X. Sàrl v. Estate in bankruptcy of Y. SA and ad-hoc Arbitral Tribunal c/o Dominique Brown-Berset, Esq. [The Pre-paid Phone Cards] - Swiss International Arbitration Law Reports (SIALR) - 2007 Vol. 1 Nos. 1 & 2

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18 pages

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December, 2007

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Headnote

A procedural decision signed solely by a presiding arbitrator acting

under the UNCITRAL Rules of Arbitration is unobjectionable.

The refusal by an arbitrator to order an additional expert report does

not breach the parties’ right to present evidence.

Whenever an arbitrator has made an award based on the terms of the

contract in dispute, that does not per se amount to a judgment made

solely in equity rather than the agreed proper law of the contract.

Summary of the Decision

X. and Y. entered into a contract whereby X. was to provide

telecommunications traffic to Y. using Y.’s installations, in consideration

for the payment of a fee by X. Subsequently, X. challenged certain

invoices received from Y., and elected to withhold payment, whereupon

Y. ceased to provide its services to X. The arbitrators appointed an expert

to evaluate the invoices, and then made an award in favour of Y. X. then

brought setting aside proceedings on the grounds that the arbitrators (1)

denied justice within the meaning of article 190(2)(c) FPILA (infra

petita) by failing to make a formal decision on a procedural request; (2)

denied the petitioner the right to present its case (as provided under

article 190(2)(d) FPILA) by refusing to order an expert report; and (3)

rendered an award that was inconsistent with public policy by resting its

decision on equity principles as opposed to the proper law of the

contract.

The Federal Supreme Court held: (1) a procedural decision signed

solely by the presiding arbitrator acting under the UNCITRAL Rules did

not constitute a denial of justice under article 190(2)(c) FPILA,

particularly where the presiding arbitrator’s decision had been ratified by

the co-arbitrators, or where the applicable arbitration rules permitted

such decision-making by the presiding arbitrator; (2) a refusal by an

arbitrator to order an additional expert report did not amount to a breach

of the parties’ right to present their case under article 190(2)(d) FPILA,

particularly where no request for such a report was ever made; and (3)

where the parties had expressly agreed on the proper law of the contract,

an award based on the terms of such contract did not amount to a breach

of public policy within the meaning of article 190(2)(e) FPILA (obiter