Most Read Contributor in Switzerland, February 2017
In a decision of January 24, 2017, the Swiss Supreme Court
rendered once more guidance on the interpretation of flawed
arbitration clauses. At dispute was an arbitration clause concluded
in May 2013 in the context of an international sales agreement
saying that the "International Chamber of Commerce of
Geneva" would be competent to render an award under the
"Rules of Conciliation and Arbitration of the
International Chamber of Commerce".
In August 2014, one party to the international sales agreement
requested an international arbitration procedure under ICC in Paris
which resulted in an arbitral award of October 2016 under the ICC
Rules of Arbitration.
"The Swiss Supreme Court established a constructive
consensus on what the parties might have wanted if they had
realized that pathological arbitration clause."
Upon appeal of the party losing the arbitration procedure in
October 2016, the Swiss Supreme Court decided in January of this
year that the ICC arbitral tribunal had been competent to take the
case, thereby following well established contract interpretation
principles which apply to the interpretation of arbitration clauses
as well. The Swiss Supreme Court was thereby bound by the facts
established in the arbitrational award, what means that a consensus
could not be found on what the future arbitration parties wanted in
substance when concluding the sales agreement of May 2013.
In the absence of the parties' contractual will, the highest
court in Switzerland interpreted the flawed arbitration clause by
applying "good faith" interpretation principles, i.e. the
Swiss Supreme Court established a constructive consensus on what
the parties might have wanted if they had realized that
pathological arbitration clause. Whilst it was clear for the court
that the parties wanted private arbitration instead of state
jurisdiction, it was unclear whether they opted in favor of an
ICC-arbitration under the ICC Rules of Arbitration.
The issue under dispute was that an "International
Chamber of Commerce of Geneva" never existed by this
name, as it was the "Geneva Chamber of Commerce , Industry
and Services" which was competent to handle international
arbitration matters until the enactement of the Swiss Rules
International Arbitration in June 2012. The court also referred the
parties to their consensus on the "Rules of Conciliation
and Arbitration of the International Chamber of
Commerce", what could only reasonably mean that by using
the term "International Chamber of Commerce of
Geneva" the parties concluded on an ICC-arbitration
having its arbitration seat in Geneva.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On 26 October 2016, the Court of Appeal delivered its judgment in Kazakhstan Kagazy Plc & 6 others v (1) Baglan Abdullayevich Zhunus (2) Maksat Askaruly Arip (3) Shynar Dikhanbayeva  EWCA Civ 1036.
With high cost and inefficiency top of the list of party concerns about the arbitral process, institutions, arbitrators, practitioners and indeed legislators are keen to find ways to address those concerns.
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