Swiss Federal Tribunal Renders Ruling on the Meaning of Public Policy in International Commercial Arbitration - WAMR 2006 Vol. 17, No. 7

Author(s): 

Charles H. Poncet

Page Count: 

4 pages

Media Description: 

PDF from World Arbitration and Mediation Report (WAMR) 2006 Vol. 17, No. 7

Published: 

July, 2012

Jurisdictions: 

Switzerland,

International

Practice Areas: 

Commercial Disputes,

International and Transnational Law,

Arbitral Decisions

Author Detail: 

 

Dr. Charles Poncet, The author is a partner at ZPG Geneva and is a member of the Advisory Board, World Arbitration and Mediation Report.

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Description: 

 

Originally from: World Arbitration and Mediation Report (WAMR)

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News Abroad

Swiss Federal Tribunal Renders Ruling on the Meaning of Public

Policy in International Commercial Arbitration

By Dr. Charles Poncet∗

Introduction

The judgment issued by the Supreme Court of Switzerland

(“Federal Tribunal”) on March 8, 2006 in the case of Tensacciai S.P.A v.

Freyssinet Terra Armata S.R.L will be the object of praise and criticism

for a long time. The original decision is in French. While not yet

published, it can be downloaded from the website of the Federal Tribunal.

In view of Switzerland’s traditional importance as a venue for

international arbitrations, it is believed that an English translation can be

of interest to both practitioners and scholars in this field, as the issue

addressed by the court was nothing less than the search for the perpetually

elusive answer to a complex question: what exactly should practitioners of

international arbitration in Switzerland understand when they hear the

buzz words “public policy”? Is it Swiss public policy, international public

policy, and, if so, as defined by Swiss legal theories and concepts, or by

some broader measurement? Is it to be derived from some as yet

undefined lex mercatoria concept of public policy or from some other

source?

The case originated from a contract entered in 1998 between two

Italian companies, Freyssinet Terra Armata S.R. L (“Freyssinet”) and

Tensacciai S.P.A (“Tensacciai”). Governed by Italian law, the contract

bound Freyssinet and Tensacciai to submit joint bids for the use of

specific technologies in the construction of two bridges on the new Milan-

Naples high-speed railway line. More importantly, Freyssinet and

Tensacciai undertook to refrain from any separate agreements with other

companies and from bidding individually in answer to the tenders. The

contract contained an arbitration clause providing for ICC arbitration with

venue in Lausanne (Switzerland). A dispute arose when one of the

companies was awarded only part of the work but not the other. A panel

of two Italian party-appointed arbitrators and a Swiss chairman issued an

award in French on September 12, 2005, ordering the payment of damages

for breach of the obligation not to engage in separate bids or agreements

with other companies.

Tensacciai appealed to the Federal Tribunal, seeking the

annulment of the award as inconsistent with and contrary to public policy

because European and Italian competition laws had been disregarded to

the extent that they would render null and void the agreement to refrain

from competing in a similar process. In the appellate proceedings, both

parties were represented by highly qualified practitioners of international

arbitration. No hearing was held by the Federal Tribunal because in