Bank X. v. Company Y. [The Delivery of Ceramic Production Equipment to Ukraine] No. 4A_414/2010 - Swiss International Arbitration Law Reports (SIALR) - 2010 Vol. 4 Nos. 1 & 2

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November, 2013

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Originally from:

Swiss International Arbitration Law Reports 2010 Vol. 4 Nos. 1 and 2

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No. 41

Bank X. v. Company Y.

[The Delivery of Ceramic Production Equipment to Ukraine]

No. 4A_414/2010

Headnote

■ In setting aside proceedings against an arbitral award the Federal

Supreme Court will decide on the basis of the facts found by the

arbitrator. The Court is not entitled to review the arbitrator’s

findings of fact, further to a complaint made by the petitioner, or to

correct or supplement them of its own motion (confirmation of

previous decisions).

Summary of the Decision

The legal predecessor of Company Y. was the beneficiary of two bank

guarantees issued by the legal predecessor of Bank X. in connection with

two contracts providing for the delivery of equipment for the production

of ceramic to Company Z. On two occasions, Company Y.

unsuccessfully called one of the guarantees. Bank X. refused to pay

alleging that there were inconsistencies in the call to the guarantee.

Company Y. brought arbitration proceedings against Bank X. claiming

damages. An ICC tribunal made an award for Company Y.

Bank X. applied to the Federal Supreme Court seeking a decision

setting aside the award and remitting the case to the arbitral tribunal for a

fresh decision.

The application was denied.

The Court held that it was bound in principle by the facts found by the

arbitral tribunal. The Court had the power to review the findings of fact

underlying the award sought to be set aside provided that one of the

complaints enumerated in article 190(2) FPILA was raised against such

findings or if new facts were exceptionally taken into account in setting

aside proceedings. In its submissions, the petitioner departed in several

respects from the findings of facts made by the arbitral tribunal or

supplemented them, without raising any sufficient grounds to complain

of the tribunal’s findings. Such submissions were therefore inadmissible.

The Court reiterated that a decision would run counter to public policy

only when it disregarded fundamental principles of law and was

therefore inconsistent with essential and generally recognised values

underlying any and all systems of law according to the prevailing