X. Ltd. and Y. Ltd. v. Z. Inc. [The Supply of South-African Fluorspar] No. 4A_240/2009 - Swiss International Arbitration Law Reports (SIALR) - 2010 Vol. 4 Nos. 1 & 2

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

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No. 8

X. Ltd. and Y. Ltd. v. Z. Inc.

[The Supply of South-African Fluorspar]

No. 4A_240/2009

Headnote

■ Setting aside proceedings are a remedy such that where a

petitioner is successful, the challenged award can only be set aside.

Where a petitioner seeks a decision on the merits from the Federal

Supreme Court, such a prayer for relief is therefore inadmissible

(confirmation of previous decisions).

■ Where the parties’ agreement provides for the application of

Swiss law on the merits and contains the expression “material

breach”, an arbitrator may resort to the Vienna Convention on the

International Sale of Goods and the UNIDROIT Principles of

International Commercial Contracts in order to interpret and

construe such expression.

■ An arbitrator has a duty to give the parties an opportunity to

express their views when he intends to rest his decision on an

authority or legal ground on which neither party has relied in the

proceedings and the relevance of which could not be reasonably

anticipated (confirmation of previous decisions).

■ An award will be set aside due to a breach of a party’s right to

present its case only provided that a manifestly inadvertent mistake

or omission by the arbitrator is found in the award. The party

complaining of such a breach must have been denied an opportunity

to present its case on a point relevant to the arbitrators’ decision

(confirmation of previous decisions).

Summary of the Decision

By an agreement dated 16 February 2001 X. Ltd. and Y. Ltd. undertook

to supply Z. Inc. with fluorspar. X. Ltd. and Y. Ltd. terminated the

contract forthwith on the ground that Z. Inc. was in “material breach”

under the terms of the contract. Z. Inc. initiated ICC arbitration, arguing

inter alia that X. Ltd. and Y. Ltd. were not entitled to terminate the

contract. X. Ltd. and Y. Ltd. filed a counterclaim. The arbitral tribunal

made an award for Z. Inc. and dismissed the counterclaim.

X. Ltd. and Y. Ltd. brought setting aside proceedings before the

Federal Supreme Court.