Switzerland / 04 October 2010 / Switzerland, Bundesgericht / 4A_124/2010
Country | Switzerland |
Court | Switzerland, Bundesgericht |
Date | 04 October 2010 |
Case number | 4A_124/2010 |
Applicable NYC Provisions | IV | IV(1) | IV(1)(a) | V | V(1) | V(1)(b) | V(1)(d) | V(2) | V(2)(b) |
Source |
http://www.bger.ch (website of Swiss Federal Tribunal) |
Languages | English |
Summary | The Applicant entered into a sale purchase agreement for sheet steel with the Respondent’s Czechoslovak predecessor company. The parties agreed that disputes under the contract should be resolved by the arbitration court at the Czechoslovak Chamber of Commerce and Industry and that Czech substantive law should apply. After the dissolution of Czechoslovakia, the Respondent initiated arbitration proceedings at the arbitration court of the Chamber of Commerce of the Czech Republic and the Czech Agriculture Chamber. Dismissing the Applicant’s objection to jurisdiction, the arbitral tribunal confirmed its jurisdiction in an interim award followed by a final award in favor of the Respondent. Upon the Respondent’s application, the Bezirksgericht (Regional Court) Zurich recognized the award and declared it to be enforceable. The Applicant appealed to the Obergericht (Higher Cantonal Court) Zurich, which rejected the appeal, except in relation to nominal sums. Thereafter, the Applicant filed a complaint (Beschwerde) before the Bundesgericht (Swiss Federal Tribunal), requesting it to annul the Obergericht’s decision and not to declare the award enforceable. The Applicant alleged that the Obergericht’s decision was incorrect because (i) the Respondent had not submitted all relevant documentation, as required under Article IV(1) NYC, at the time of submission of its original enforcement application and could not submit such documentation later, (ii) the arbitral award of which the Respondent had submitted a certified copy had been signed only by the tribunal chairman, but not by the other two tribunal members, (iii) the enforcement of the award violated Swiss public policy, (iv) the recognition and enforcement violated Article V(1)(d) and (b) NYC because it was issued by a tribunal of the Chamber of Commerce of the Czech Republic and the Czech Agriculture Chamber under the arbitration rules of the same, both of which the parties had not previously agreed to, (v) the arbitrators’ nomination violated Article V(1)(d) NYC since the arbitrators were not appointed by the Czechoslovak Chamber of Commerce and Industry, and (vi) the award violated Article V(1)(d) NYC since the chairman of the tribunal participated both in the decision regarding the Applicant’s jurisdictional defense and the final award, which was not permitted by the applicable arbitral rules. The Bundesgericht upheld the Obergericht’s decision. It found that Article IV(1) NYC did not prevent an enforcement creditor from resubmitting an enforcement application, noting that both international case law and academic literature showed that a subsequent submission of improved documentation in the same proceedings, or the resubmission of an enforcement application together with improved documentation, was permitted. It found that it would contradict the exhaustive enumeration of grounds for refusal of enforcement under Article V NYC, and the required narrow interpretation of such grounds in light of the recognition and enforcement friendly spirit of the NYC, by not permitting the resubmission of a recognition and enforcement application solely on the ground that the possibility of resubmission was not foreseen by the text of the NYC. According to the Bundesgericht, not allowing a resubmission would be equivalent to creating a procedural ground for refusing recognition and enforcement that was not foreseen in the NYC. The Bundesgericht further found that, in the present case, the fact that the award submitted by the Respondent was a duly certified copy which had been signed only by the tribunal chairman did not affect its enforceability. It held that the form requirements under Article IV NYC were not to be interpreted restrictively since it was the purpose of the NYC to facilitate the enforcement of arbitral awards. It moreover held that certification under Article IV(1)(a) NYC meant a confirmation of the authenticity of the award and that such certification was not necessary if the authenticity of the award was not contested at all, as in the present case. Regarding the public policy defense, the Bundesgericht noted that Article V(2)(b) NYC was an exception provision, which was to be interpreted restrictively both generally and even more so in the context of proceedings for recognition and enforcement of foreign decisions in relation to which the public policy defense was more limited compared to the direct application of foreign law. The Bundesgericht stated that the recognition of a foreign award would violate Swiss public policy if it violated the local sense of justice in an unacceptable manner so as to disrespect fundamental provisions of the Swiss legal order. It further clarified that a foreign decision could be incompatible with the Swiss legal order either due to its substantive content or due to a violation of fundamental procedural principles, such as the right to a fair proceeding or the right to be heard. The Bundesgericht found that the Applicant had not shown that the recognition and enforcement of the award would intolerably violate the Swiss sense of justice. As regards the alleged violation of Article V(1)(d) NYC, the Bundesgericht found that it was not a violation of Article V(1)(d) and V(1)(b) NYC, or of party autonomy that the award had been issued by the Chamber of Commerce of the Czech Republic and the Czech Agriculture Chamber, since the Czechoslovak institution originally agreed upon by the parties no longer existed after the dissolution of Czechoslovakia and the acting institution had been determined under a particular Czech law to be its legal successor and that the arbitration rules of the successor institution could indeed be applied given that they did not substantially differ from the old rules and did not reduce the rights of the parties. Based on the same reasoning the Bundesgericht also rejected the alleged violation of Article V(1)(d) NYC in relation to the fact that the arbitrators were not appointed by the Czechoslovak Chamber of Commerce and Industry. Finally, the Bundesgericht rejected the alleged violation of Article V(1)(d) NYC in relation to the chairman’s participation in both the decision about the Applicant’s jurisdictional defense and the final award, finding that the parties had been given an opportunity to object to this but had failed to do so. |
see also : |
Attachment (1)
Original Language Adobe Acrobat PDF |