COVID-19 / Coronavirus
The world is taking extraordinary steps to fight and delay the spread of COVID-19. At Schellenberg Wittmer, we have taken the necessary steps to protect the health of our employees, our clients and the wider communities we work and live in. Most of our lawyers and staff now work remotely, but we remain fully available and reachable by phone (the normal phone numbers), email, fax and regular mail.

Click here to learn more about our COVID-19 resources. And a compilation of all COVID-19 regulations enacted by the Swiss government can be found here.

Arbitration Case Digest

Extension of arbitration agreement to non-signatory upheld under New York Convention


Case Number: 4A_646/2018 (17 April 2019)

In a recently published German-language decision, slated for publication in the official court reporter, the Swiss Supreme Court upheld a judgment in which a lower court extended an arbitration agreement to a non-signatory because it had intervened in the performance of the main agreement. Moreover, the lower court had also held that an arbitration agreement may be "tacitly prolonged". Accordingly, the lower court declined jurisdiction to hear the claims brought before it and referred the parties to arbitration in accordance with Article II(3) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (NYC).

The case concerned a distribution agreement containing an arbitration clause, between two companies. In practice, a sister company (defendant) of the distributor, which was not a signatory to the distribution agreement, performed the agreement and went on to do so beyond the agreement's initial term. The principal (petitioner) sought payment of the allegedly outstanding amounts from the defendant before the court of competent jurisdiction. The defendant raised an arbitration defence and the principal argued that the defendant was not bound by the arbitration clause given that it did not sign the distribution agreement. In addition, the principal alleged that the tacit prolongation of the term of the distribution agreement did not entail the prolongation of the arbitration clause on the grounds that the latter was separate and independent from the distribution agreement.

In a landmark ruling, the Supreme Court held that where a non-signatory party is involved in the performance of an agreement and shows, by its conduct, that it intends to be party to the agreement and the arbitration clause, an arbitration clause can bind non-signatories under Article II of the NYC. Furthermore, the Supreme Court found that the formal requirements of Article II(2) of the NYC were not a bar to a tacit prolongation of the agreement and the arbitration clause contained therein. (Decision 4A_646/2018 (17 April 2019) (Swiss Supreme Court).)


Subscribe to our Updates

*Required fields

Monthly selected key topics from our practice areas and sectors, plus Newsflashes on current events.
Monthly email with the latest updates on and summaries of the Swiss Federal Supreme Court's case law in arbitration matters.
A regular look (1 – 2 per year) from a unique M&A perspective on legal changes, economic developments and societal trends in Switzerland.
Regular insights on Swiss and international trends and legal developments in the construction industry.
Concise analyses of key trends in the fast moving world of corporate governance for the boards of Swiss companies.