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International Arbitration Forum

Dow AgroSciences Switzerland S.A. v. PJSC “Kompaniia ‘Raiz’”

Case summary

At a glance

Parties
Dow AgroSciences Switzerland S.A. (award creditor) v. PJSC "Kompaniia 'Raiz'" (Ukraine, award debtor)
Case no.
No. 759/6378/15-ц (Supreme Court proceedings No. 61-9395св18; Court of Appeal case No. 22-ц/796/12363/2016)
Court
Sviatoshynskyi District Court of Kyiv; Court of Appeal of Kyiv; Supreme Court of Ukraine (Civil Cassation Court, First Judicial Chamber)
Underlying award(s)
Final award of 16 February 2015 of the Arbitral Court of the Swiss Chambers' Arbitration Institution, case No. 600373-2014 (sole arbitrator, Swiss Rules of International Arbitration, Zurich)
Treaty
New York Convention 1958 (Articles I, II, III, V)
Court
Supreme Court panel: V. A. Strilchuk (presiding), A. S. Oliinyk, S. O. Pohribnyi (reporting judge), O. V. Stupak, H. I. Usyk
Sector
Agriculture; sale of corn and sunflower seeds
Outcome
Recognition and enforcement in Ukraine granted. The Court of Appeal limited it to the sums stated in the award, and the Supreme Court upheld that ruling on 20 March 2019.
Amount
Award: USD 2,064,849.00 plus 5% annual interest (on USD 14,100.00 from 16 October 2013 and on USD 2,050,749.00 from 26 October 2013); CHF 49,500.00 arbitration costs; CHF 37,480.95 legal costs. The creditor finally asked for USD 2,353,664.32 and CHF 86,980.95. The District Court granted UAH 61,383,122.11 in total. The Court of Appeal converted the principal to UAH 53,476,078.86 and the costs to UAH 1,311,443.10 and UAH 993,012.79, and left the interest as stated in the award. Court fee: UAH 243.60.

The dispute

Dow AgroSciences Switzerland S.A. sold corn and sunflower seeds to the Ukrainian company PJSC \"Kompaniia 'Raiz'\" under two contracts of 15 November 2012 (Nos. 05102012 and 07102012). Section 14 of each contract provided for arbitration in Zurich under the Swiss Rules of International Arbitration. In a final award of 16 February 2015, a sole arbitrator under the Swiss Chambers' Arbitration Institution ordered Raiz to pay the unpaid price with interest and the costs. Dow applied to the Kyiv courts for recognition and enforcement under the New York Convention. Raiz objected on four grounds: (1) the clause named no existing institution, so the award was made by a body the parties had not agreed on; (2) Swiss law required three arbitrators, not one; (3) the English and Russian versions of the clause differed, and a linguistic expert examination should have been ordered; (4) the creditor had added its own interest calculations to the sums in the award.

Key holdings

  1. The District Court granted recognition and enforcement. It found the award final, not previously enforced, and made after Raiz had been properly notified of the arbitration and of the appointment of the sole arbitrator. It refused a linguistic expert examination and relied instead on the testimony of a court-admitted interpreter. District Court ruling of 16 August 2016, pp. 2–4
  2. The Court of Appeal held that the failure to give the exact name of the institution does not make the arbitration clause invalid. The clause referred to an arbitral court in Zurich, and the Swiss Chambers' institution qualifies as one. Raiz had never objected to that institution during the arbitration. Court of Appeal ruling of 6 October 2016, p. 4
  3. The Swiss Rules, not the Swiss Code of Civil Procedure, governed the number of arbitrators, and Raiz did not object to the sole arbitrator. The difference between the Russian and English texts had no legal effect, because section 15 of the contracts gives the English version priority. Court of Appeal ruling, p. 5
  4. The enforcing court may not review an award or change it. The first-instance court acted outside its competence when it calculated interest sums the award did not state (USD 1,999.10 and USD 287,947.63). The Court of Appeal therefore set that ruling aside and granted enforcement in the terms of the award's operative part. Court of Appeal ruling, pp. 5–6
  5. The New York Convention takes priority over Ukrainian legislation. Courts recognise foreign awards without reviewing their correctness on the merits, and refusal is possible only on the grounds in Article V of the Convention, Article 36 of the Law on International Commercial Arbitration and Article 396 of the 2004 Code of Civil Procedure. Supreme Court ruling of 20 March 2019, pp. 4–5
  6. The objection to the institution and the tribunal's composition is rejected. Raiz took part in the arbitration, acknowledged the debt in writing and raised no objection, which shows it accepted that tribunal. Under the competence-competence principle, the arbitral tribunal had decided its own jurisdiction. Supreme Court ruling, p. 6
  7. The public policy argument is rejected because Raiz had not raised it in the lower courts and did not explain how enforcement would breach Ukrainian public policy. The cassation appeal is dismissed, and enforcement of the Court of Appeal's ruling, suspended on 10 November 2016, is resumed. Supreme Court ruling, p. 7

Procedural history

  1. 24 April 2014The Swiss Chambers' Arbitration Institution sent Dow's notice of arbitration to Raiz, which received it on 29 April 2014.
  2. 18 July 2014The institution appointed Dr Michael Cartier as sole arbitrator.
  3. 16 February 2015Final award in case No. 600373-2014 in favour of Dow.
  4. 22 April 2015Dow applied to the Sviatoshynskyi District Court of Kyiv for recognition and enforcement.
  5. 16 August 2016The District Court granted the application and awarded UAH 61,383,122.11 in total.
  6. 6 October 2016The Court of Appeal of Kyiv set aside the District Court's ruling and granted recognition and enforcement in the terms of the award.
  7. 4 November 2016The High Specialised Court for Civil and Criminal Cases opened cassation proceedings, and on 10 November 2016 it suspended enforcement.
  8. February 2018The case was transferred to the Supreme Court.
  9. 20 March 2019The Supreme Court dismissed the cassation appeal, upheld the Court of Appeal's ruling and resumed enforcement.

Tribunal, counsel and experts

Decided by
For the claimant
O. V. Kuchanskyi

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Case ID
Верховний Суд (Supreme Court), No. 759/6378/15-ц
Country
Claimant
Dow AgroSciences Switzerland S.A.
Respondent
PJSC “Kompaniia ‘Raiz’”
Section

Court: Ukraine, Верховний Суд (Supreme Court)
Date of decision: 20 March 2019
Case number: 759/6378/15-ц
New York Convention provisions: I | I(1) | II | III | V | V(1)
Source: New York Convention case law case database.