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Case Number: 4A_294/2019 (13 November 2019)
In a recently published German-language decision, the Swiss Supreme Court partially granted the parties' respective applications to set aside an International Chamber of Commerce (ICC) award on grounds of extra petita.
The court found that the arbitral tribunal had gone beyond the scope of the parties' prayers for relief by essentially treating the claimant's requests for declaratory relief as claims for performance, that is, for payment of damages.
Further, the court rejected the claimant's argument that the award was incompatible with substantive public policy because the arbitral tribunal had awarded contractual penalties, despite performance having become impossible.
This case presented the Swiss Supreme Court with the rare opportunity to rule on an extra petita application, which also led to the even rarer occurrence of a partial setting aside of an arbitral award. The decision serves as a reminder that arbitrators are prohibited from "correcting" the parties' prayers for relief. A tribunal may be tempted to do so if it is unclear why a party requested "only" declaratory relief instead of payment, or where the absence of a payment claim may even seem nonsensical. However, it is up to the parties and their counsel alone to decide what the tribunal should rule upon. (Decision 4A_294/2019 (13 November 2019).)
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