In a French-language decision dated 24 May 2018, but only recently published, the Swiss Supreme Court dismissed a challenge to set aside a partial award for alleged violation of the right to be heard and breach of substantive public policy.
In the underlying arbitration, the arbitral tribunal had to decide on the validity of a unilateral termination of a supply contract between an Austrian company and a Russian company. The contract between the parties was for the delivery of railway related equipment and provided for a termination right in the event of delays in the delivery of the equipment. Following the termination of the contract by the Russian company, which the Austrian company opposed, the Russian company commenced arbitration proceedings. By way of a partial award, the arbitral tribunal found that the termination was invalid and dismissed the Russian company's claims.
The Russian company challenged the partial award arguing that its right to be heard and substantive public policy had been violated. The court rejected the challenge dismissing both grounds relied upon by the Russian company. In its decision, the court highlighted the following:
- A blanket reference to long excerpts of the briefs submitted in the arbitration proceedings is insufficient to meet the minimum substantiation requirements imposed by the applicable rules.
- If an arbitral tribunal fails to address in its award, a point of fact or law argued by one of the parties, the parties' right to be heard is only violated, if the issue is potentially crucial for the outcome of the dispute.
- An arbitral tribunal does not have a duty to itself locate any relevant evidence in the exhibits submitted.
- If an arbitral award relies on several, alternative grounds, a petitioner is obliged to challenge all of them failing which the challenge would be inadmissible.
This decision is noteworthy because the court highlights key practical considerations for practitioners to bear in mind when bringing an application to challenge the decision of an arbitral tribunal before the Swiss Supreme Court.
Source: Decision 4A 491/2017,(24 May 2018) (Judges Kiss, (President) Klett and Niquille).