A. SA (State Entity) v. B. SA (France)
Swiss Federal Supreme Court
4A_124/20141 (201) (2014)
In 1999 the International Federation of Consulting Engineers (FIDIC) developed the General Conditions, which established a multi-tier system of dispute resolution for disputes arising from construction contracts. FIDIC intended for this system to more efficiently resolve disputes that arose during performance of a construction contract while still preserving the contractual relationship between the parties. In the first tier of the FIDIC procedure, a dispute related to the contract had to be filed with a dispute-adjudication board (the board). The board was designed by FIDIC to be a permanent panel appointed at the beginning of the contract that would oversee all disputes arising over the course of the contract’s performance, although ad hoc boards could be established as well. The second tier of the FIDIC procedure was arbitration, governed by the rules of the International Chamber of Commerce. A. SA (plaintiff) and B. SA (defendant) entered into construction contracts based on model contracts adopting the FIDIC dispute-resolution procedure. In March 2011, B. SA requested that the board be constituted to handle a dispute involving the contracts, two of which were completed in 2010. B. SA attempted several times to advance the board proceedings but was unsuccessful. Fifteen months after filing the request to constitute the board, B. SA filed a request to initiate arbitration proceedings. A. SA objected, arguing that the arbitral tribunal did not have jurisdiction because the procedure of first filing the dispute with the board had not been followed. The arbitral tribunal held that it did have jurisdiction and that the pre-arbitration board proceedings were not mandatory. The arbitral tribunal issued an interlocutory award in favor of B. SA, and A. SA appealed.
Rule of Law
Holding and Reasoning ()
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