X. v. AY. Holding B.V. [The Czech Share Purchase Agreement I] No. 4A_256/2009 - 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. 16

X. v. AY. Holding B.V.

[The Czech Share Purchase Agreement I]

No. 4A_256/2009

Headnote

■ A clause providing that disputes shall be decided “to the exclusion

of the jurisdiction of the ordinary courts” and shall be “finally

settled according to the rules of the International Chamber of

Commerce” does not amount to a valid exclusion agreement.

■ The fact that an arbitrator was not confirmed by the ICC in a

previous arbitration in which the arbitrator was nominated by the

same party does not per se give rise to any inference as to the

arbitrator’s independence.

Summary of the Decision

X. entered into an agreement with Y. (“the Agreement”). By a share

purchase agreement with AY. Holding BV, a holding company

controlled by Y., X. undertook to assign 45% of its shareholding in A.

Holding to AY. Holding BV. X. was to obtain a 50% shareholding in

AY. Holding BV by subscribing for new shares issued on the occasion

of a capital increase by AY. Holding BV and by then setting off the

amount to be paid for such shares with his claim for payment under the

share purchase agreement. In case of non-performance of certain

contractual duties the Agreement made provision for a contractual

penalty. The capital increase and the assignment of A. Holding’s shares

did not take place.

AY. Holding BV brought an ICC arbitration against X. relying on the

share purchase agreement and requesting that X. be ordered to assign to

AY. Holding BV the shares he held in A. Holding (“the first

arbitration”). For his part, X. brought an arbitration against Y. relying

on the Agreement and claiming the payment of a contractual penalty

(“the second arbitration”). Y. also claimed the payment of a contractual

penalty by way of counterclaim in the second arbitration. Both

proceedings were conducted by the same arbitrators, but were not

consolidated. By an award dated 15 May 2009 the arbitral tribunal in

the first arbitration granted AY. Holding BV’s claim and ordered X. to

assign the shares in consideration of a purchase price of CZK

1,182,500,000.00 (approximately CHF 67 million). The arbitral