Swiss Federal Supreme Court finds arbitration agreement invalid under Article II(3) of the New York Convention in light of the applicable Russian law (A AG v B Ltd)

Article summary

Arbitration analysis: In a decision dated 12 July 2023 published on 1 September 2023, the Swiss Federal Supreme Court (‘SFSC’) considered whether to refer parties to arbitration pursuant to Article II(3) of the New York Convention (‘NYC’) following the dismissal by the lower state courts of a jurisdictional objection based on an arbitration agreement which provided for institutional arbitration in Russia. Since the Russian arbitral institution referred to in the arbitration agreement had ceasefartd to exist, the central question was whether such agreement could be interpreted as providing for ad hoc arbitration in Moscow, as argued by the defendant. After examining the validity of the arbitration agreement under Russian law, the SFSC upheld the decision of the first instance and superior courts dismissing the arbitration defence. The SFSC first examined the question of the law applicable to the validity of the arbitration clause and...