Swiss Federal Supreme Court sets aside CAS award for violation of the principle of procedural public policy
In a landmark decision of 13 April 2010 (4A_490/2009, published on 2 July 2010), the Swiss Federal Supreme Court confirmed that the principle of res judicata is part of procedural public policy, and it set aside a CAS award for violation of that principle. At first sight, the decision of the Federal Supreme Court seems to weaken the primacy of the arbitral tribunal to decide on its jurisdiction as stipulated under Article 186(1)bis of the Swiss Private International Law Act (“PILA”). A closer look on the decision however reveals that the case before the Federal Supreme Court was not only one concerning the principle of res judicata, but in particular one dealing with the erga omnes effect of [...]
The Relationship Between Enforcing Judgments and Denial of Justice Claims?
My colleague Trey Childress has a nice summary of the recent decision by a federal court in Florida in Osorio v. Dole Food Company to refuse to enforce a $97 million Nicaraguan judgment. Here’s the key excerpt of the decision:
“the evidence before the Court is that the judgment in this case did not arise out of proceedings that comported with the international concept of due process. It arose out of proceedings that the Nicaraguan trial court did not have jurisdiction to conduct. During those proceedings, the court applied a law that unfairly discriminates against a handful of foreign defendants with extraordinary procedures and presumptions found nowhere else in Nicaraguan law. Both t [...]
The “Transnational Approach” of the ILA Recommendations on Res Judicata and Arbitration
I have been reading with interest the ILA’s Final Report and Recommendation on Res Judicata and Arbitration adopted at the 2006 Toronto conference. Recommendation 2 provides that:
The conclusive and preclusive effects of arbitral awards in further arbitral proceedings set forth below need not necessarily be governed by national law and may be governed by transnational rules applicable to international commercial arbitration.
I understand the motivation behind this recommendation, but am confused as to how it would be implemented. Because res judicata is viewed as procedural, its application depends on the lex fori, which means that one panel may adopt a civil law approach in one case and a [...]
“Extension” of the Arbitration Agreement, Joinders, Review of Awards Declining Jurisdiction and Public Policy: News from Paris and Lausanne
The Paris Court of appeal, on 25 September 2008, and the Swiss Federal Tribunal, on 5 December 2008 have rendered two interesting decisions. These two decisions address issues of primary importance, such as the “extension” of the arbitration agreement, joinders, and the scope of review by courts of award having declined the tribunal’s jurisdiction.
These two decisions raise a number of interesting questions.
Firstly, in countries where (as opposed to Switzerland), the law does not provide that the wrongful denial of jurisdiction of arbitral tribunals is a ground for annulment, the question raised is whether awards having declined the tribunal’s jurisdiction over parties bound by the arbitrat [...]
