Two investment arbitration awards upheld: corruption and illegality allegations must be based on facts in award or on general knowledge

In two recently published German-language decisions dated 12 December 2019, the Swiss Supreme Court refused to set aside two investment arbitration awards issued by the Permanent Court of Arbitration (PCA) in proceedings between Ukrainian claimants and the Russian Federation (which had not participated in the arbitration proceedings). The Russian Federation challenged the two awards before the Supreme Court, arguing that the awards were contrary to Swiss substantive public policy as they ordered the compensation of investments that were tainted by illegality and corruption. Moreover, the Russian Federation argued that the arbitral tribunal had ruled on the preliminary issue of the sovereign status of Crimea, which is an issue that is not arbitrable pursuant to Article 177(1) of the Swiss Private International Law Act (PILA).