SFT precedent concerning the waiving of the right to raise appeals against awards of Swiss arbitral tribunals

On 27 October 2017, the Swiss Federal Tribunal (SFT) published on its website a judgment dated 17 October 2017 in which it dealt with an arbitration agreement in which the parties had waived the right to raise an appeal with the SFT against the arbitral award.

The relevant judgment with the reference number 4A_53/2017 has been marked by the SFT as being an important decision that will be included in its official compilation of precedents.

The arbitration clause that has been examined by the SFT in the above-mentioned judgment contained, particularly, the following wording (see consideration 2.2 of the judgment):

“Awards rendered in any arbitration hereunder shall be final and conclusive and judgment thereon may be entered into any court having jurisdiction for enforcement thereof. There shall be no appeal to any court from awards rendered hereunder.”

In its precedent discussed herein, the SFT sets out its prior jurisprudence on Art. 192(1) of the Swiss Private International Law Act (SPILA), being the provision in the Swiss arbitration statute, which permits parties, who are not domiciled or seated in Switzerland, to waive any possibility of appealing the award issued by a Swiss arbitral tribunal.

In an unofficial English translation, Art. 192(1) of the SPILA reads as follows:

“If neither party has a domicile, a place of habitual residence, or a place of business in Switzerland, they may, by an express declaration in the arbitration agreement or in a subsequent written agreement, exclude all appeals against the award of the arbitral tribunal. They may also exclude an appeal only on one or several of the grounds enumerated in Article 190(2) [of the SPILA].”

On the basis of its prior jurisprudence related to the above-mentioned provision, the SFT concluded in the precedent at issue that the above-mentioned clause in question does certainly constitute a valid waiver of the relevant right to appeal, since it undoubtedly underscores the common will of the parties to waive any right of appeal against any decision of the arbitral tribunal before any state court (see consideration 2.2 of the judgment).

More interestingly than the SFT’s conclusion above is the second argument that had been advanced by the appealing party to justify its appeal to the SFT.

Alternatively, the appealing party had argued before the SFT that it was entitled to appeal the relevant arbitral award on the basis of Art. 123(2) of the Swiss Federal Act on the SFT (SFTA), pursuant to which, in essence, an extraordinary appeal in the sense of a “Revision” may be filed with the SFT in civil and public law matters where the requesting party subsequently learns substantial facts or finds decisive evidence which it was unable to provide in the previous proceedings, excluding facts and evidence which arose after the decision.

The SFT first addressed the issue whether or not an extraordinary appeal pursuant to Art. 123(2) of the SFTA may, as a matter of principle, “survive” a valid waiver of appeals pursuant to Art. 192(1) of the SPILA. In other words, the SFT raised the issue of whether a waiver of appeals, which meets the conditions of Art. 192(1) of the SPILA, also includes the waiver of any extraordinary appeal according to Art. 123(2) of the SFTA (see consideration 3.1 of the judgment).

In the judgment discussed in this article, the SFT did not decide the above-mentioned issue, because under the relevant circumstances it found that the appealing party was in any event not entitled to invoke Art. 123(2) of the SFTA, for the following reasons:

In the case at the basis of the SFT precedent discussed herein, the appealing party had learned of the asserted reason for cassation / revision before the expiration of the deadline to file an appeal with the SFT pursuant to Art. 190(2) of the SPILA. The SFT expressed its opinion that (at least) in such circumstances it would clearly amount to an abuse of rights if a party, which had (on the basis of Art. 192(1) of the SPILA) expressly waived its right to appeal the arbitral award with an “ordinary” appeal pursuant to Art. 190(2) of the SPILA, would be allowed to circumvent such waiver by filing an extraordinary appeal pursuant to Art. 123(2) of the SFTA (see consideration 3.2 of the judgment).

The SFT refers to several Swiss legal scholars in this context, and the position of the SFT would appear to be consistent with the general sense of justice.

This article was first published on LinkedIn on 30 October 2017.

PHH, Zurich, 4 January 2018 (www.haberbeck.ch)

The information contained in this post is for general informational purposes only and is not intended to constitute legal advice. Readers of this post should not take any actions or decisions without seeking specific legal advice.

Rechtsgebiete: Allgemeines Vertragsrecht