Arbitration Newsletter Switzerland: Arbitration Agreement transferred to Non-Signatory Successor State: ICC Award confirmed

In its decision of 7 August 2023 (4A_575/2022), which has in the meantime been published as BGE 149 III 431, the Supreme Court dismissed the Republic of South Sudan’s action for annulment of an ICC award in which the sole arbitrator had extended an arbitration agreement signed by the predecessor state Sudan to the Republic of South Sudan as its non-signatory successor state.

The Decision is interesting as it deals with the legal effect of a waiver of the right to appeal pursuant to art. 192 PILA. In leading case BGE 134 III 260 the Supreme Court had concluded that a waiver of the right to appeal excluded parties from invoking a lack of subject-matter jurisdiction (ratione materiae) in actions for annulment. In other words, the waiver of the right to appeal can be invoked against the party who claims that the dispute does not fall within the material scope of the arbitration agreement.

In the present case, the Supreme Court now considered that a waiver of the right to appeal does, however, not prevent the parties from invoking a lack of personal jurisdiction (ratione personae) in an action for annulment against the award: If the examination of the subjective scope of an arbitration clause and thus the jurisdiction of the arbitral tribunal coincides with the examination of whether a waiver of the right to appeal agreed in the arbitration clause can be subjectively invoked against the party concerned, the arbitral tribunal’s award – affirming jurisdiction – can be challenged before the Supreme Court.

Read the full newsletter: 2024-02-26-Arbitration-Newsletter-4A_575_2022.pdf (pdf 306 KB)

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