Narrow interpretation of grounds for refusing recognition and enforcement of foreign arbitral awards
22 December 2014
Authors: Nathalie Voser
, Elisabeth Leimbacher
In a French-language decision dated 15 September 2014 dealing with the recognition and enforcement of a foreign arbitral award, the Swiss Supreme Court concluded that the applicant, who alleged that the communications and submissions in the arbitration had not been properly served on him at his domicile, had validly been notified of the arbitration proceedings. Therefore, the application could not rely on Article V(1)(b) of the New York Convention to resist recognition and enforcement of the award.
The Swiss Supreme Court emphasised that a party may be precluded from relying on a ground for refusal if it behaved in a contradictory manner in the arbitration, for example if it failed to invoke an alleged irregularity during the proceedings, as was the case here.
The Swiss Supreme Court also held that the applicant had failed to explain why it considered that the award was not binding pursuant to Article V(1)(e) of the New York Convention.
Finally, the Swiss Supreme Court re-affirmed that it is not for the enforcement judge to re-examine the merits of the award and that the mere fact that the solution adopted in a foreign award is different from that which would have applied under Swiss law was not sufficient to conclude that the enforcement of such award would be contrary to public policy.
In this case, the underlying dispute concerned legal fees due to an attorney based on a pactum de quota litis (a contingency fee agreement pursuant to which the remuneration depends solely on the outcome of the proceedings, which is prohibited in Switzerland). The Swiss Supreme Court concluded that the amount of the fees was not shocking, so there was no violation of public policy pursuant to Article V(2)(b) of the New York Convention. (Decision 5A_409/2014.)
Published in Practical Law Arbitration
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