Switzerland / 19 December 1997 / Switzerland, Bundesgericht / Compañìa Minera Condesa SA und Compañía de Minas Buenaventura SA v. BRGM-Pérou S.A.S. und Tribunal Arbitral CIA
| Country | Switzerland |
| Court | Switzerland, Bundesgericht |
| Date | 19 December 1997 |
| Parties | Compañìa Minera Condesa SA und Compañía de Minas Buenaventura SA v. BRGM-Pérou S.A.S. und Tribunal Arbitral CIA |
| Applicable NYC Provisions | II | II(3) |
| Source |
http://www.bger.ch (website of Swiss Federal Tribunal) |
| Languages | English |
| Summary | The second Claimant, the Respondent, and a target company in Peru signed a protocol setting out the modalities under which the second Claimant’s group of companies could participate in the target company. In addition, the parties to the protocol agreed that the bylaws of the target company should be amended to include a pre-emption right for the shareholders in the event that shares of the target company were being sold to a third party belonging neither to the second Claimant’s group of companies nor the Respondent. Both the protocol, and the amended by-laws of the target company, contained an arbitration clause. When the Respondent’s parent company, which had been involved in the discussions about the second Claimant’s participation in the target company, sold a significant number of its shares in the target company to an Australian third party, the second Claimant and the first Claimant filed a lawsuit before the state courts in Lima against both the Respondent and its parent, alleging a violation of the pre-emption right. The Respondent objected to the jurisdiction of the Lima courts based on the existence of an arbitration agreement. The Lima court rejected the defense and declared that it had jurisdiction to hear the case. Meanwhile, the Respondent also initiated arbitration proceedings in Zurich, seeking a declaration that the arbitral tribunal had jurisdiction over the dispute and that the pre-emption right had not been violated. The Claimants raised a lis pendens defense before the arbitral tribunal which it rejected, issuing an interim award affirming its jurisdiction to hear the case. The Claimants then filed a complaint with the Bundesgericht (Swiss Federal Tribunal) reiterating their lis pendens defense. The Bundesgericht dismissed the complaint, holding that pending foreign court proceedings could exclude the jurisdiction of an arbitral tribunal in Switzerland only if a decision of the foreign court could be recognized in Switzerland under Article 25 of the Swiss Private International Law Act, which, required, inter alia, that the foreign court had jurisdiction to decide the dispute in question. The Bundesgericht noted that both Peru and Switzerland were contracting parties to the NYC and that under Article II(3) NYC a contracting party’s court, upon application of one of the parties, was to refer the parties to arbitration if the disputed matter was subject to an arbitration agreement, unless it found that such agreement was null and void, inoperative or incapable of being performed. It further clarified that the court’s jurisdiction would then be derogated to the arbitral tribunal irrespective of whether arbitral proceedings had already been initiated. On that basis, the Bundesgericht concluded that a foreign court, which fails to refer the parties to arbitration even though the conditions of Article II NYC are met, lacks indirect jurisdiction under Article 25 of the Swiss Private International Law Act, and its decision could therefore not be recognized in Switzerland, except if the arbitral tribunal found that it did not have jurisdiction, or if a reviewing court determined that the arbitral tribunal lacked jurisdiction. The Bundesgericht further noted that the Lima court had rejected the arbitration defense primarily on the ground that the dispute involved parties which had not signed the arbitration agreement. It observed that the Lima court could have asserted jurisdiction only in relation to these parties and that the risk of conflicting decisions did not result in making the arbitration agreement void or inoperable under the NYC. The Bundesgericht thus concluded that the Lima court’s decision could not be recognized in Switzerland, unless it were to turn out that the arbitral tribunal had wrongly assumed that it had jurisdiction. |
Attachment (1)
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