According to Article 123(2) of the Federal Supreme Court Act (FSCA):

"[R]evision may be requested […] if the applicant subsequently learned of new material facts or discovered decisive evidence which he was unable to submit in the initial proceedings, to the exclusion of such facts and evidence which only arose after the decision."

This provision applies by analogy to the revision of international arbitral awards.

The Italian company, A Spa (A), was granted a licence to sell and distribute various board games in Italy and Switzerland. The licensor was B Inc. (B), a company with its seat in the United States of America. The initial term of the Licence Agreement was to expire on 31 December 2006. However, the Agreement contained a clause providing for automatic renewal for a period of ten years, provided company A achieved specific sales goals for the products F and G in 2006. These goals were not reached.

A initiated arbitration proceedings against B in July 2006. It requested that the arbitral tribunal declare that B had breached various contractual obligations and the principle of good faith, and sued for specific performance or damages. In its counterclaim, B requested that the tribunal declare that the Licence Agreement had expired on 31 December 2006 as A had failed to reach the agreed sales goals.

On 20 April 2009, the arbitral tribunal rejected A's claim for specific performance, ruling that the Licence Agreement had in fact expired on 31 December 2006. However, it found that B had committed various breaches of its contractual obligations and that A was therefore, in principle, entitled to damages.

On 19 April 2010, that is, about a year after the award had been rendered, A submitted a request for revision of the award to the Supreme Court. A claimed to have discovered after the award was rendered that, by 2005/2006 at the latest, B had decided to no longer encourage development or to maintain a thriving market for product G. This information would have been material to the arbitral tribunal's finding regarding the realisation of the sales goals for G as a precondition for automatic renewal of the Licence Agreement. According to A, it discovered this "new" fact when it approached the managing director of B in Italy for information in order to be able to substantiate the quantum of damages due under the award. The latter stated that it was the will of company B to no longer support development of product G in Europe, as the board version of the game was discontinued in the US at the end of 2000 in favour of the internet version.

The Supreme Court first clarified the concept of "new" facts or evidence within the meaning of Article 123(2) FSCA. It held that a fact is new if it existed at a time when it could have been invoked in the arbitral proceedings, but was unknown to the applicant at the time despite the latter's best efforts to investigate the particulars of the case. New evidence within the meaning of Article 123(2) FSCA must also have existed before the award was rendered: the "newness" refers only to the discovery or the availability of the evidence, not to its actual existence. New evidence therefore serves to demonstrate new facts as defined above or facts which were invoked in the arbitral proceedings, but could not be established at the time. Again, the applicant must show that its failure to discover the evidence before the rendering of the award was not due to its own negligence.

The fact claimed by A, namely that B had decided to no longer encourage sales of product G in Europe by 2005/2006 at the latest, existed before the award was rendered. However, the evidence submitted by A in support of this fact, namely the testimony of the managing director of B in Italy and the sales numbers in Europe, did not exist at the time.

The Supreme Court held that, in any event, the issue of company B's "negative behaviour" was already discussed before the arbitral tribunal, which concluded that B not only showed no interest in developing sales of the licensed games on the Italian market, but that B also sought to directly limit and boycott sales of those products. Therefore, the fact claimed by A as a ground for revision was clearly one which was predictable at the time of the arbitral proceedings and A should therefore have recognised that it could be material to the arbitral tribunal's decision and made the effort to obtain the relevant evidence before the award was rendered. Consequently, it rejected the request for revision.

In this decision, the Supreme Court clarifies the previously rather convoluted definition of new facts or evidence which may serve as a basis for revision of an arbitral award. One aspect which has been the subject of some debate in legal literature is whether "new" evidence within the meaning of Article 123(2) FSCA must have existed at the time of the arbitral proceedings or whether evidence which came into existence after the award was rendered (for example, a new affidavit contradicting previous witness testimony or new scientific possibilities to evidence a physical condition) could also be introduced in support of a request for revision. In this decision, the Supreme Court now clearly takes the position that only the former applies. While this distinction may not always be easy to draw in practice, (for example, does witness testimony "exist" when it is given or when it could have been given?) the Supreme Court's approach seems reasonable, as the grounds for revision pursuant to Article 123 FSCA should be interpreted restrictively in order to avoid a weakening of the principle of the finality of the award.

4A_212/2010.