Facts
The decision concerns a dispute between the city of Zurich and the company ABZ Recycling AG regarding a contract for the treatment of sewage sludge. The company ABZ Recycling AG had concluded a contract with the city of Zurich to treat the city's sewage sludge. However, it was discovered that the company had paid bribes to a city official to obtain the contract. The city of Zurich then requested the cancellation of the contract due to corruption.
The company ABZ Recycling AG brought an action against the city of Zurich to obtain payment for the services rendered. The city of Zurich contested the claim, arguing that the contract was null and void due to corruption. The court of first instance rejected the city's claim, but the court of appeal overturned the decision and ruled that the contract was null and void.
The company ABZ Recycling AG then appealed to the Federal Court, which rejected the appeal and confirmed the decision of the court of appeal.
Considerations
The Federal Court considered that corruption does not automatically render a contract null and void, but that the contract may be cancelled if the corruption influenced its content. In this case, the court ruled that the corruption had not influenced the content of the contract, but that the city of Zurich had made a fundamental error in concluding the contract.
The court also considered that the cancellation of the contract for fundamental error had the consequence that the contract was deemed null and void from the beginning, but that the parties had to return the services…