Three Essays on International Commercial Arbitration

305 Pages·2005·1.73 MB·English

Three Essays on
International
Commercial Arbitration
Antonio Monti
Arbitration and Corporate Law
Francesco Trezzini
The Challenge of Arbitral Awards for
Breach of Public Policy according to
Art. 190 para. 2 lit. e) of the Swiss
Private International Law
Francesco Wicki
Lugano-Übereinkommen
und Schiedsgerichtsbarkeit
Ausgewählte Fragen
INTRODUCTION
It is not unusual to find essays on international commercial
arbitration, especially by Swiss writers and from a Swiss per-
spective. Somewhat more unusual (and this is the reason why it
was done) is the publication of such writings in Lugano, by
three authors who are active - either as lawyers or as a commer-
cial judge - in the juridical reality of Lugano.
In Switzerland there are, traditionally, two outstanding places
for commercial arbitration: Zurich and Geneva. It is not
surprising that these cities are respectively the first and second
cities in Switzerland for finance and commerce and have de-
veloped over the years as being efficient and friendly places for
arbitration, both in terms of the competence of the arbitrators,
the high standards of the juges d'appui and the arbitration
institutions (respectively the Zurich and Geneva Chambers of
commerce).
Lugano, however, does not have this same tradition, although
it is undeniable that this city plays an important role in com-
merce and finance in Switzerland: being the third financial
centre in Switzerland after Zurich and Geneva. Furthermore, its
unique proximity to Northern Italy, which is one of the most
economically productive regions in all of Europe, gives Lugano
a distinctively international commercial character.
Recently, some efforts have been made to also apply this
potential to commercial arbitration. Firstly, the Lugano Chamber
of Commerce issued in March 1997 a set of rules, the "Lugano
Arbitration and Conciliation Rules", designed for regulating an
institutional arbitration under the auspices of that Chamber.
One of the characteristics of those rules is their very liberal
nature, very much less rigid than the Statute of Civil procedure
of Canton Ticino (which is applicable to the State Courts). Thus
the “Lugano Rules” are therefore completely free from legal
regionalism. This is, indeed, in line with a general trend con-
cerning commercial arbitration, - and not only in Switzerland -
to reduce the intrusion and influence of the State in arbitration,
and to grant the latter as much independence, flexibility and
freedom as possible.
The Swiss legislator took great care to protect this ideal by
issuing the new rules governing international arbitration (entered
into force on January 1st, 1989), that is Chapter XII of the Swiss
Private International Law (PIL). These laws grant substantial
freedom in arbitration jurisdiction by reducing, as far as pos-
sible, any interference by the State in awards, procedure and the
will of the parties. Accordingly, in this law there are very
reduced numbers of provisions of a mandatory nature (which, in
practice, are only aimed at guaranteeing an adequate standard of
due process), the rest being up to the parties: the choice of
applicable law on the merits and on procedure, the language of
the proceedings, the seat of the arbitration tribunal, the waiving
of the right to file an appeal, etc.
This same approach is embodied in the law with respect to
grounds for challenging arbitration awards before a State Court
(that is the Supreme Court), which are usually of very moderate
emphasis and more of an exceptional nature. Furthermore, the
Supreme Court, through consistent case-law, interprets the
grounds for attack laid down in the law very narrowly, and for
example has never granted an appeal for grounds of breach of
public policy.
On the other hand arbitrators have also been empowered to issue
provisional measures, without any recourse to State Courts
which intervene - in synthesis - only upon request to assist the
arbitration tribunal in the taking of evidence.
Finally, Switzerland is member State of the New York conven-
tion, which undeniably means the free circulation in the world of
arbitration awards rendered in our country.
Nowadays, however, the mere existence of a contractual
undertaking to arbitration is no longer sufficient to preclude
the concurrent exercise of jurisdiction by public authorities.
It may happen that a particular dispute involving the same
parties could appear simultaneously before a national court
and an arbitration tribunal. This may result a conflict of
judgements. The effect of this reciprocal interference may
be, on the one hand, concurrent or parallel proceedings and,
on the other, conflicting decisions that arise when both the
arbitrator and the court judge decide the dispute in contra-
dictory ways. Among the decisions of a national court that
may affect international commercial arbitration are decisions
taken by a State court concerning the validity of an arbitra-
tion agreement; decisions on provisional measures or in
support of arbitration; and decisions concerning the setting
aside or the enforcement of an award in a particular county.
Neither international conventions on arbitration, nor those
on civil and commercial matters, offer a clear solutions to
these questions, so that conflicts often have to be solved by
national laws, which may be in favour of or against arbitra-
tion. In such a context it necessary that parties and their
representatives evaluate their choice of procedure carefully,
so as to avoid chaotic or negative results.
Somewhat similar problems arise in the context of arbitration
in corporate law, although from another point of view. In fact,
this kind of arbitration has now become a very topical issue.
Companies, directors and shareholders of company are becom-
ing more and more interested in the swift and confidential settle-
ment of disputes that arbitration can offer in this field.
Such people cannot allow either themselves or their companies
the usually quite lengthy periods of waiting than can attend state
court rulings. Companies and their shareholders need to settle all
disputes as rapidly as possible, so as to avoid these having an
unpredictable impact on the future of the company and its
profitability.
Thus, within the corporate sector, one can now quite fre-
quently encounter cases in which corporate disputes, relating to
competing interests either of companies and their shareholders,
or of company structures and shareholders, are settled by arbi-
tration tribunals rather than through the state courts.
Thus, on the one hand, there is a clear need to settle disputes
through arbitration tribunals rather than through state courts. On
the other hand, however, the many individual differences be-
tween the various national approaches to legislation concerning
arbitration and certain particular features of such legislation
may, in fact, be having exactly the opposite result: in effect,
actually limiting the use of arbitration in corporate law. This is
because the development of the individual national arbitration
acts has not, historically, been uniform.
The causes for this should be sought principally in the origins
and in the development of arbitration within the national
legislation of each individual state, with particular reference to
the ordinances and parameters imposed by specific legislation in
force at different particular times and places.
However, even though many differences remain between the
various national internal regulations regarding arbitration in
corporate matters, in the adoption of recent reforms in the field
of international arbitration, much account has been taken of the
evolution and the ever-growing importance of this subject.
A revision of these norms, which can still be able to needlessly
obstruct arbitration in corporate matters, would thus be auspi-
cious – even through case-law – or, at least, the adoption of
more uniform standards within the European Union.
The three essays gathered in this book by the authors
were presented in 2002 as final papers in postgraduate
courses at the University of Zurich in International Business
Law.
Lugano, October 2002, The authors
Arbitration and Corporate Law
Antonio Monti
*

* Attorney-at-law, Master of International Business
Law (LL.M.), notary public in Lugano (Switzerland)
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Table of Contents
List of authors VI
Abbreviations IX
I. Introduction and Scope of the Paper 1
1. Arbitration and Corporate Law 1
2. Arbitration and Corporation under Swiss Law 2
a) Intercantonal Arbitration Convention “Concordat” 2
b) Swiss Federal Statute on Private International Law (PILS) 5
3. Comparative examination of some foreign laws 9
a) German Law 9
b) French Law 11
c) Italian Law 16
d) From a European perspective (EuGH) 19
4. Conclusions 23
II. The Arbitration Agreement 24
1. Switzerland 24
a) Introduction 24
b) Arbitration Agreement 24
c) Arbitration Clause 25
d) Expert evaluation 25
e) Alternative Dispute Resolution [ADR] 26
f) Validity of an Arbitration Agreement 27
g) Severability of the Arbitration Agreement 27
h) The requirements of independence and the impartiality
of the Arbitration Court 27
2. From a comparative perspective 29
III. The Nature of the Arbitration Clause 30
1. Pertaining to procedure 30
2. Contractual 31
3. Institutional, normative or sui generis 32
4. Conclusions 32
IV. Arbitrability in general 32
1. Objective Arbitrability 33
a) Introduction 33
b) Common features and distinctions in different law systems 34
c) Limits of objective Arbitrability 34
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2. Subjective Arbitrability 34
a) In Switzerland 34
b) From a comparative law perspective 34
3. Disputes involving a pecuniary interest and those not
involving a pecuniary interest 35
a) In Switzerland 35
b) From a comparative law perspective 35
V. Arbitration in Corporate Law in general 35
1. Advantages 35
2. Disadvantages 35
3. Corporate (and Personal) and Arbitration Statutes 36
VI. The parties involved in a Corporation Agreement 38
1. Introduction 38
2. Corporations 38
a) Switzerland 38
aa) The Inclusion of Arbitration Agreements in
Corporation documents 38
bb) Form of Arbitration Agreements 39
cc) The significance of Arbitration clause 39
b. From the perspective of comparative law 39
3. Partnerships 39
a) Switzerland 39
b) From the perspective of comparative law 39
4. Individuals 40
a) Switzerland 40
b) From the perspective of comparative law 40
5. Conclusion 40
VII. The moment of adoption of an arbitration agreement 40
1. At the time of the setting-up of the company 40
a) Switzerland 40
b) From the perspective of comparative law 41
2. Introduction of an arbitration clause after the
setting-up of a company 41
a) For Corporations 41
aa) Switzerland 41
bb) From the perspective of comparative law 42
b) For Partnerships 43
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3. Arbitration regarding new Member 44
a) For Corporations 44
aa) Switzerland 44
bb) From the perspective of comparative law 46
b) Partnerships 47
aa) Switzerland 47
bb) From the perspective of comparative law 47
4. Particular cases 47
a) Merger, split, re-organisation and the
change of category of a company 47
b) Assignment, Assumption of Debts and Purchase of Assets 48
VIII. Claims between Members and claims involving
the Body of the Corporation 49
1. Introduction 49
2. Claims between Members and the Company 49
a) Distinction between categories of claims 49
b) Disputes involving a pecuniary interest and not-involving
pecuniary interests 50
3. Arbitration Agreements concerning the organs and
officers of a company 53
IX. General Conclusions 54
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