1. X. SA and 2. Y. SA v. 1. V. Limited (formerly A. Ltd) and 2. W. GmbH (successor to B. GmbH) [The Rehabilitation of a Power Plant in Romania] No. 4A_348/2009 - Swiss International Arbitration Law Reports (SIALR) - 2010 Vol. 4 Nos. 1 & 2

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November, 2013

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Court Decisions

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Originally from: 

Swiss International Arbitration Law Reports 2010 Vol. 4 Nos. 1 and 2

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No. 3

1. X. SA and 2. Y. SA v. 1. V. Limited (formerly A. Ltd) and

2. W. GmbH (successor to B. GmbH)

[The Rehabilitation of a Power Plant in Romania]

No. 4A_348/2009

Headnote

■ A breach of procedure or a wrong decision on the merits is

insufficient to give rise to an appearance of bias on the part of an

arbitrator, save for a breach of procedure which is particularly

serious or repeated and which would amount to a manifest breach of

the duties of an arbitrator (confirmation of previous decisions).

■ Objections relating to the parties’ right to present their case must

be raised immediately, failing which the right to raise such an

objection will be lost (confirmation of previous decisions).

■ Objections relating to a breach of procedure are similarly to be

raised immediately; raising such an objection in setting aside

proceedings for the first time is contrary to the principle of good

faith (confirmation of previous decisions).

Summary of the Decision

Two Romanian state companies, X. SA and Y. SA, formed a

consortium relating to the rehabilitation and modernisation of a power

plant in Romania with V. Limited, a Finnish company, B. GmbH, a

German company, and a third party. Considering that the two Romanian

companies had not effected payment in a timely fashion, V. Limited and

B. GmbH suspended the performance of the contract. After presenting

their claims before an adjudicator, V. Limited and B. GmbH filed a

request for arbitration with the ICC. On 2 June 2009 a three-member

arbitral tribunal made an award for V. Limited and B. GmbH.

Against this award, X. SA and Y. SA brought setting aside proceedings

before the Federal Supreme Court arguing that the arbitral tribunal had

not been properly constituted and had breached their right to equal

treatment and right to put their case before the arbitrators.

The application was denied.

In relation to the petitioners’ complaint that the arbitral tribunal was

not properly constituted, the Court recalled that breaches of procedure or

a decision which is wrong on the merits are not sufficient to give rise to

an appearance of bias on the part of an arbitrator, save for breaches of