Judgment of 30 December 1994

W (defendant), a Panamanian company controlled by nationals of State K, entered into a contract with F and U (plaintiffs), companies incorporated in State Y. Under the contract, W would assist F and U in obtaining orders from State K for deliveries of M-84 tanks from the State U defense industry. In return, F committed to pay for W’s services under a guarantee from U. The contract between W and the individuals from State Y contained an arbitration clause, pursuant to the Rules of the International Chamber of Commerce (ICC). F and the Minister of Defense of State K subsequently entered into an agreement for the delivery of a number of M-84 tanks for a set price. F terminated the contract with W, claiming it was contrary to the mandatory laws of State K and State Y. F and the Minister of Defense of State K also entered into a new agreement regarding construction of training facilities for M-84 tanks at a set price. Citing these agreements between F and the Minister of Defense, W claimed payment of its fees from F. F refused to pay W. W referred the dispute about payment to arbitration, seeking fees due under the fee agreement. In the briefs, however, W sought payment only from F and compensatory damages from U. The arbitral tribunal entered an award in favor of W. F and U filed suit in the Swiss courts, challenging the arbitral award under Article 190 of the Swiss Law on Private International Law (SLPIL). U specifically sought an annulment of the arbitral award, arguing the tribunal exceeded its authority by accepting a modification of W’s claim in breach of the ICC Rules. F and U jointly argued that the fee agreement failed to comply with the mandatory provisions of the laws of State K and required F to pay W bribes in contravention of Swiss law.