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Blogs - Arbitration Case Digest

Application to set award aside due to inarbitrability where petitioner had no interest worthy of protection rejected

26.10.2017 – Case Number: 4A_12/2017 (19 September 2017)

In a French-language decision dated 19 September 2017, published on 4 October 2017 and slated for publication in the official court reporter, the Swiss Supreme Court has rejected a petition to set aside an award in which the arbitral tribunal, seated in Geneva under the auspices of the Swiss Chambers' Arbitration Institution, had explicitly held, in the operative part of its award, that the arbitral proceedings had validated a freezing order which the claimant had obtained against the respondent (petitioner).

The petitioner applied to the court to have the award set aside, arguing that the arbitral tribunal's ruling on the validation of a freezing order did not fall within its competence, as this particular issue is inarbitrable. The petitioner further argued violations of its right to be heard.

The court acknowledged that the validation of a freezing order is a matter reserved for the debt enforcement authorities and, therefore, the arbitral tribunal was not competent to rule on this point. Nonetheless, the court held that the arbitral tribunal's finding did not harm the petitioner. Therefore, the petitioner had no interest worthy of protection in requesting that the award be set aside, based solely on a superfluous finding in the award's operative part.

In respect of the challenge based on the right to be heard, the court also made interesting comments regarding the limitations of requiring written witness statements. The procedural modalities had required a written statement of a witness prior to the examination of that witness. The court rejected the petitioner's arguments that this prevented it from cross-examining a key witness, because the opposing party had not submitted a written witness statement for this individual. The petitioner had not demonstrated that it had made any effort during the arbitration proceedings to have that witness heard, for example, by applying to the tribunal to have the witness examined anyway or by seeking assistance in the taking of evidence from the competent state court judge and was, therefore, precluded from raising the objection at this stage. (Decision 4A_12/2017.)

Published in Practical Law Arbitration