Thursday, 12 June 2014

Enforcement of an ICC award and a Swiss Supreme Court judgment

A decision of the Thessaloniki 1st Instance Court declared enforceable an ICC award rendered by a Panel in Geneva and a Swiss Supreme Court judgment ordering costs.  The arbitral award was challenged before the Swiss Supreme Court, which dismissed the appeal. The court applied the New York and the Lugano Convention respectively.


THE FACTS: The applicant is a major multinational company with its seat in Wales, UK. It obtained an arbitral award by the ICC, issued by a Panel in Geneva, against a Greek company. The agreement to submit their disputes to arbitration emanates from the distribution agreement signed by the parties. Both parties entered an appearance to the arbitration proceedings. The award was rendered in late February 2013, and became final and conclusive pursuant to the ICC Arbitration Rules. In April 2013 recourse was filed by the Greek company before the Swiss Supreme Court, requesting the annulment of the award. Again, both parties appeared. The Supreme Court dismissed the recourse and ordered the Greek company to pay the amount of 16.000 Swiss Franc. The judgment is available (in French) in the web site of the Swiss Supreme Court [, Arrêt du 30 septembre 2013, 4A_232/2013]. The judgment was notified to the parties and became final. 

THE DECISION: The Thessaloniki court presented in detail the applicable law, separating the arbitral award from the costs order. It applied the 1958 NYC for the former, and the 2007 Lugano Convention for the latter. It properly proved the requirements set under Art. 5 NYC , 34 Lugano Convention, and 323 Greek Code of Civil Procedure. The sole ground for refusal raised by the Greek party was that the claim in question was not included in the arbitration agreement. In particular, the company distinguished the distribution agreement from a number of separate sales contracts between the parties. Whereas the former was part of the arbitration agreement, the latter was not, so the Greek company. The court noted that the Greek company took part in the Geneva arbitration proceedings, and later on before the Swiss Supreme Court, without raising the point aforementioned. In addition, it filed a claim for damages against the UK company in the course of the arbitration proceedings. Finally, judging by the wording of the arbitration clause the court dismissed the point of the Greek company, by making reference to the text of the agreement, which explicitly submits all disputes emanating from or connected with the distribution agreement to arbitration. 

COMMENTS:  The decision of the Thessaloniki court is in line with earlier rulings. Half a decade ago the Full Bench of the Supreme Court gave green light to execution regarding a similar case, i.e. again an ICC award from a Panel in Switzerland, combined with a costs order by the Swiss Supreme court [Case Nr. 11/2009, Enterprises & Companies Law Review 2010, p. 1213 et seq.]. The only thorn in the ruling is the confusion caused to the court regarding the origin of the award: Influenced by the seat of the applicant, it mistakenly considered it as a UK arbitral award. In substance however nothing changes, since the NYC applies both to the UK and Switzerland.