Turkey Arbitration Decision: Swiss Federal Supreme Court Rules that Criminal Judgment Won't Affect Arbitral Ruling
In a groundbreaking decision, the Swiss Federal Supreme Court has established that a criminal conviction arising from the same factual circumstances as those underlying an arbitral proceeding does not impact the arbitral award itself. This ruling, discussed in the Pekin Bayar Mizrahi article, underscores the independence between criminal judgments and arbitral awards.
The ruling, made in an international arbitration context, concerns an arbitral award that was not set aside. The senior partner involved in the case is Ergin Mizrahi of the law firm Pekin Bayar Mizrahi, which specializes in international arbitration.
Under Swiss law, criminal behavior related to an arbitral award can be a limited ground for revision of the award (Article 190a.2 of the PILA), but such revision requests are narrowly construed and must meet strict conditions to proceed. The Swiss Federal Supreme Court emphasized that a criminal conviction alone does not lead to setting aside or modification of the award if the award itself is valid.
This approach protects the finality of arbitral awards, ensuring that their enforceability is not automatically undermined by separate criminal proceedings arising from related facts. While criminal convictions might provide grounds for limited legal remedies against arbitral awards (like revision), they do not automatically affect the validity or enforceability of those awards, according to the Swiss Federal Supreme Court's decision outlined in the Pekin Bayar Mizrahi article.
The Court exercises a free and accurate application of the law but distinguishes between criminal convictions and the civil/arbitral dispute resolution processes. This maintains arbitration's autonomy from criminal proceedings even where factual overlaps exist.
In conclusion, the Pekin Bayar Mizrahi article highlights a significant development in international arbitration law. It underscores the importance of preserving the finality of arbitral awards, ensuring that their enforceability is not compromised by separate criminal proceedings. This decision is a testament to the independence of the arbitral process and the rule of law.
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