X. A.Ş. v. Y. GmbH [The Turkish Fertilizer Plant] No. 4A_224/2008 - Swiss International Arbitration Law Reports (SIALR) - 2008 Volume 2 No. 2

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December, 2008

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Headnote

■ Standing to bring setting aside proceedings against an arbitral

award before the Swiss Federal Supreme Court requires an interest

that is personal, actual and protected by law.

■ An agreed waiver of setting aside proceedings against arbitral

awards before the Swiss Federal Supreme Court (an exclusion

agreement) must be stated in express terms.

Summary of the Decision

X. A.Ş., a company owning a plant manufacturing fertilizer, entered

into a contract with Y. GmbH, a contractor, to have its production plant

renovated and upgraded. The parties inter alia agreed upon a bank

guarantee to be provided by Y. GmbH. A dispute arose regarding

malfunctions and defects in the plant, and the owner refused to sign the

acceptance certificate as a consequence. The contractor took the view

that the remaining malfunctions and defects had been caused by the

owner improperly operating and maintaining the plant. The owner

nevertheless attempted to call the bank guarantee.

The contractor obtained a preliminary injunction before a Finnish

court against the bank. The owner in turn obtained an attachment order

and an order seizing assets of Bank A. from Turkish courts. The

contractor then initiated arbitration proceedings before an ICC arbitral

tribunal in Bern, Switzerland; the court proceedings in Finland were

stayed, while the appeal proceedings in Turkey continued. The

contractor among other things requested the arbitral tribunal to order the

owner to surrender the original deed of the bank guarantee. The

arbitrators made a partial award dismissing the owner’s objection to

arbitral jurisdiction and enjoining it from calling the bank guarantee in an

amount exceeding EUR 1,000,000.00. They further dismissed the

contractor’s request for an order directing the owner to surrender the

original deed of the bank guarantee.

The owner brought setting aside proceedings against the partial

arbitral award before the Swiss Federal Supreme Court. It sought inter

alia to have the partial award set aside in so far as the arbitrators

assumed jurisdiction over the contractor’s request for an order that the