Legal update: case report | Published on 31-Jul-2019 | Switzerland

In Decision 4A_66/2019, the Swiss Supreme Court dismissed an application to set aside an award and found that the arbitral tribunal had not violated the appellant's right to be heard, as the arbitral tribunal had in fact considered Article 101 of the Treaty on the Functioning of the European Union on unfair competition. In addition, it held that where the appellant does not challenge all the grounds that form the basis for the outcome in the award, such application is inadmissible.

The Swiss Supreme Court has dismissed an application to set aside an award, finding that the arbitral tribunal had not violated the appellant's right to be heard. It reached its decision despite finding that where an appellant does not challenge all the grounds that form the basis for the outcome in the award, such application is inadmissible.

The dispute underlying the French language decision dated 17 June 2019 (but published on 17 July 2019) arose in connection with a contract between a Bulgarian company (appellant) and a Russian company (respondent) for the supply of gas (supply contract). The supply contract was amended several times until the respondent decided not to renew it.

The appellant initiated arbitration proceedings arguing, amongst other things, the violation of Article 101 of the Treaty on the Functioning of the European Union (TFEU) on unfair competition. The tribunal dismissed all of its claims. The appellant challenged the award, alleging that the tribunal had not examined its argument based on Article 101 TFEU relating to a specific time period, therefore violating its right to be heard.

The court acknowledged that the tribunal had not expressly referred to Article 101 TFEU, at least not with regard to the particular time period at stake, and that it would indeed have been preferable in view of the clarity of the decision to mention this provision specifically. However, the content of the award evidenced that the tribunal had addressed the appellant's arguments based on this provision for other time periods and had rejected them. Thus, there was no violation of the right to be heard with regard to the violation of Article 101 TFEU. Additionally, the court recalled that, where there are several alternative grounds for a decision, the appellant must challenge each ground separately and show that there is a ground for setting aside, failing which the appeal shall be declared inadmissible. In the case at hand, the appellant had only challenged one ground. Thus, the court could have declared right away that it would not enter into the subject matter, but nevertheless analysed the alleged violation of the right to be heard.

Case: Decision 4A 66/2019 (17 June 2019) (Swiss Supreme Court).