Article 190(2) of the Swiss Private International Law Act (PILA) permits a final award to be set aside for a limited number of reasons, including:

The case concerns a dispute arising between the petitioners (B Ltd, B, C Trustee and D Trust) and the respondent (A) arising out of a sales contract and an employment agreement entered into between the parties in March 2006.

In April 2007, B Ltd initiated arbitration proceedings against A. By an interim award, which was later upheld by a decision of the Swiss Supreme Court, the sole arbitrator extended the arbitration to include B, C Trustee and D Trust as joint-claimants in the proceedings against A.

Finding that A had validly rescinded the parties' agreements, the sole arbitrator issued an award on 22 February 2011 dismissing, or declaring inadmissible, the claims made the petitioners by B Ltd, B, C Trustee and D Trust against A, and partially upholding A's counter-claim.

On 31 March 2011, B Ltd, B, C Trustee and D Trust filed a petition with the Swiss Supreme Court to set aside the award, claiming violations of its right to be heard under Article 190(2)(d) PILA. In the alternative, the petitioners argued that the award should be annulled under Article 190(2)(c) PILA as the sole arbitrator did not address in his award all claims put before him by the petitioners in the arbitration.

The Swiss Supreme Court rejected the petition to set aside the award based on the following main reasons.

As a preliminary issue, the Supreme Court briefly addressed the fact that one of the parties appearing before it was a trust organised under the laws of Guernsey. Choosing not to directly confront the issue of the legitimacy of D Trust under Swiss law, the Supreme Court granted such entity the right to appeal and appear before it without going into further detail as to its legal status. The Supreme Court reasoned that it could do so, given that the grounds for the annulment of the award being argued before the court made no distinction as to the legal position of a single party.

The Supreme Court rejected many of the petitioners' arguments which were argued under the sub-heading of the right to be heard, but which in fact related to the merits of the parties' dispute and the sole arbitrator's appreciation of evidence. The Supreme Court reiterated the principle that it will only examine those complaints that emerge with sufficient clarity and that are motivated in compliance with the requirements of its procedural code.

Of the arguments maintained by the petitioners under the heading of a violation of their right to be heard was the argument that this right had been infringed when the sole arbitrator had not, prior to the issuance of his award, afforded the parties an opportunity to take a stance on any unclear factual aspects of the case or given them a chance to complete allegations and provide additional evidence. Rejecting these arguments and confirming existing case law, the Supreme Court reaffirmed the notion that a party's right to be heard does not include the right to be notified of the decisive character of an element of fact which will serve as a basis of an arbitrator's decision. This principle presumes that the fact is indeed alleged and duly proven. Furthermore, the Supreme Court held that a party cannot claim that the arbitrator or judge, before issuing its opinion, must first warn such party that the document they had produced does not prove a particular fact for which it was intended.

This case touches upon several procedural and substantive issues which arise in the context of proceedings to set aside an award before the Swiss Supreme Court.

First of all, the case is a further reminder that the Supreme Court will not perform the work of counsel and that any petition for a challenge of an award should be carefully considered and adequately supported. Therefore, counsel should avoid confusing a petition to set aside an arbitral award with an opportunity to re-address questions on the merits.

Second, the case also serves as further guidance on the principle of the right to be heard as it relates to the facts and evidence. It is important to note that, although parties will give a certain probative value to a piece of evidence, an arbitrator can take a different position on that evidence without infringing the parties' right to be heard. The arbitral tribunal does not have to inform the parties ahead of time, as would be the case for the application of legal principles that the parties did not expect or could not have expected based on the submissions and would therefore "surprise" them.