ICC Rules: 1988

Claimants: Swiss & Bahamian companies, German citizen

Defendants: British Virgin Island company, USA citizen

The parties entered into a series of agreements relating to Claimants' use of the corporate Defendant's computer programmes and technology. Following disputes in connection with the performance of such agreements, the parties' rights and obligations were restated in a new agreement, which in turn also gave rise to controversy. In the arbitration proceedings, Claimants sought an affirmation that Defendants had no claims against them arising from any of the aforementioned agreements. They also asked for damages and for certain provisional and protective measures. This interim award covered the issues of jurisdiction and preliminary/protective measures.

Arbitration clause in one of the initial agreements:

'"All disputes arising in connection with any Related Agreement shall be settled by final and binding arbitration in Zurich, Switzerland in accordance with the Rules of Arbitration and Conciliation of the International Chamber of Commerce before a tribunal of three arbitrators. The decision of the Arbitral Tribunal shall be final and the Parties waive all challenge of the award in accordance with Article 192 of the Private International Law Statute. Without prejudice to the rights of either party to have recourse to the competent ordinary courts for such relief, the Arbitrator(s) shall have power to grant preliminary and permanent injunctive relief and to order specific performance of the Related Agreements. The Parties agree that such arbitration shall be conducted in the English language, and any court of competent jurisdiction may enter a judgment on the arbitral award. The panel of arbitrators will be chosen as follows: one arbitrator by [Claimant companies], one by [Defendant company] and the third arbitrator by the other two. If either party fails to appoint an arbitrator within thirty (30) days after receipt of notice of arbitration or if the third arbitrator is not appointed within forty-five (45) days from notice of arbitration, the appointment shall be made by the President of the Commercial Court of Zurich, Switzerland. The Parties acknowledge that a failure by [Defendant company] to perform its obligations under the Related Agreements regarding the delivery to [Claimant company] of Technology or new Technology or a failure by either party to perform its obligations under the Related Agreements regarding the confidentiality, non-disclosure and protection of the Technology or New Technology will cause the other party immediate, irreparable harm, for which monetary damages will be inadequate compensation, and that either party shall be entitled to preliminary and permanent injunctive relief from such harm."'

Arbitration clause in the later agreement:

'"All disputes arising in connection with this Agreement shall be settled by final and binding arbitration in Zurich, Switzerland under the Rules of Arbitration and Conciliation of the International Chamber of Commerce before a tribunal of three arbitrators. The decision of the Arbitral Tribunal shall be final, and the Parties waive all challenge of the award in accordance with Article 192 of the Private International Law Statute. The Arbitrator(s) shall have power to grant preliminary and permanent injunctive relief and to order specific performance of this Agreement. The Parties agree that such arbitration shall be conducted in the English language, and any court of competent jurisdiction may enter a judgment of the arbitral award. The panel of arbitrators will be chosen as follows: one arbitrator by [Claimant companies], one arbitrator by [Defendant company], and the third by the other two. If either party fails to appoint an arbitrator within thirty (30) days after receipt of notice of arbitration or if the third arbitrator is not appointed within forty-five (45) days from notice of arbitration, the appointment shall be made by the President of the Commercial Court of Zurich, Switzerland."'

Defendants contested the validity of the arbitration agreements on grounds of fraud and/or intimidation. The Arbitral Tribunal examined this issue in the light of Swiss substantive contract law, which it considered to be applicable to the questions of formation, validity and voidability of the arbitration agreement. It found the agreements to be valid. With respect to preliminary and protective measures, it stated as follows:

'In the original request for arbitration Claimants had made the following requests for provisional and protective measures:

"1. Defendants shall be ordered to refrain from further pursuing any action in Texan or United States courts, in particular the action which they filed against Claimants before the District Court of Harris County, Texas . . . pending delivery of the final award by the Arbitral Tribunal in accordance with this Request for Arbitration;

2. Defendants shall be ordered to deposit with the Arbitral Tribunal or such trustee as the Arbitral Tribunal may designate the four 3-1/2" disks containing [Claimant company] indicators and models on the cash currency markets in Dollar/Deutsche Mark, Dollar/Swiss Franc, Dollar/British Pound and Dollar/Yen as well as certain cash currency data which were delivered by [Claimant company] to [Defendant company].

3. Defendants shall be prohibited from making any use of or from disseminating the [Claimant company] Technology and [Claimant company] Data . . . pending delivery of the final award by the Arbitral Tribunal in accordance with this Request for Arbitration."

In their brief of . . ., Claimants declare that requests 1. and 2. had become obsolete. They maintain their request no. 3 pursuant to which Defendants should be prohibited from making any use of [Claimant company] technology data which they may have.

At the hearing, Defendants' representative stated that they denied to have in their possession any of Claimants' technology but that Defendant also undertook not to use any of Claimants' technology during the course of the arbitration.

Based on this declaration of Defendants, there is no sufficient likelihood or danger of Defendants' using any of Claimants' technology. There is, therefore, no reason or necessity for the Arbitrators to grant an injunction against Defendants at this time.

. . .

Based on the above, the Arbitrators make the following Interim Award . . .

At this time, Claimants' requests for preliminary and protective measures are rejected to the extent not already withdrawn by Claimants.

The determination of amount and attribution of costs is left to the final Award.

. . .'