Click to view: 

Stockholm Arbitration Report (SAR)

Preview Page SAR 2000 -  1

1. INTRODUCTION

In a previous article this author dealt with a proposed provision of the draft Swedish Arbitration Act, whereby arbitration tribunals are explicitly given competence "to decide on the private law effects of competition law between the parties" (Article 3). Most importantly, this competence refers to declaring an agreement void in extenso or in part as well as to awarding damages for competition law infringements.

In the article a reference was also made to the then pending case between Eco Swiss China Time Ltd. (Eco Swiss) v. Benetton International N.V. (Benetton) before the European Court of Justice (ECJ). The Swedish Arbitration Act (the Act), including the above-mentioned provision, entered into force on 1 April 1999, the ECJ has now delivered its judgment in this case. This judgment is of far-reaching importance for national arbitration and procedural law. 

2. CASE SUMMARY OF ECO SWISS / BENETTON

In 1986 Benetton, established in the Netherlands, entered into a licensing agreement for eight years with Eco Swiss, established in Hong Kong, and another company, Bulova Watch Company Inc. established in the USA. Under this agreement Benetton allowed Eco Swiss to produce watches and wall clocks to be sold by Eco Swiss and Bulova. The licensing agreement contained an arbitration clause referring disputes to an arbitration institute in the Netherlands and providing that the tribunal should apply Dutch law. Three years prior to the end of the contract term Benetton terminated the agreement following which the parties commenced arbitral proceedings. The arbitral tribunal, in a "partial final award" in 1993, found Benetton to have breached the contract and ordered it to compensate Eco Swiss and Bulova for the damage incurred by these parties following the early termination of the agreement.