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Challenges to arbitral decisions on suspension of proceedings only possible before the Swiss Supreme Court if they are implicit decisions on jurisdiction
Practical Law UK Legal Update Case Report 7-506-3183 (Approx. 3 pages)
Challenges to arbitral decisions on suspension of proceedings only possible before the Swiss Supreme Court if they are implicit decisions on jurisdiction
by Practical Law
| Published on 02 Jun 2011 • International, Switzerland |
PD Dr. Nathalie Voser (Partner) and Dr. Patrick Rohn (Associate), Schellenberg Wittmer (Zurich)
In a French-language decision dated 6 April 2011, published on 26 April 2011, the Swiss Supreme Court confirmed that, as a rule, arbitral decisions on suspension of proceedings qualify as procedural orders, which cannot be challenged before the Supreme Court. Only in exceptional circumstances, if the arbitral tribunal in its decision on suspension also implicitly decides on its jurisdiction to hear the case, can the decision be challenged on the ground that the arbitral tribunal wrongfully accepted or declined its jurisdiction.
Background
Article 190(3) together with Article 190(2)(a) and (b) of the Private International Law Act (PILA) stipulate that an interim award rendered by an arbitral tribunal may be challenged only:
- If the arbitral tribunal was constituted in an irregular way.
- If the arbitral tribunal wrongfully accepted or declined jurisdiction.
Facts
On 23 November 2009, YSA (Luxembourg) commenced arbitration proceedings under the ICC Arbitration Rules against X (France). Two months later, on 19 January 2010, YSA and X, together with a third party, were sued by W before a Luxembourg state court. In view of the pending lawsuit before the Luxembourg state court, whose outcome could allegedly have influenced the pending arbitration proceedings, X requested a stay of the arbitral proceedings until the pending court case was resolved.
On 5 October 2010, after the parties had exchanged written submissions and a separate hearing had been convened, the arbitral tribunal issued a procedural order, rejecting X's motion to stay the arbitral proceedings.
X filed a petition with the Swiss Supreme Court, requesting that the arbitral decision rejecting the motion for suspension of the proceedings be set aside, and that the arbitral tribunal be declared to have no jurisdiction to hear the case before the litigation pending in Luxembourg was resolved.
Decision
The Supreme Court denied the admissibility of the petition to set aside.
The Supreme Court confirmed its previous case law that procedural orders which are not final and binding, and which can be reconsidered by the arbitral tribunal, cannot be challenged under Article 190(3) of the PILA. Referring to the procedural order before it, the Supreme Court held that the arbitral tribunal had explicitly reserved its right to reconsider its decision on the stay of the proceedings at a later point in time. The arbitral tribunal had not been invited by the parties to decide on its jurisdiction to hear the case, and it did not do so. The arbitral decision before the Supreme Court therefore qualified as a procedural order stricto sensu, and so could not be challenged.
Comment
When deciding on the petitioner's right to challenge an arbitral decision, the Supreme Court examines the bearing of the decision rather than its designation as a "procedural order" or an "interim award". Only if the arbitral tribunal in the "procedural order" on suspension of the proceedings also implicitly decides on its jurisdiction to hear the case, can the decision be challenged (in accordance with Article 190(3) of the PILA).