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Stockholm Arbitration Report (SAR)

Preview Page SAR 2004 - 1

Observations by Laurent Hirsch

SUBJECT MATTERS:
(1) Swiss courts’ powers to review foreign law.
(2) French law on representation of companies.
(3) Security for costs before Swiss courts.

FINDINGS:
(1) The Swiss courts should apply foreign law in accordance with judgements rendered by the highest foreign courts.
(2) A French Sàrl is not bound by a contract signed by a non-officer having apparent authority (mandat apparent).
(3) Swiss courts may order a claimant challenging an arbitral award to put up security for costs where the claimant comes from a country with which Switzerland has not concluded a convention. This is the case with tax haven countries, in the present matter Turks and Caicos.

PARTIES:
Claimant: KK Ltd (Turks and Caicos Islands)
Respondent: FF (Paris, France)

PLACE OF COURT PROCEEDINGS: Switzerland

APPLICABLE LAWS:
Swiss Federal Statute on Private International Law of 1987
French company law, article L 223-18 C.com.

SUMMARY
The dispute arose out of a consultancy agreement and the issue was whether the Arbitral Tribunal had jurisdiction. The consultancy agreement was entered into between KK, an offshore affiliate from a Kuwait company, and FF, a French Sàrl (Société à responsabilité limitée).