X. v. Y. and ICC Arbitral Tribunal c/o Paolo Michele Patocchi, Esq. [The Beirut University Assignment] - Swiss International Arbitration Law Reports (SIALR) - 2007 Vol. 1 Nos. 1 & 2

Page Count: 

16 pages

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1 PDF Download

Published: 

December, 2007

Practice Areas: 

ICC

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Originally from:
Swiss International Arbitration Law Reports - 2007 Vol. 1 Nos. 1 & 2

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Headnote

 

When a claimant in an arbitration seeks payment in his capacity as an

assignee and the arbitrator’s jurisdiction is in dispute, the existence and

validity of the assignment under which the claimant is suing is a

requirement for arbitral jurisdiction and must be proved by the claimant in

the stage of the arbitration relating to jurisdiction. The petitioner must set

out in its application to set aside the reasons for which an arbitrator

wrongly denied jurisdiction; general criticism of an award is inadmissible.

 

Summary of the Decision

 

Y., as leader of a consortium, executed a sub-contract on behalf of the

consortium with Z. Z. then entered into a loan agreement with X. Prior

to the execution of the loan agreement, Y. signed a declaration stating

that any amounts owed by the joint venture to Z. would be paid to a bank

account held in the name of X. X. brought arbitration proceedings against

Y., relying on the sub-contract, the declaration, and the loan contract,

seeking payment of approximately USD 10,000,000.00. The arbitrators

decided that they lacked jurisdiction to hear the matter on the ground that

X. was relying on an assignment, the existence of which had not been

proved. X. then brought setting aside proceedings claiming that the

arbitrators (1) wrongly denied jurisdiction in violation of article

190(2)(b) FPILA; (2) adjudicated ultra petita within the meaning of

article 190(2)(c) FPILA when it decided on the validity of the

assignment of claims for payment; and (3) denied the petitioner its right

to present its case under article 190(2)(d) FPILA.

 

The Federal Supreme Court held: (1) the court will only examine the

jurisdictional complaints against an award that have been properly raised

and substantiated by the petitioner, and general criticism against the award

is inadmissible; (2) when a claimant in an arbitration seeks payment in his

capacity as an assignee and the arbitrator’s jurisdiction is in dispute, the

existence and validity of the assignment under which the claimant is suing

is a requirement for arbitral jurisdiction and must be proved by the

claimant in the stage of the arbitration relating to jurisdiction; and (3) the

arbitrators’ decision as to the existence of the assignment in dispute was

not ultra petita, as understood by article 190(2)(c), since such existence

was a requirement for the arbitrators’ jurisdiction.

 

Accordingly, the application to set aside was dismissed.