supreme Court. Applied strictly, it entails that an award affected by a violation of such right must be set aside, irrespective of whether the violation affected the outcome of the case. However, the Supreme Court's more recent practice tends to depart from a strict application of the formal nature of the right to be heard and to require the applicant to establish a causal link between the asserted violation and the (adverse) outcome of the case.
The Supreme Court recently set aside an arbitral award issued in a domestic arbitration on the grounds that the arbitral tribunal had drawn consequences from one of two contradictory findings without providing any reasons for its decision. Considering that the test to admit a violation of the right to be heard is the same in domestic and international arbitrations, this decision may be relevant to international arbitration, even though it pertained to domestic arbitration.
The Supreme Court recently dealt with the issue of state immunity in the context of the enforcement of an arbitral award and with the relationship between Swiss procedural law and the New York Convention. It found that state immunity prevents the enforcement of an arbitral award against a foreign state if there is no sufficient connection between the claim and Switzerland, and that this situation does not conflict with Switzerland's obligations under the New York Convention.
The Supreme Court recently rejected a challenge against a partial arbitral award for an alleged violation of the right to be heard and incompatibility with substantive public policy. The case pertained to a contract under which an Austrian company was to supply railway machinery to a Russian company. In its reasoning, the court made a number of considerations which practitioners should bear in mind when challenging an arbitral award.
The Supreme Court recently confirmed its jurisdiction to decide claims secured by a retention right as provided for by Swiss law. The court found that even if the arbitration agreement rather restrictively referred to disputes arising out of the mandate agreement, it had to be understood in good faith as also encompassing disputes in relation to the conclusion and termination of that agreement.
In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the arbitral tribunal had wrongly accepted jurisdiction. Once the existence of an arbitration agreement is established, its scope and content are broadly construed under the assumption that, if they chose to enter into an arbitration agreement, the parties intended to have an arbitral tribunal with broad jurisdiction.
In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the parties had not consented to submit their dispute to arbitration. The decision shows the importance of the distinction between a subjective and objective interpretation. Awards should thus clearly identify for each finding of contractual interpretation whether it stems from subjective or objective interpretation.
In a recently published decision, the Supreme Court rejected a challenge on the basis that the arbitral tribunal's refusal to appoint a tribunal expert was not a violation of the applicant's right to be heard. With respect to the annulment proceedings and grounds for annulment, this decision seems to express limitations to the formal nature of the right to be heard in adversarial proceedings, at least in respect of the right to adduce evidence.
In a recently published decision, the Supreme Court held that an arbitration clause contained a valid waiver of challenge against the award. The court also held that such a waiver extended to the applicant's subsidiary request for revision. When interpreting arbitration clauses to determine whether they contain such a waiver, the term 'appeal' should be understood as referring to the remedy that parties have against an award in Switzerland, namely the challenge proceedings.
In a recently published decision, the Supreme Court partially annulled an award on the grounds that the arbitral tribunal had failed to take into account the claimant's argument in support of one of its prayers for relief. The dispute arose in connection with a tourism project regarding the construction and operation of a hotel and casino in the West Bank. The agreement was governed by Swiss law and provided for arbitration in Zurich.
The Supreme Court recently refused to interfere with a sole arbitrator's decision to extend the timeframe to file the statement of claim. The question may arise again at the enforcement stage in the context of Article V(1)(d) of the New York Convention, which provides that recognition and enforcement of an award may be refused, among other things, if "the arbitral procedure was not in accordance with the agreement of the parties".
According to four recent arbitral decisions, the concept of 'public policy' does not depend on the nature of the underlying dispute; the transfer of bribes is incompatible with public policy only to the extent that bribery is established but not taken into account by the arbitral tribunal; the violation of personality rights is not incompatible with public policy, unless there is a serious violation of fundamental rights; and the rules on the burden of proof are not part of public policy.
The Supreme Court recently admitted a request for revision of an arbitral award based on the subsequent discovery of new evidence in relation to bribery. The court recalled that the revision of arbitral awards can be sought based on the Federal Tribunal Statute and that, among other things, newly discovered evidence must prove either newly discovered facts or facts that were already known in the main proceedings but remained unproven.
In a recent decision, the Supreme Court had to deal with the independence of an arbitrator who was a lawyer in a large international law firm. The court found that there was no indication of a conflict of interest and left undecided the question of whether a revision of an international arbitral award could be sought based on the subsequent discovery of grounds to challenge an arbitrator.
The Supreme Court recently ruled that the parties to an arbitration can validly agree to limit the first phase of the proceedings to one round of written submissions, and that the enforcement of this agreement does not violate the parties' right to be heard. In another recent case, the court held that a dissenting opinion issued by an arbitrator is not part of the arbitral award, has no legal effects and must not be taken into account by the court when deciding a challenge against the award.
The Supreme Court recently annulled an arbitral award for failure to comply with a mandatory pre-arbitration requirement. It held that failure to comply with such a requirement leads to the suspension of the arbitration proceedings until the requirement has been complied with. Despite holding that there may not be a solution applicable to all cases, the decision provides some legal certainty regarding the consequence of failure to comply with a mandatory pre-arbitration requirement.
In a recent decision, the Supreme Court found that an arbitral tribunal may have jurisdiction based on the arbitration agreement contained in a draft contract. The court made clear that the principle of autonomy of the arbitration clause can apply even if the main contract never came into existence and that the invalidity of the main contract may actually affect the validity of the arbitration clause.
A recent decision confirms that the Supreme Court continues to rely on its well-established practice regarding the parties' right to be heard. However, this practice may be perceived to be quite strict for the party that must accept the arbitral tribunal's (sometimes unjustified) refusal to examine the arguments submitted to it, as the court itself acknowledged.
In a recent decision the Supreme Court partially annulled a Court of Arbitration for Sport arbitral award for violation of the plaintiff's right to be heard. This decision confirms that in specific circumstances, arbitral awards may be partially annulled. It also clarifies that public policy does not prevent parties to arbitration from agreeing to limit the arbitrators' power to review the case.