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Finland / 09 September 1992 / Finland, Supreme Court / Mr. Reijo Harnos and Mr. Lauri Silanterä/estate of Mr. Tauno Silanterä / S91/1064
Country Finland Court Finland, Supreme Court Date 09 September 1992 Parties Mr. Reijo Harnos and Mr. Lauri Silanterä/estate of Mr. Tauno Silanterä Case number S91/1064 Applicable NYC Provisions V | V(1)(c) Source www.finlex.fi Languages English Summary Tauno Silanterä had purchased diamonds from Reijo Harnos pursuant to three Sales Agreements, which included non-disclosure provisions, and arbitration agreements referring disputes to be resolved by arbitration in Hamburg, West Germany. A dispute arose following the death of Tauno Silanterä, when his son, Lauri Silanterä, sought to avoid the contracts in the District Court of Helsinki, seeking interim measures and claiming that Reijo Harnos had not entered into the agreements in good faith. The District Court granted interim measures against Reijo Harnos, but the main claim was later rejected. Reijo Harnos commenced an arbitration against Lauri Silanterä claiming damages on the grounds of breach of the non-disclosure agreement and harm caused by the interim measures. An award was rendered on 22 July 1990 in West Germany in favor of Reijo Harnos, who sought enforcement in Finland. Lauri Silanterä objected to the enforcement of the award on the grounds that the jurisdiction of the tribunal was limited to the disputes arising out of the Sales Agreements entered into between Reijo Harnos and his father Tauno Silanterä. He argued that the issues regarding damages arising from the interim measures and harm to Reijo Harnos’ reputation did not fall within the scope of the arbitration clauses contained in the Sales Agreements, and that the dispute was not between the parties to those arbitration clauses. Turun ja Porin lääninhallitus (State Provincial Office of Turku and Pori) held that the award should be enforced in Finland, because the arbitral tribunal had assumed jurisdiction over the disputed issues and because Lauri Silanterä had not provided any evidence that the enforcement should be rejected pursuant to Article V NYC. Upon appeal by Lauri Silanterä, Turun hovioikeus (Turku Court of Appeals) rejected the action for enforcement under Article V(1)(c) NYC, reasoning that the claimed damages for the harm caused by the interim measures did not fall within the jurisdiction of the arbitral tribunal. Reijo Harnos appealed. Korkein oikeus (Supreme Court of Finland) overruled the decision by reasoning that the party founding their objection on Article V(1)(c) NYC needs to prove that the award governs an issue outside the scope of the arbitration agreement, which it concluded was not the case in the dispute in question. Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=1562&opac_view=6 Attachment (1)
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Country Finland Court Finland, Supreme Court Date 27 February 1989 Parties Bankruptcy estate of Kommandiittiyhtiö Finexim O. Ivanoff (Finexim) and Ferromet Aussenhandelsunternehmen Case number S88/310 Applicable NYC Provisions V | V(2)(a) | V(2)(b) Source www.finlex.fi Languages English Summary Ferromet Aussenhandelsunternehmen (Ferromet) sold Kommandiittiyhtiö Finexim O. Ivanoff (Finexim) steel plates pursuant to five Sales Agreements including provisions on the reservation of the title to the goods. An arbitration clause providing for arbitration under the Court of Arbitration of the Czechoslovakian Chamber of Industry and Commerce, was included in the General Conditions of Export of the Sales Agreements. Finexim went bankrupt before the purchase price was paid and a dispute arose when Ferromet unsuccessfully requested the recession of the goods. On 27 February 1986, an award was rendered in Czechoslovakia in favor of Ferromet, who subsequently sought enforcement in Finland. Finexim’s bankruptcy estate opposed the action for enforcement on the grounds that the award was rendered against the bankrupt company instead of the bankruptcy estate and would therefore result in a different outcome than if the dispute had been decided in accordance with mandatory Finnish bankruptcy legislation, and enforcement would therefore be against Finnish public policy within the meaning of Article V(2)(b) NYC. The bankruptcy estate also argued that the tribunal had decided issues outside the scope of the arbitration agreement, which constituted a ground for non-enforcement under Article V(1)(c) NYC. Furthermore, Finexim’s bankruptcy estate argued that the enforcement of the award should be refused pursuant to Article V(2)(a) NYC because it would determine the issue of what is included in the bankruptcy estate, a question which is not arbitrable under Finnish bankruptcy law, which it argued constituted a further ground for non-enforcement under Article V(2)(b) NYC. Tampereen maistraatti (Tampere Register Office) decided that the award should be enforced, and rejected the objections that the dispute was governed by Finnish bankruptcy law and that the award decided issues outside the scope of the arbitration agreement. It further reasoned that the grounds for refusal of recognition and enforcement set forth in Articles V(2)(a) and V(2)(b) NYC did not exist in the present case, making the award enforceable. Finexim’s bankruptcy estate appealed at the Turun hovioikeus (Turku Court of Appeals), which affirmed the decision of Tampereen maistraatti, and then appealed the decision to the Korkein oikeus (Supreme Court). The Supreme Court of Finland affirmed the decision of Turun hovioikeus, reasoning that the enforceability of an arbitral award against a bankruptcy estate should be assessed pursuant to territorial jurisdiction under Finnish law. The Supreme Court reasoned that because the bankruptcy estate had sold the goods regardless of the arbitral claimant’s demand to separate the goods from the bankruptcy estate, the award concerned a debt of the bankruptcy estate and was therefore enforceable. Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=1561&opac_view=6 Attachment (1)
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Finland
Date of signature 29 December 1958 Date of ratification 19 January 1962 Instrument of ratification Decree No. 8/1962 of 2 March 1962
Date of entry into force 19 April 1962 Reservations No reservation
National Arbitration Act in force Arbitration Act (967/1992, as amended) [Original in Finnish | Translation in English], Code of Judicial Procedure (4/1734, as amended) [Original in Finnish | Translation in English], Enforcement Code (705/2007, as amended) [Original in Finnish | Translation in English]
Domestic Court with jurisdiction over recognition and enforcement of foreign award Court of first instance, i.e., district court
Author(s) and Contributor(s) Anna-Maria Tamminen (Hannes Snellman Attorneys Ltd)
More information... https://newyorkconvention1958.org/index.php?lvl=cmspage&pageid=11&menu=574&opac_view=-1
