V. AG v. 1. A. 2. B. 3. C. 4. D. 5. W. & Co. 6. E. 7. F. 8. G. 9. H. 10. J. 11. K. 12. L. 13. X. 14. M. 15. N. 16. Y. AG 17. Z. Inc. [Costs in Setting Aside Proceedings, No. 2] - Swiss International Arbitration Law Reports (SIALR) - 2007 Vol. 1 Nos. 1 & 2

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December, 2007

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Headnote

Where the petitioner files an application to have an award set aside

and later submits that the application to set aside has become moot as a

result of an intervening decision by the arbitral tribunal, the Federal

Supreme Court may order the petitioner to pay the respondent’s legal

costs based on the principle that costs follow the event.

Summary of the Decision

The petitioner brought setting aside proceedings against an award and

then sought to have the setting aside proceedings stayed pending a

decision by the arbitral tribunal on the petitioner’s request for correction

and interpretation of the arbitral award. The Federal Supreme Court

stayed the proceedings. Thereafter, the petitioner submitted that the

setting aside proceedings had become moot and that therefore the

proceedings should be removed from the docket. The respondent

objected to the petitioner’s argument and instead asked the court to

construe the petitioner’s request as one for withdrawal, the consequence

of which would entitle the respondent to an indemnity for legal costs.

The Federal Supreme Court ordered the petitioner to pay the

respondent’s legal costs and disbursements based on the principle that

costs follow the event.

Statutory and Other Provisions Referred to in the Decision1

Federal Supreme Court Act arts. 66(3), 68(4) (FSCA/BGG/LTF)

Swiss Federal Rules on the Allocation of Indemnities for Legal Costs art.

8(3)