Publications

Simon Gabriel; in: dRSK, 05.01.2022
Com­men­tary on Swiss Fed­er­al Tri­bunal deci­sion 4A_422/2021 on October 14, 2021

Arti­cle 190a of the Swiss PILA, as in force since 2021, gov­erns the legal rem­e­dy of the so-called «revi­sion». Com­pared with an (ordi­nary) set­ting aside appli­ca­tion accord­ing to Arti­cle 190.2 PILA, the legal rem­e­dy of the revi­sion has dis­tinct require­ments and time lim­its to be observed. In the present case, the Swiss Fed­er­al Tri­bunal reject­ed an appli­ca­tion for revi­sion as man­i­fest­ly inadmissible.

I. Back­ground

[1] In inter­na­tion­al arbi­tra­tion pro­ceed­ings with seat in Gene­va (Switzer­land), a dis­pute in con­nec­tion with a share trans­ac­tion was decid­ed under the aus­pices of the Swiss Arbi­tra­tion Cen­tre (under its for­mer name of Swiss Cham­bers’ Arbi­tra­tion Insti­tu­tion; sec. 1).

[2] The Eng­lish com­pa­ny B had sold shares and par­tic­i­pa­tion cer­tifi­cates of the Swiss com­pa­ny C to the Swiss res­i­dent A (sec. 1).

[3] By final award dat­ed 29 Octo­ber 2020, the arbi­tral tri­bunal ordered that B was to receive an amount of CHF 1’130’917 against (re)transfer of 500 shares and 200 par­tic­i­pa­tion cer­tifi­cates of the Swiss com­pa­ny C (sec. 1).

[4] The final award was not chal­lenged in set­ting aside pro­ceed­ings pur­suant to Arti­cle 190.2 Swiss Pri­vate Inter­na­tion­al Law Act («PILA») with­in the applic­a­ble time lim­it of 30 days as from the for­mal noti­fi­ca­tion of the award (sec. 1).

[5] Only sev­er­al months lat­er, on 3 Sep­tem­ber 2021, A filed an appli­ca­tion for revi­sion accord­ing to Arti­cle 190a PILA with the Swiss Fed­er­al Tri­bunal. At the same time, A filed pro­ce­dur­al requests for ex parte (super-pro­vi­sion­al) mea­sures and sus­pen­sive effect for the appli­ca­tion (sec. 2).

[6] On sub­stance, A argued that the two legal coun­sel of B had been in a con­flict of inter­est since Octo­ber 2019 and were, there­fore, not in a pro­ce­dur­al posi­tion to appear in the arbi­tra­tion pro­ceed­ings on behalf of B after that date (sec. 2).

[7] Specif­i­cal­ly, A alleged that the legal coun­sel of B rep­re­sent­ed par­ties with con­flict­ing inter­ests by rep­re­sent­ing not only B, but also C (and its sub­sidiaries) as well as C’s for­mer board mem­bers E and F (sec. 4).

[8] As evi­dence for these alle­ga­tions, A sub­mit­ted in par­tic­u­lar the fol­low­ing (sec. 4):

[9] First, a let­ter of 15 Octo­ber 2019 that E, who was then a mem­ber of both B’s and C’s board of direc­tors, sent, alleged­ly with the assis­tance of one of the two coun­sel at issue, to the asso­ci­a­tion D in order to com­plain about cer­tain actions of A. [10] Sec­ond, a request for super-pro­vi­sion­al and pro­vi­sion­al mea­sures against A filed by E and F on behalf of C (and its sub­sidiaries) on 8 Octo­ber 2019 which had been draft­ed by the two men­tioned counsel.

II. Deci­sion

[11] The Swiss Fed­er­al Tri­bunal con­firmed first of all that it was in prin­ci­ple com­pe­tent to hear appli­ca­tions for revi­sions under the new Arti­cle 190a of the PILA (sec. 4.3).

[12] It fur­ther con­firmed that a par­ty may seek review of an award after it was ren­dered, if the par­ty dis­cov­ers rel­e­vant facts or con­clu­sive evi­dence that it was unable to rely on in the pre­vi­ous arbi­tra­tion pro­ceed­ing despite hav­ing exer­cised due dili­gence. Facts or evi­dence that only came into exis­tence after the date of the award are exclud­ed (sec. 4.4).

[13] Specif­i­cal­ly, the Swiss Fed­er­al Tri­bunal named the five indi­vid­ual con­di­tions that must be ful­filled under the per­ti­nent ground for revi­sion (sec. 4.4.1):

• Alle­ga­tion of one or more facts.
• The alleged facts must be mate­r­i­al to the out­come of the case. This is the case if they mod­i­fy the fac­tu­al basis of the award in the sense that the cor­rect appli­ca­tion of the law on the (mod­i­fied) facts leads to a dif­fer­ent legal solu­tion and thus to a dif­fer­ent award.
• The rel­e­vant facts already exist­ed at the time when the award was rendered.
• The rel­e­vant facts were only dis­cov­ered at a lat­er point in time («après coup»).
• The appli­cant was not in a posi­tion – in spite of all his dili­gence («mal­gré toute sa dili­gence») – to rely on these facts dur­ing the arbi­tra­tion proceedings.

[14] Fur­ther­more, the Swiss Fed­er­al Tri­bunal also con­firmed that there is a rel­a­tive time lim­it for the revi­sion of 90 days as from the dis­cov­ery of the rel­e­vant fact. Dis­cov­ery in that legal sense means knowl­edge of the new facts, in order to be able to invoke them, even if the appli­cant is not in a posi­tion to prove them with cer­tain­ty. A mere sup­po­si­tion is, how­ev­er, not enough to trig­ger the start of the time lim­it (sec. 4.4.2).

[15] The appli­ca­tion of this test in the present case was appar­ent­ly straight­for­ward. The appli­cant A admit­ted that E already dur­ing the arbi­tral hear­ing on 13 March 2020 tes­ti­fied that one of the legal coun­sel had assist­ed in draft­ing the let­ter of 15 Octo­ber 2019 (sec. 4.5).

[16] A, dur­ing the arbi­tra­tion pro­ceed­ings, appar­ent­ly nev­er raised any issues of con­flict of inter­est of B’s legal coun­sel even though at least some of their rel­e­vant actions must have been evi­dent from E’s tes­ti­mo­ny. In con­sid­er­a­tion of these cir­cum­stances, the Swiss Fed­er­al Tri­bunal reject­ed the appli­ca­tion for revi­sion as man­i­fest­ly inad­mis­si­ble – be it as being belat­ed or be it because the rel­e­vant facts were not dis­cov­ered at a lat­er point in time in the legal sense («après coup»; sec. 4.5).

[17] Final­ly, the Fed­er­al Tri­bunal also not­ed for the sake of com­plete­ness that A, in any event, failed to demon­strate how the alleged dis­qual­i­fi­ca­tion of B’s coun­sel to make sub­mis­sions in the arbi­tra­tion would have mod­i­fied the fac­tu­al basis of the award.

[18] Con­se­quent­ly, A’s appli­ca­tion for revi­sion was reject­ed as inad­mis­si­ble and A’s fur­ther pro­ce­dur­al requests were con­sid­ered as being moot in light of the decision.

III. Com­ments

[19] The legal rem­e­dy of the revi­sion has already exist­ed on the basis of the jurispru­dence of the Swiss Fed­er­al Tri­bunal before the reformed Swiss lex arbi­tri (12^th Chap­ter of the PILA) came into force in 2021. But only since 2021 has the revi­sion been express­ly cod­i­fied as follows:

«¹ A par­ty may request a review of an award if:

a. it has sub­se­quent­ly become aware of sig­nif­i­cant facts or uncov­ered deci­sive evi­dence which it could not have pro­duced in the ear­li­er pro­ceed­ings despite exer­cis­ing due dili­gence; the fore­go­ing does not apply to facts or evi­dence that came into exis­tence after the award was issued;

b. crim­i­nal pro­ceed­ings have estab­lished that the arbi­tral award was influ­enced to the detri­ment of the par­ty con­cerned by a felony or mis­de­meanour, even if no one is con­vict­ed by a crim­i­nal court; if crim­i­nal pro­ceed­ings are not pos­si­ble, proof may be pro­vid­ed in some oth­er manner;

c. a ground for a chal­lenge under Arti­cle 180 para­graph 1 let­ter c only came to light after con­clu­sion of the arbi­tra­tion pro­ceed­ings despite exer­cis­ing due dili­gence and no oth­er legal rem­e­dy is available.

² The request for a review must be filed with­in 90 days of the grounds for review com­ing to light. A review may not be request­ed more than ten years after the award becomes legal­ly bind­ing, except in the case of para­graph 1 let­ter b.»

(Art. 190a PILA)

[20] The present deci­sion of the Swiss Fed­er­al Tri­bunal allows two conclusions:

[21] First, the revi­sion is more than a the­o­ret­i­cal con­cept. It is a legal rem­e­dy with very spe­cif­ic require­ments that is avail­able for hav­ing awards reviewed in addi­tion to the ordi­nary set­ting aside appli­ca­tion of Arti­cle 190.2 PILA.

[22] With an absolute time lim­it of ten years (which does not even apply in cas­es of crim­i­nal behav­iour) and a rel­a­tive time lim­it of 90 days as from the dis­cov­ery of the rel­e­vant ground, it cov­ers a far longer peri­od of time than the set­ting aside appli­ca­tion (30 days as from the noti­fi­ca­tion of the award).

[23] Sec­ond, the require­ments for a suc­cess­ful revi­sion are applied in a strict man­ner by the Swiss Fed­er­al Tri­bunal and are dif­fi­cult to meet in practice.

[24] It remains to be seen whether the num­ber of appli­ca­tions for revi­sion will increase in the years to come with a view to the new and express legal basis in Arti­cle 190a PILA.

[25] For par­ties and coun­sel, the legal rem­e­dy of the revi­sion means that it may be pre­ma­ture to close an arbi­tra­tion file 30 days after an award was ren­dered. Par­tic­u­lar­ly in high-val­ue dis­putes, it can be expect­ed that unsuc­cess­ful par­ties will use every chance for a sec­ond bite at the apple.

[26] For arbi­tra­tors, it could mean that the point in time when they are def­i­nite­ly «func­ti offi­cio» may be (far) lat­er than it is usu­al­ly under­stood. In the author’s view this does not mean that arbi­tra­tors still need to treat the case as pend­ing, but it may be wise to keep the files and any per­son­al notes on the case beyond the 30 days time lim­it for the ordi­nary set­ting aside proceedings.