Finland / 27 February 1989 / Finland, Supreme Court / Bankruptcy estate of Kommandiittiyhtiö Finexim O. Ivanoff (Finexim) and Ferromet Aussenhandelsunternehmen / S88/310
| 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. |
Attachment (1)
 Original Language Adobe Acrobat PDF |
