Switzerland / 03 January 2006 / Switzerland, Tribunal Fédéral (Federal Tribunal) / Y v. X / 5P.292/2005
| Country | Switzerland |
| Court | Switzerland, Tribunal fédéral (Federal Tribunal) |
| Date | 03 January 2006 |
| Parties | Y v. X |
| Case number | 5P.292/2005 |
| Applicable NYC Provisions | V | V(1) | V(1)(b) | V(1)(e) | V(2) | V(2)(b) |
| Source |
http://www.bger.ch (website of Swiss Federal Tribunal) |
| Languages | English |
| Summary | On 28 May 2003, X and Y, two companies engaged in the oil business, entered into a contract providing for the sale and delivery of oil. The contract contained an arbitration agreement providing for arbitration before the Riga Commercial Arbitral Tribunal. A dispute arose and Y seized the commercial arbitral tribunal of Riga which rendered an award on 2 December 2003 in favor of Y (the “First Award”). On 7 January 2004, the District Tribunal of Zimeliai of Riga granted enforcement of the award. Meanwhile, X too filed a Request for Arbitration before the Riga Commercial Arbitral Tribunal requesting the annulment of the contract. On 13 October 2003 the tribunal, ruling in the absence of Y, annulled the contract and directed Y to pay damages to X (the “Second Award”). On 12 January 2004 the the District Tribunal of Zimeliai of Riga refused to enforce the Second Award on the grounds that Y was not properly served notice of the arbitration proceedings. On 15 October 2004 X filed a second request before the Riga Commercial Arbitral Tribunal claiming damages for Y’s failure to perform the contract. Y was properly served notice but did not appear. On 16 November 2004 the Riga Commercial Arbitral Tribunal ruled in favor of X and directed Y to pay damages to X (the “Third Award”). In parallel, on 24 March 2004, Y sought enforcement in Switzerland of the First Award. The Tribunal de Première Instance of Geneva (Geneva Tribunal of First Instance) granted Y an escrow on X’s assets which was subsequently confirmed by the Cour de Justice of Geneva (Court of Justice of Geneva) and the Tribunal Fédéral (Federal Tribunal). At the same time, Y sought recovery of the sums awarded in the First Award and recognition of the said award in Switzerland. X brought an action opposing the execution (“requête de mainlevée”) on the ground that the amount should be set-off with the amounts decided in the Third Award. On 23 March 2005, the Tribunal de Première Instance granted recognition and enforcement to the First Award after off-setting the amount decided in the Third Award. The Cour de Justice of Geneva (Geneva Court of Justice) confirmed the decision of the Tribunal de Première Instance. It considered that compensation between the amounts decided in the First and the Third Award could operate if the Third Award was valid pursuant to the NYC. Analyzing the validity of the Third Award pursuant to the NYC, the Cour de Justice held that recognition and enforcement of an award could only be denied if one of the grounds in Article V(1) NYC was met. It considered that the Third Award was valid as Y did not prove any ground for non-recognition under of Article V(1)(b) NYC, and in particular, it was not disputed that service by simple letter was valid under Latvian law. Y lodged a public law appeal to the Tribunal Fédéral opposing recognition of the Third Award on the grounds that the Cour de Justice did not examine its arguments that the award violated Article V(1)(b) NYC that it did not receive notice of the proceedings leading to the Third Award, Article V(1)(e) NYC that the award had not been enforced in Latvia; and Article V(2)(b) NYC that the award violated Swiss public policy. The Tribunal Fédéral dismissed the appeal. The Tribunal Fédéral held that the Cour de Justice of Geneva examined the ground for non-enforcement based on Article V(1)(b) NYC and considered that service by simple letter was permitted under Latvian law and was therefore valid. The Tribunal Fédéral held that, pursuant to Article V(1)(e) NYC, an award does not need to be enforced in the country where it had been rendered but only be “binding” on the parties, which is the case when the award cannot be challenged by ordinary appeal. The Tribunal Fédéral added that an award would not be binding pursuant to Article V(1)(e) NYC if it had been set aside or was suspended pending annulment proceedings in the country where it had been rendered. The Tribunal Fédéral considered that, in the present case, the award was binding on the parties even though it was non enforceable in Latvia. The Tribunal Fédéral dismissed Y’s argument based on Article V(2)(b) NYC as inadmissible, because it was raised for first time and had not been raised it at earlier stages of the enforcement proceedings. |
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Attachment (2)
 Original Language Adobe Acrobat PDF |
Unofficial Translation Adobe Acrobat PDF |
