Switzerland / 25 October 2010 / Switzerland, Bundesgericht / 4A_279/2010
| Country | Switzerland |
| Court | Switzerland, Bundesgericht |
| Date | 25 October 2010 |
| Case number | 4A_279/2010 |
| Applicable NYC Provisions | II | II(3) |
| Source |
http://www.bger.ch (website of Swiss Federal Tribunal) |
| Languages | English |
| Summary | An investment company domiciled in the Netherlands Antilles entered into an “Asset Management Facilitation Agreement” (“AMFA”) with a Swiss asset management company. The AMFA provided that disputes should be submitted “to binding arbitration through The American Arbitration Association or to any other US court” and that “[t]he arbitration shall be conducted based upon the Rules and Regulations of the International Chamber of Commerce (ICC 500).” A dispute arose and the investment company sued the asset management company and other respondents before the Kantonsgericht (Cantonal Court) Zug, seeking repayment of a transaction fee and a declaration that the AMFA was void. The asset management company objected to the jurisdiction of the Kantonsgericht based on the arbitration clause in the AMFA. The Katonsgericht rejected the jurisdictional objection and the investment company appealed to the Obergericht (Higher Cantonal Court) Zug. The Obergericht rejected the appeal, finding that no valid arbitration agreement existed between the parties and that the Kantonsgericht was thus competent to decide the case. The investment company then appealed to the Bundesgericht (Swiss Federal Tribunal) requesting that the parties be referred to arbitration, and alleging that the Obergericht’s decision had violated Article II(3) NYC. The Bundesgericht (Swiss Federal Tribunal) dismissed the appeal, thus affirming the invalidity of the arbitration clause. The Bundesgericht stated that because the alleged arbitration agreement foresaw the competing jurisdiction of a foreign arbitration tribunal, the question of jurisdiction had to be decided based on the NYC. It also noted that since Switzerland had withdrawn its reciprocity reservation to the NYC, the NYC was applicable whether or not the arbitration award would have been issued in a contracting party to the NYC. The Bundesgericht observed that under the NYC, the jurisdiction of a state court could be derogated in favor of an arbitral tribunal if a party raised the existence of an arbitration agreement in state court proceedings, provided that the requirements of Article II(3) NYC were met, i.e., that the agreement was not null and void, inoperative or incapable of being performed. The Bundesgericht noted that the lower courts had determined that the parties had not specifically agreed on the law applicable to the arbitration agreement, and that this would generally lead to the application of the lex arbitri. However, since none of the parties had declared an interest in the application of a foreign law, the lower courts had instead applied Swiss law. The Bundesgericht observed that since none of the parties had contested the possible application of Swiss law, it could apply Swiss law to determine the validity of the arbitration clause. It found that it would first need to determine whether the relevant clause in the AMFA showed, beyond doubt, the will of the parties to refer disputes under the agreement to a private arbitral tribunal to the exclusion of the jurisdiction of state courts, and only if that was the case, would it need to determine whether the arbitration clause was sufficiently clear as to the arbitral institution that was to administer the arbitral proceedings. It stated that the determination of whether the parties had agreed to resolve their disputes by arbitration needed to be made by interpreting the arbitration agreement in accordance with the general principles for the interpretation of private declarations of will, according to which the court needed to determine the actual will of the parties and, if that was not possible, the will of the parties from the perspective of an objective third party in light of the principle of good faith. The Bundesgericht held that it needed to adopt a restrictive interpretation with respect to the question of whether the clause contained an agreement to arbitrate, because the choice to refer disputes to arbitration had many implications considering that arbitration proceedings were generally more costly than state court proceedings and limited recourse to higher instances. However, it held that once a court reached the conclusion that the parties had indeed opted for arbitration, it needed to interpret the arbitration agreement in a way that, if possible, sustained the validity of the arbitration agreement such that an imprecise or defective reference to an arbitral tribunal did not result in the invalidity of the arbitration agreement. The Bundesgericht found that the wording of the relevant clause in the AMFA was not sufficiently clear so as to exclude the jurisdiction of the state courts beyond doubt. The Bundesgericht, having thus found the arbitration agreement to be void, concluded that it need not decide whether the arbitration clause was incurably pathological or not. |
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Attachment (2)
 Original Language Adobe Acrobat PDF |
Unofficial Translation Adobe Acrobat PDF |
