Swiss Federal Tribunal: Incomplete arbitral award may still trigger the appeal period

At the beginning of November 2019, the Swiss Federal Tribunal (SFT) uploaded a new decision to its website, which deals with an appeal against an arbitral award rendered by the sole arbitrator Thomas Barth on 17 October 2018 in an international commercial arbitration under the auspices of the ICC, between a company incorporated under the laws of Azerbaijan (the Appellant) and a company incorporated under the laws of the People’s Republic of China. The relevant SFT decision with the case number 4A_264/2019 is dated 16 October 2019.

The arbitral award at issue had been submitted to the Appellant’s counsel by courier on 23 October 2018, after that the decision had been sent informally by email in advance. Pursuant to the relevant Swiss statute, the Appellant had to meet a deadline of 30 days to file an appeal with the SFT against the award, i.e., until 23 January 2019. However, the appeal had been filed with the SFT only at the end of May 2019, i.e., significantly past the mentioned deadline.

With regard to its failure to meet the deadline, the Appellant had, in essence, asserted that the original copy of the award sent by courier was incomplete, as several pages were missing, including the pages with the dispositive and the arbitrator’s signature. Pursuant to the Appellant, the award received by it on 23 October 2018 was to be declared null and void because of its incompleteness, with the consequence that it had yet to be served with a complete original copy signed by the sole arbitrator, and that the time limit for filing an appeal with the SFT does not begin to run until such event.

Referring to the fundamental principle of good faith, which has constitutional status under Swiss law, the SFT rejected the Appellant’s argument, in essence holding that the Appellant should have immediately asked the ICC for a complete original of the award, which would have put the Appellant into a position to file an appeal with the SFT significantly earlier than at the end of May 2019. In essence, and slightly paraphrasing the highest Swiss court, the SFT stated what follows (consideration 1.4 of 4A_264/2019):

The Appellant alleges that several pages were missing from the copy of the award sent to it. To the extent that the Appellant attempts to infer from this that the notification of the decision was not effected or was to be considered null and void, it cannot be followed. It knew that an arbitral award had been made and realized that the ICC Secretariat wanted to serve it on it. According to its own account, it was aware of the contents of the decision, which it had received informally by email. The Appellant was able to see from mere inspection of the formally correctly served original decision that – as it claims – at least part of the dispositive and the signature of the sole arbitrator were missing. Therefore, with the necessary attention, the Appellant was not only in a position, but also required pursuant to the principle of good faith, to report the incompleteness of the decision to the ICC Secretariat immediately after receipt of the award and to demand that it be delivered in full. After failing to do so, it forfeited its right to a new service; for the statutory period of 30 days for filing an appeal with the SFT has long since expired, even if it is assumed that it is a new service of the complete decision – asked for immediately, in compliance with the principle of good faith – that would have triggered such 30-day period.

The SFT is right. A party who receives an incomplete award, rendered by a tribunal seated in Switzerland, must immediately request a complete copy and make every effort to still comply with the 30-day appeal period. Otherwise, it risks missing such deadline.

Philipp H. Haberbeck, Zurich, 11 November 2019 (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. Any mandate is subject to the full execution of an engagement letter.

Rechtsgebiete: Allgemeines Vertragsrecht