Setting aside application in a EUR 300 million arbitration over a high-speed rail link between France and Spain dismissed by the Swiss Supreme Court

Lenz & Staehelin successfully represented the French Republic as Defendant in setting aside proceedings before the Swiss Supreme Court, against a partial arbitral award made in a Geneva-seated ad hoc arbitration. The dispute has its origin in the Madrid Agreement of 1995, in which the French Republic and the Kingdom of Spain agreed to develop a high-speed rail link between Perpignan in France and Figueras in Spain. The concession was awarded in 2004 to a Spanish company. After losing two prior arbitrations relating to the project (including court proceedings in Geneva for challenge of an arbitrator in which the French Republic was also represented by Lenz & Staehelin), the Spanish company introduced a third arbitration in January 2016 against both States, seeking compensation for close to EUR 300 million of alleged losses. In June 2017, in response to procedural issues raised by the Spanish company, the Arbitral Tribunal made a partial award holding, inter alia, that the Claimant could not elect to discontinue the arbitration proceedings without prejudice.

The Spanish company brought setting aside proceedings before the Swiss Supreme Court against the partial award. On 19 December 2018, the Swiss Supreme Court dismissed the application in its decision 4A_394/2017, siding with the Defendants on the ground that the Arbitral Tribunal had jurisdiction to decide that the withdrawal of the Claimant's claims could not be made without prejudice. The Supreme Court also rejected as inadmissible a second ground raised by the Claimant against the partial award.

The Lenz & Staehelin team included partner Xavier Favre-Bulle and associate David Dubin.

Link to the Supreme Court Decision 4A_394/2017

Published: 22 February 2019