Case Law
Switzerland / 02 July 2012 / Switzerland, Bundesgericht / 5A_754/2011
| Country | Switzerland |
| Court | Switzerland, Bundesgericht |
| Date | 02 July 2012 |
| Case number | 5A_754/2011 |
| Applicable NYC Provisions | IV | IV(1) | IV(2) | V | V(2) | V(2)(b) | VII | VII(1) |
| Source |
http://www.bger.ch (website of Swiss Federal Tribunal) |
| Languages | English |
| Summary | The parties entered into an exclusive distribution and licensing agreement, which provided for arbitration under the Rules of the International Chamber of Commerce (“ICC”) by a sole arbitrator in London. A dispute arose and the licensor initiated arbitration proceedings. The sole arbitrator rendered an award prohibiting the licensee from further using certain trademarks belonging to the licensor, while at the same time ordering the licensor to make certain payments to the licensee, including payments for its arbitration costs. The licensee sought leave to enforce its award from the Bezirksgericht (Regional Court) Höfe, which essentially granted the request. The licensor appealed, unsuccessfully, to the Kantonsgericht Schyz (Cantonal Court) Schwyz, and subsequently to the Bundesgericht (Swiss Federal Tribunal). The licensor contented that the licensee’s submission of only a partial translation of the English arbitral award into German violated Article IV(2) NYC, which, it argued, mandatorily required the submission of a German translation of the full text of the arbitral award which was sought to be enforced, regardless of whether the court was capable of understanding the award in the English. It also argued that recognition and enforcement of the award would violate Swiss public policy under Article V(2)(b) NYC since the arbitral award ordered it to bear the full costs of the arbitration. The Bundesgericht dismissed the licensor’s appeal, upholding the decision granting leave to enforce the award. The Bundesgericht stated that there were differing views on the interpretation of Article IV(1) NYC both in academia and in court practice, and found that under Articles 31-33 of the Vienna Convention on the Law of Treaties the provision needed to be interpreted with a view to good faith, in conformity with its common meaning and in the light of its object and purpose. The Bundesgericht stated that the purpose of the NYC was to facilitate the recognition and enforcement of foreign arbitral awards, which required the enforcement-friendly interpretation of its norms. Moreover, the Bundesgericht found that Article IV(2) NYC served the function of enabling the enforcement court to evaluate possible grounds to refuse enforcement under Article V NYC based on a version of the arbitral award in a language that it could understand. The Bundesgericht further recalled that its prior case law indicated that form requirements under Article IV NYC were not to be applied restrictively. It concluded that it would be purely formalistic to require a full translation of the award in the present case, given that the licensee had provided a translation of the award’s dispositive section and of the section on costs that was disputed between the parties and which could have formed the basis of a possible defense under Article V NYC. In addition, the Bundesgericht found that Swiss courts nowadays normally do not depend on a translation in the case of English-language arbitral awards, so that the non-provision of a full translation did not endanger the purpose of Article IV(2) NYC. The Bundesgericht thus concluded that based on a flexible, pragmatic and non-formalistic interpretation of Article IV(2) NYC, the provision of only a partial translation of the arbitral award was sufficient, and that a more restrictive interpretation would run counter to the recognition and enforcement friendly spirit and objective of the NYC. The Bundesgericht also noted that the licensor had not claimed that it required a translation of the full award to safeguard its own legal rights. It also held that since it had interpreted Article IV(2) NYC as not requiring a translation of the entire award, it did not need to decide whether the same result could have been reached by application of more lenient requirements under Swiss domestic law in accordance with Article VII(1) NYC. As regards the licensor’s argument that the recognition and enforcement of the award would violate Swiss public policy, the Bundesgericht held that it did not need to address this defense since the licensor had in this regard simply resubmitted the same arguments that it had previously submitted to the Kantonsgericht, without addressing the Kantonsgericht’s reasoning for why the enforcement of the cost award did not violate Swiss public policy. |
Attachment (2)
 Original Language Adobe Acrobat PDF |
Unofficial Translation Adobe Acrobat PDF |
