X. v. Y. [The Czech Share Purchase Agreement II] No. 4A_258/2009 - Swiss International Arbitration Law Reports (SIALR) - 2010 Vol. 4 Nos. 1 & 2

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November, 2013

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Originally from: 

Swiss International Arbitration Law Reports 2010 Vol. 4 Nos. 1 and 2

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No. 17

X. v. Y.

[The Czech Share Purchase Agreement II]

No. 4A_258/2009

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

second arbitration dismissed X.’s claim, granted Y.’s counterclaim and

ordered X. to pay an amount of CZK 1,182,500,000.00 (approximately

CHF 67 million) plus interest.

X. applied to the Federal Supreme Court seeking a decision setting

aside the arbitral award dated 15 May 2009 in the second arbitration.