X. v. Y. [The Consignment of Russian Styrene Monomer] No. 4A_294/2008 - Swiss International Arbitration Law Reports (SIALR) - 2008 Volume 2 No. 2

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22 pages

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December, 2008

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Headnote

■ The parties’ right to present their case is breached where an

arbitrator owing to an inadvertent mistake or oversight has failed to

consider an important point on which a party has relied.

■ The principle of equal treatment requires an arbitrator to treat

the parties in the same manner at every step of the proceedings.

Summary of the Decision

X. and Y. entered into a contract whereby X. agreed to sell Y. 1,000

tons of styrene monomer. Upon Y.’s failure to comply with the loading

period stipulated in the contract, X. terminated the contract and sold the

goods to a third party. Y. filed a request for arbitration before the CCIG

seeking damages; X. sought the dismissal of the request and

counterclaimed for payment.

A sole arbitrator found that X. was not entitled to terminate the

contract and ordered X. to compensate Y. for direct losses. X. filed an

application to have the award set aside by the Swiss Federal Supreme

Court contending that the arbitrator breached (i) its right to present its

case and (ii) its right to equal treatment.

(i) On the Parties Right to Present their Case. The petitioner

complained that the arbitrator had (a) failed to give the petitioner an

opportunity to file comments on a procedural point, (b) failed to provide

reasons for a procedural decision, (c) breached one of his own procedural

orders and (d) failed to deal with an important point due to a manifest

error.

(a) On the Arbitrator’s Failure to Grant an Opportunity to File

Comments. The petitioner argued that the arbitrator ruled on the

admissibility of a request made by the respondent prior to the expiry of

the time limit for the petitioner to file comments on such request. The

Court first observed that an interim fax sent by the petitioner could

reasonably have led the arbitrator to understand that the petitioner did not

intend to submit further comments. The Court nevertheless held this

complaint to be unfounded because the petitioner had taken advantage of

a further opportunity to comment on the respondent’s request.