Originally from: 
Swiss International Arbitration Law Reports (SIALR) - 2008 Volume 2 No. 1

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No. 3

X. SA. v. Y., Inc.
[The Not-So-White Boron Nitride]
No. 4A_352/2007
Headnote
The parties’ right to present their case imposes a duty on an
arbitrator to deal with the facts, law and evidence presented by the
parties and which are pertinent to the arbitrator’s decision; an
arbitrator has to provide a minimum of reasons in this respect.
An arbitral award dismissing a claim on grounds set out even
implicitly complies with such minimum standard.
Summary of the Decision
A. and Y. entered into a contract by which Y. was appointed A.’s
exclusive distributor of the boron nitride manufactured by A. Y.
terminated the contract, and A. brought arbitration proceedings against Y.
seeking damages for lost profits as a result of Y.’s breach of contract. A.
subsequently assigned its right to claim damages to X., whereupon X.
replaced A. as the claimant in the arbitration. The Arbitral Tribunal
made an award for Y., finding that A. had not proved that the boron
nitride complied with the contractual specifications and Y. was therefore
entitled to terminate the contract.
X. brought setting aside proceedings against the award on the ground
that the arbitral tribunal violated its right to present its case by failing to
examine certain pertinent arguments made in the arbitration.
The Federal Supreme Court held that the parties’ right to present their
case is not breached where an arbitral award contains reasons showing
that the arbitrators examined and dealt with the points raised by a party
which are essential in order for a decision to be made on the merits. The
court found in particular that the arbitrators in their award had
determined the contract terms containing the agreed product
specifications, applied provisions of the U.N. Convention on Contracts
for the International Sale of Goods in order to give meaning to undefined
contract terms, and reviewed the parties’ correspondence to determine
whether the petitioner had proved that its product met the contract
specifications. The arbitrators had rejected the petitioner’s arguments at
least implicitly.
Accordingly, the application to set aside was dismissed.