Originally from European International Arbitration Review

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Whether one rejoices over or deplores the decision of the United Kingdom to leave the European Union (EU) is a matter of personal opinion, but the impact of this momentous event can hardly be overstated. It has acute political consequences, one of which may well be the subsequent demise of the EU itself as political movements seeking “Frexit” “Dutchxit” Gerxit” “Polxit” Italxit” “Hungxit” “Ausxit” and the like, gather steam in their respective electorates. The original purpose behind the foundation of the EU, as a way to rebuild and strengthen Europe in the wake of World War II, has been forgotten and has given way to the perception of ‘Brussels’ and ‘Globalization’ as the source of all manner of woes. Economically, Brexit is likely to lead the UK into a recession, which can hardly come as good news to European and, particularly, German exporters. Psychologically it has dealt a devastating blow to the idea – whether fictional or not – that an ever closer union of the people of Europe is the only possible answer to the otherwise inevitable sunset caused by aging populations and the emergence of Asian competitors on the world stage who seem quite prepared to relegate “old” Europe to the status of a second class power.

Constitutionally speaking, Switzerland is not in the EU even though its bilateral agreements with the EU effectively integrate the Confederation into European law . Switzerland cannot be “outside” the EU market – and therefore escape the writ of “Brussels”- no more than land-locked Idaho could secede from the US and pretend to ignore the Federal Reserve or the US Supreme Court. 

However the Swiss Federal Tribunal, which is the highest court in Switzerland, takes the view that an international award issued in Switzerland, which disregards EU public policy – anti-trust rules in particular – is not necessarily contrary to the Swiss perception of international policy. 

The issue arose in 2006 in the framework of a contract concluded in 1998 between two Italian companies, Freyssinet Terra Armata S.R. L (“Freyssinet”) and Tensacciai S.P.A (“Tensacciai”). Governed by Italian law, the contract obliged Freyssinet and Tensacciaito to submit joint bids for the use of specific technologies in the construction of two bridges on the Milan-Naples high speed railway line being contemplated at the time.