The capacity to be a party to an international arbitration procedure with its seat in Switzerland in the event of bankruptcy

Facts

The decision concerns a Portuguese company, X. Lda., which was declared bankrupt. The company had entered into an arbitration agreement with another company, Y. Ltd. The question arose as to whether the bankrupt company could still be a party to an international arbitration procedure with its seat in Switzerland.

The arbitral tribunal decided that the bankrupt company was still capable of being a party to the arbitration procedure. The company challenged this decision before the Swiss Federal Court, arguing that the bankruptcy prevented it from being a party to an arbitration procedure.

The Swiss Federal Court examined the question of the capacity to be a party to an international arbitration procedure with its seat in Switzerland in the event of bankruptcy. It considered that the capacity to be a party to an arbitration procedure is governed by Chapter 12 of the PILA and that the capacity of a Portuguese bankruptcy estate to be a party is bound by the arbitration agreement.

Considerations

The Swiss Federal Court examined the question of the capacity to be a party to an international arbitration procedure with its seat in Switzerland in the event of bankruptcy. It considered that the capacity to be a party to an arbitration procedure is governed by Chapter 12 of the PILA.

The court also examined the question of the validity of the arbitration agreement in the event of bankruptcy. It considered that the arbitration agreement is valid if it is in accordance with the law chosen by the…