## Facts

- I SA, a Swiss company, and V, the chief executive officer of another company, entered into a contract for the technical management of ships.
- The contract also provided for the creation of a joint venture company in Singapore, G. Pte Ltd.
- The contract contained an arbitration clause calling for arbitration seated in Switzerland.
- Disputes arose under the contract, and V initiated arbitration.
- A three-member arbitral tribunal was constituted in Switzerland: I SA appointed one arbitrator, V appointed another, and a third arbitrator was appointed as president.
- In December 1995, the tribunal issued a partial award upholding its jurisdiction over claims made by I SA.
- In September 1996, I SA asked the arbitrator it had appointed to resign, alleging a conflict of interest.
- I SA asserted that the arbitrator was a partner in a law firm in which another partner was litigating against I SA in separate proceedings and was said to have acted aggressively; I SA’s chief executive stated he was “scandalized” by that conduct.
- I SA sought annulment of the partial award under Article 190 of the Swiss Law on Private International Law (PILA), arguing that the tribunal was improperly constituted because the arbitrator lacked independence.
- The court of first instance rejected the annulment request, holding that I SA’s stated “uneasiness” about the law-firm connection was insufficient to establish a lack of independence.
- I SA appealed to the Swiss Federal Tribunal, again seeking annulment of the partial award under Article 190 PILA.

## Issues

1. Does an arbitrator’s independence, for purposes of Article 190 PILA, become doubtful merely because another partner in the arbitrator’s law firm litigates against a party in unrelated proceedings and the party objects to that partner’s litigation conduct?
2. May a party be denied relief where it raises a challenge to an arbitrator only after a partial award on jurisdiction and long after the arbitration has begun?

## Decision

- The Swiss Federal Tribunal rejected I SA’s appeal and left the partial award on jurisdiction in place.
- The court agreed that I SA’s subjective “uneasiness,” based on the conduct of a different partner in separate litigation, did not establish circumstances that objectively justified doubts about the arbitrator’s independence.
- The court treated the timing of the challenge—raised well after the tribunal was constituted and after the partial jurisdiction award—as weighing against the objection.

## Legal Principles

- Under Article 190 PILA, annulment for lack of independence requires objectively verifiable circumstances that justify doubts about an arbitrator’s impartiality or independence; subjective discomfort is not enough.
- A law-firm partnership, without additional facts tying the arbitrator to the separate dispute or showing a concrete risk of partiality, does not by itself establish a disqualifying conflict.
- Set-aside review under Article 190 PILA is limited to the enumerated grounds and does not permit annulment based on generalized dissatisfaction with conduct in other proceedings.
- A party must raise known or reasonably discoverable objections to an arbitrator without delay; waiting until after an adverse award may be treated as inconsistent with a timely challenge.

## Conclusion

In its Judgment of 9 February 1998 (16 ASA Bull. 634 (1998)), the Swiss Federal Tribunal refused to annul a partial award on jurisdiction under Article 190 PILA where the challenging party relied on “uneasiness” arising from an arbitrator’s law-firm partner litigating against it in unrelated proceedings, holding that such concerns did not objectively establish a lack of independence and noting the late timing of the challenge.


Judgment of 9 February 1998, 16 ASA Bull. 634 (1998)