Originally from:

Swiss International Arbitration Law Reports - 2008 Vol. 2 No. 2

Preview Page

Headnote

■ In order to be valid, an exclusion agreement must clearly and
unambiguously set out the parties’ mutual intention to waive future
setting aside proceedings.
■ An arbitration clause providing that “an arbitral award shall be
final” does not amount to a valid exclusion agreement precluding
setting aside proceedings.
■ Similarly, article 28 of the ICC Rules does not in itself amount to a
valid waiver of the parties’ right to preclude setting aside
proceedings whenever an arbitration agreement contains a general
reference to the ICC Rules.
■ The principle pacta sunt servanda cannot be invoked in setting
aside proceedings against an award whenever the petitioner
complains only of the manner in which the arbitrator has
interpreted and construed the agreement in dispute.

Summary of the Decision

X., a company incorporated in Bosnia-Herzegovina and two Italian
companies, Y.Srl and Z. SpA, concluded a Cooperation Agreement
relating to the construction of a plate-punching factory. Z. SpA was
named as “guarantor” in the agreement. X. commenced an arbitration
against the two Italian companies seeking (i) a declaration that the
respondent was in breach of the Cooperation Agreement and (ii) an order
for payment in the amount DEM 410,000.

Y. Srl sought the dismissal of the action and filed a counterclaim; Z.
SpA submitted that it was not bound by the arbitration clause in the
Cooperation Agreement. In an interlocutory decision, the arbitral
tribunal declared that it had jurisdiction over all the parties, including the
Italian guarantor. In a subsequent partial award, the arbitrators dismissed
all of X.’s claims as well as Y Srl.’s counterclaim. X. then brought setting
aside proceedings before the Swiss Federal Supreme Court on the ground
that the arbitrators’ award breached public policy.

The Swiss Federal Supreme Court first observed that the agreement
containing the arbitration clause was concluded prior to the entry into