Finally, from a Swiss point of view, the extension of arbitration agreements to non-signatories is permitted if the non-signatory has been so involved in the negotiations and/or execution of the underlying agreement that he has expressed his wish to be bound by the arbitration clause by such conduct. This Standard applies regardless of the non-signatory involved (i.e. governmental or private) and applicable law (e.B. PILA or NYC). The court found that A had not demonstrated that the lower court had arbitrarily applied Slovenian law when it found that the parties had tacitly renewed the agreement and the arbitration clause contained therein. Furthermore, the General Court noted that, even assuming an arbitrary application of Slovenian law, A had not established that the lower court had refused to extend the arbitration clause on the basis of Slovenian law. Finally, as regards A`s argument that the extension of the arbitration clause was not valid from the formal point of view of Article II(2) NYC because it occurred only implicitly, the Court held that the reasoning of the Lower Chamber could not be challenged. In the Court`s view, the lower court was right to conclude that no formal condition was required for a mere extension of an arbitration clause under Article II(2) of the NYC. Finally, the General Court held that the substantive validity of the arbitration clause must be justified in the light of the substantive law applicable to the arbitration clause, that is to say, in the present case, Slovenian law. However, the Court of First Instance pointed out that A had not shown that such an extension of the arbitration clause to a third party had not taken place under Slovenian law. On the contrary, the Court held that A`s objections were limited solely to the lack of formal validity of the arbitration clause under Article II(2) of the NYC, which had proved to be unfounded. Given that BSSA had complied with the agreement for several years, the court held that it should be interpreted as expressing BSSA`s intention to be bound by the agreement and the arbitration clause in place of the BAG.

In addition, the Court concluded that A`s argument that BSSA was not bound by the arbitration clause because it had not signed the agreement was contrary to the principle of good faith (venire contra factum proprium). Because A had: According to Swiss doctrine and jurisprudence, the arbitration agreement can be extended to third parties in certain circumstances (e.B legal succession, lifting of the corporate veil or group of companies). This undisputed practice has been established in CSSF judgments (e.g. CSSF decisions 145 III 199 (202), 134 III 565 (567 et seq.) or 129 III 727 (735)). The Supreme Court then set out the basic principles: according to the principle of relativity of contractual obligations, an arbitration clause in a contract is generally binding only on the contracting parties. However, the Supreme Court has long confirmed that an arbitration clause may, under certain conditions, also bind persons who have not signed the contract and who are not mentioned in it. B, for example, in the case of assignment of a receivable, assumption of debts or transfer of a contract. Even if a third party is involved in the performance of a contract that contains an arbitration clause, it is deemed to have accepted the arbitration clause by conduct. The dispute reported arises from an agreement on the construction and operation of large-scale electricity generation in Bangladesh between a Korean company and several South Asian companies (defendants).

After many problems, the Korean company commenced ICC arbitration proceedings against these other parties. The defendants (and respondents) then requested that the subcontractor (complainant) be included as a party to the arbitration. The subcontractor challenged the jurisdiction of the arbitral tribunal. The arbitral tribunal decided to initially limit the proceedings to this question of jurisdiction in order to clarify which parties are bound by the arbitration agreement. The arbitral tribunal rendered a partial final decision on jurisdiction and declared itself competent in respect of the claims made by the defendants, which confirmed that the subcontractor was also bound by the arbitration agreement. The subcontractor appealed this decision to the SFSC, arguing that it was not a party to the arbitration agreement. This would be consistent with the Supreme Court`s previous case-law, according to which the formal requirement of Article 178(1) of the IPRG5 applies only to the declarations of intent of the (initial) parties to the arbitration agreement, while the applicable substantive law determines whether or not a third party is bound by the arbitration agreement. The Supreme Court then concluded that the distinction between the formal and substantive validity of the extension of an arbitration agreement to a third party under the New York Convention does not differ from the New York Convention.

By its decision 4A_646/2018, the Swiss Federal Court of Justice upheld a decision of a state court in which the court extended an arbitration clause to a non-signatory and referred the dispute to an arbitral tribunal in accordance with Article II, paragraph 3, of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The extension of the arbitration agreement to third parties cannot be regarded as a general rule First, the Supreme Court decided for the first time that it would apply its previous case-law on the extension of an arbitration clause to non-signatory third parties (so far only with regard to Article 178 IPRG – see Decision 129 III 727 ) also with regard to Article II NYK. . . . .