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

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No. 1
X. v. H.Y.
[Suit for Professional Malpractice against a Geneva Attorney]
No. 4A_436/2007
Headnote
Where the parties have concluded an arbitration agreement
concerning an arbitrable dispute, a Swiss court must decline
jurisdiction if so requested by the defendant in a timely manner
unless the arbitration agreement has lapsed, is unenforceable, or
incapable of being performed.
Where it is disputed whether the arbitration agreement covers the
cause of action, the court will in principle confine itself to a summary
examination of the question.
Summary of the Decision
H.Y. and his wife, both French citizens domiciled in France, consulted
attorney X. in order to obtain residence permits so that they could
relocate to Geneva in 1997. Their attorney-client agreement contained an
arbitration clause. The couple obtained the required residence permits
and relocated to Geneva in 1997. In 1998, the couple again consulted X.
in order to assess the potential tax consequences arising from a possible
real estate acquisition. X. advised the couple that their tax position
would remain unchanged; however, as a consequence of the real estate
purchase, the couple’s taxable expenditures rose from CHF 200,000.00
to CHF 300,000.00.
H.Y. commenced proceedings before the Geneva Court of First
Instance seeking damages in an amount equal to the increase in taxes
resulting from the real estate purchase. X. claimed that the action was
inadmissible and relied on the arbitration agreement as a defence. The
Court of First Instance assumed jurisdiction and declined to enforce the
arbitration agreement on the basis that the attorney-client agreement was
limited to fee disputes as opposed to allegations of professional
malpractice.
X. appealed this decision before the Geneva Court of Justice. While
the Court of Justice affirmed the decision below, it held that (i) the
attorney-client agreement covered only X.’s duties related to the couple’s
relocation, which had been discharged as of the date on which the couple
established residency in Geneva, and (ii) disputes arising from X.’s
subsequent duties relating to the couple’s tax advice provided in 1998