Facts
- In March 1988, Mazzer (an Italian businessman) placed an order with Nokia‑Maillefer SA (a Swiss company headquartered in the Canton of Vaud).
- Nokia sent Mazzer an order confirmation that included Nokia’s general conditions of sale and a forum-selection clause designating the Swiss courts.
- An Italian financing company, Leasindustria, then sent a purchase order in response to Nokia’s confirmation; that purchase order included Leasindustria’s general conditions of purchase and a forum-selection clause designating the courts in Milan.
- In May 1988, Nokia returned the purchase order with an amended dispute-resolution clause designating arbitration under the International Chamber of Commerce (ICC) in Paris.
- Mazzer accepted Nokia’s modification to the forum-selection clause (the ICC Paris arbitration clause).
- A dispute later arose from the transaction.
- Mazzer sued Nokia in the courts of the Canton of Vaud, where Nokia had its headquarters.
- Nokia filed a motion asking the Vaud court to refer the dispute to ICC arbitration, relying on the accepted ICC Paris arbitration clause.
- The case was decided by the Tribunal cantonal du canton de Vaud (Cantonal Tribunal of Vaud), Switzerland, on 30 March 1993, and later reported at XXI Y.B. Comm. Arb. 681 (1996).
Issues
- Did the parties’ exchange of forms and Mazzer’s acceptance of Nokia’s May 1988 modification result in a valid and binding agreement to arbitrate disputes by ICC arbitration in Paris?
- If a valid arbitration agreement existed, did it supersede earlier, competing forum-selection clauses naming the Swiss courts and the courts of Milan?
- Was the Vaud cantonal court required to decline jurisdiction over Mazzer’s lawsuit and refer the parties to arbitration?
Decision
- The Tribunal cantonal held that the parties had concluded a valid arbitration agreement providing for ICC arbitration in Paris.
- The court treated Mazzer’s acceptance of Nokia’s amended clause as establishing consent to arbitrate, despite earlier exchanged terms pointing to Swiss or Milan courts.
- Because a binding arbitration clause covered the dispute, the court declined to proceed on the merits in the Vaud litigation and referred the parties to arbitration (granting Nokia’s request to enforce the arbitration agreement at the jurisdictional stage).
Legal Principles
- An arbitration agreement may be formed through an exchange of commercial documents where one party proposes an arbitration clause and the other accepts it, including acceptance of a modified dispute-resolution clause returned on a purchase order.
- In a “battle of forms,” a later accepted dispute-resolution clause can prevail over earlier, conflicting forum-selection clauses, where the record shows the parties ultimately agreed on the later clause.
- Courts asked to hear a dispute subject to a valid arbitration agreement must generally decline to exercise jurisdiction and direct the parties to arbitration, rather than decide the merits of the underlying commercial dispute.
- The arbitration clause is treated as a distinct agreement for jurisdictional purposes: once the court is satisfied that the parties consented to arbitrate and that the clause covers the dispute, the court’s role is limited to enforcing that allocation of forum.
Conclusion
In this Swiss cantonal decision, the court resolved a dispute over competing forum terms created by exchanged order documents and held that the parties’ final, accepted clause required ICC arbitration in Paris; as a result, when Mazzer sued in Vaud, the court enforced the arbitration agreement at the outset and declined to hear the case on the merits, referring the parties to arbitration.