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Swiss Supreme Court considers arbitral jurisdiction in third party context and costs incurred by state proceedings

27 November 2013

Authors: Nathalie Voser, Aileen Truttmann

In 4A_232/2013, the Swiss Supreme Court considered whether an arbitral tribunal had jurisdiction over a claim for amounts due under a distribution agreement containing an arbitration agreement where invoices had been issued by another company and not the supplier. The Supreme Court also considered whether the arbitral tribunal had jurisdiction to grant compensation for costs incurred as a result of state court proceedings started in breach of the arbitration agreement.

In a French-language decision dated 30 September 2013, published on 24 October 2013, the Swiss Supreme Court rejected a petition, confirming that the arbitral tribunal had jurisdiction over a claim made by a supplier against its distributor for amounts due under a distribution agreement.

The Supreme Court ruled that, although the relevant invoices had been sent by another party and not the supplier, that did not alter the fact that the supplier was the sole party to the distribution agreement. The court confirmed that the arbitral tribunal had jurisdiction to resolve the dispute on the basis of the arbitration clause contained in the distribution agreement. The Supreme Court distinguished between the issue of being a party to the arbitration agreement and the issue of having standing to sue, underlining that the former was sufficient to establish jurisdiction.

The Supreme Court also confirmed that the arbitral tribunal had jurisdiction to grant compensation for costs incurred as a result of Greek court proceedings initiated in breach of the arbitration clause. The arbitral tribunal had convincingly explained that it was not encroaching on the Greek court's jurisdiction: it was not ruling on the costs of the proceedings, it was merely ruling on compensation claimed for the costs incurred as a result of the initiation of the state court proceedings (Decision 4A_232/2013).

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Published in Practical Law Arbitration


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