Nater Dallafior successfully challenges award on jurisdiction before the Swiss Federal Supreme Court

On 15 February 2017, an ad hoc arbitral tribunal seated in Zurich issued an interim award in which it found jurisdiction.

Nater Dallafior represented the respondent party and requested the setting aside of the award issued by the three-member arbitral tribunal in this international commercial arbitration concerning, inter alia, a retrocession agreement in the re-insurance business. The setting aside application was based on Art. 190(2)(b) in conjunction with Art. 190(3) of the Swiss Private International Law Act.

In essence, Nater Dallafior argued that no valid arbitration had been concluded. Consequently, the case should be decided by the competent state court, and not by an arbitral tribunal. The Supreme Court shared this view and held that – contrary to the arbitrators' finding – there was, indeed, no basis for assuming that there had been a clear intention of the parties to exclude the state courts, which is an indispensable requirement for an arbitration agreement. Therefore, the Court found that no valid arbitration agreement had been concluded and the arbitrators had wrongly found jurisdiction. As a result, the award was set aside, and the losing party (claimant in the arbitration) was condemned to pay both the court fees and a compensation for attorney fees to the prevailing party, which was represented by Nater Dallafior.

Given that only about 7% of all challenges brought against international awards are successful, and the Supreme Court is known for its very strict case law and hands-off approach, Nater Dallafior is proud to have succeeded in overcoming this hurdle.

The Nater Dallafior team included Roberto Dallafior (Supreme Court decision of 4 October 2017 in case 4A_150/2017).