Non-entry on appeal against partial arbitral award on reimbursement of an advance on costs; recourse claim not reviewable under the public policy reservation

Facts

The parties were in an internal arbitration proceeding seated in Fribourg (ad hoc arbitral tribunal). The respondent [B.] (claimant) initiated the proceeding on 13 February 2015 against the appellant [A.] (respondent) and sought, among other things, payment of Fr. 1'972'291.50 plus interest and definitive lifting of the debt enforcement opposition in a debt enforcement proceeding.

The arbitral tribunal was constituted (constitution order of 23/25/27 May 2016). Pursuant to paragraph 11, the parties were each to pay half of an advance on court costs of Fr. 30'000.-- (Art. 378 CPC). The appellant declared that he was neither willing nor able to pay this advance. The respondent then also paid the appellant's share.

By arbitration claim of 31 January 2018, the respondent requested that the appellant be ordered, in a partial arbitral award, to reimburse Fr. 30'000.-- plus interest at 5% since 31 October 2016. The appellant requested non-entry, alternatively dismissal, and in turn security for his presumed party costs of Fr. 80'000.--, which was dismissed on 19 December 2018. By interlocutory decision of 31 October 2019, the arbitral tribunal affirmed its jurisdiction. By partial decision of 23 December 2019, it ordered the appellant to pay Fr. 30'000.-- plus interest at 5% since 31 October 2016.

The appellant filed a civil law appeal with the Federal Supreme Court and requested that the partial decision be set aside and that suspensive effect be granted, which was dismissed by presidential order of 23 April 2020. The arbitral tribunal waived a response; the respondent requested dismissal, insofar as the appeal was admissible.

Considerations

The arbitration proceeding is an internal one, since at the time the contract was concluded the parties resided in Switzerland and did not agree to the application of the PILA (Art. 353 para. 2 CPC, Art. 353 et seq. CPC). The parties waived a cantonal appellate instance (Art. 390 para. 1 CPC), so that the civil law appeal to the Federal Supreme Court is available (Art. 77 FSCA, Art. 389 et seq. CPC).

Only arbitral awards that are determined by their content and not by their designation are subject to appeal (BGE 136 III 597). These include final, partial and interim arbitral awards (Art. 392 CPC). Procedural orders, such as those on payment of an advance on costs, are however not subject to appeal, since the arbitral tribunal can revert to them (BGE 136 III 597). Here, however, it was not a decision on an advance but a partial arbitral award that grants the arbitration claimant, without reservation, a recourse right against the defaulting arbitration respondent. The appeal is therefore admissible, even though the arbitral tribunal will regulate the definitive allocation of costs in the final arbitral award (Art. 384 para. 1 lit. f CPC).

The jurisdictional objection (Art. 393 lit. b CPC) is forfeited, since the appellant did not challenge the unappealed interlocutory decision of 31 October 2019 by way of a jurisdictional appeal (Art. 392 lit. b, Art. 393 lit. b CPC; BGE 140 III 477).

The appeal is admissible only on grounds of manifest violation of the law or of equity, as well as manifestly incorrect findings contrary to the record (Art. 393 lit. e CPC). Only substantive law can be manifestly violated, not procedural law, unless a procedural error violates procedural public policy (BGE 142 III 284). The complaints against the conduct of the proceedings (Art. 383 CPC, Art. 384 para. 1 lit. f CPC, partial award instead of final award) and the comparison with state…