The dispute concerned the performance of contracts between a Swiss company (Claimant) and a Libyan company (Respondent). In its Answer to the Request for Arbitration, Respondent contended that Claimant had no standing to proceed in the arbitration as it had not mentioned 'in liquidation' in its corporate name. The arbitration clause in the parties' contracts provided for the application of Libyan law, the provisions of the parties' contracts and international trade practice to the settlement of disputes. In a majority award, the arbitral tribunal addressed Respondent's contention as follows.

'20. On October 19, 2000, [Respondent] raised the argument that the Terms of Reference were not validly underwritten by [Claimant] and that [Claimant] had no standing in the present proceedings as this company was in liquidation since March 3, 1995 and did not indicate this fact after its corporate name.

Procedural Order n° 3 of November 3, 2000, invited both Parties to submit a legal opinion on Swiss law, i.e. the "lex societatis" of [Claimant], concerning the impact of the absence of the suffix "in liquidation" on the validity of the Terms of Reference and on [Claimant]'s standing in the present arbitration proceedings.

Pursuant to the legal opinions from [law professor] and from [law firm], submitted respectively by [Respondent] and [Claimant], the validity of the Terms of Reference and of the further procedural acts in this arbitration has not been affected by the absence of the statement 'in liquidation' after the corporate name.

It follows from i.a. the decision from the Swiss Tribunal Fédéral Meier v. Gerber (ATF 90 II 247) and H. Jenny & Cie v. Chrysler S.A. (ATF 59 88 53), submitted by [Claimant]'s expert, that a company in liquidation is identical to the former company and that a lawsuit filed on behalf of a company in liquidation is validly filed notwithstanding the omission of "in liquidation".

In its opinion of November 8, 2000, [law professor] recognised that the absence of "in liquidation" was not sanctioned under Swiss company law:

Swiss company law does not envisage any sanction in case of a limited company in liquidation acting without mentioning its exact company name.

The consequences of such a deficiency must be examined, as it is a question of court proceedings, with reference to the procedural law of the court.

The procedural consequences which may result from this must be examined in the light of the regulations governing arbitration applicable to the arbitration proceedings in progress, i.e. the regulations on arbitration of the International Chamber of Commerce. . . .

Consequently, no evidence has been submitted to sustain the argument that the lack of the suffix "in liquidation" after [Claimant] has made the Terms of Reference invalid or has affected [Claimant]'s standing in the present arbitration proceedings. However, confirming Procedural Order n° 4 of December 27, 2000, Article 2, in the present award, the initial corporate name of [Claimant] is followed by "in liquidation".

. . . . . . . . .

27. The Contracts are governed by the Libyan law (Contracts Art. 40.1). Moreover, [Claimant] had to respect all Libyan laws and regulations in the performance of the Contracts (Contracts, Art. 30.1).

[Respondent] considers the fact that [Claimant] had entered into voluntary liquidation and that [Claimant] allegedly concealed this liquidation as an instance of "cheating, fraud (dol par réticence) or manipulation" that would authorise the Administrative Authority in charge of the Contracts to cancel the Contracts and to withdraw the work from the contractor under Article 113, e, of the Libyan Decree on Administrative Contracts (1980). Moreover, [Respondent] considers said liquidation as a circumstance of "insolvency" that likewise entitles the Administrative Authority to cancel the Contracts under Article 113, g, of said Decree.

[Claimant] considers that the claim relating to this liquidation and raised only on October 19, 2000, is not admissible because it should be considered as a new claim under Art. 19 of the Arbitration Rules. Furthermore, [Claimant] argues that [Respondent] was already fully aware of this liquidation before the signing of the Terms of Reference on May 17, 2000, as this liquidation was public knowledge since March 1995. Moreover, [Respondent] was specifically informed of this liquidation on July 30, 1999, when an extract from the . . . Registry showing that [Claimant] was in liquidation was included, amongst the Exhibits for Proceedings before the Spanish Courts, submitted to [Respondent]. As [Respondent] was given the information about the liquidation of [Claimant] in 1999, it could have included its claim as to the impact of this liquidation on the Contracts in the Terms of Reference in May 2000. Because [Respondent] did not make its claim at that moment, the claim has to be considered as a new claim.

28. In arbitration it is possible that an Arbitral Tribunal accepts a new claim if it has been raised at an early stage of the proceedings. As a general rule the Arbitral Tribunal would have been entitled to refuse to hear [Respondent]'s new claim because [Respondent] was already aware of the issue months before it submitted its Answer to the Request and signed the Terms of Reference, but failed to make the counterclaim at that time. Nevertheless, the Tribunal, which-once more-has been very flexible towards the way [Respondent] has conducted the arbitral proceedings, allowed [Respondent] to make its argument. However, as already indicated . . ., because [Respondent] later persistently refused to contribute to the arbitration costs, all [Respondent]'s counterclaims are deemed to be withdrawn under the Arbitration Rules. Consequently, the Arbitral Tribunal cannot decide on claims submitted by [Respondent].

As already indicated, the Arbitral Tribunal has granted [Respondent] the fullest right of defence. The objections from [Respondent] therefore were considered to be defences against [Claimant]'s claims so that the Tribunal still could take them into account.

In the case at stake, however, the objections from [Respondent] are not relevant, even if they are considered as defences.

Indeed, the Tribunal has not found "cheating, fraud or manipulation" in the fact that [Claimant] did not expressly inform [Respondent] of its liquidation in March 1995.

[Claimant] was not liquidated to mislead [Respondent], but because the [parent group] had decided that the Swiss [Claimant] company would no longer be used as a contracting party for further projects. Furthermore, as will be demonstrated hereunder, this liquidation had no financial implications for [Respondent]. Moreover, the liquidation was public knowledge since 1995. [Claimant] thus has not misled [Respondent]. In fact it specifically had informed [Respondent] of its liquidation in 1999.'

Under Swiss law, a company in liquidation keeps its full legal capacity. Although it may not undertake new business, it may carry out its ongoing business. It has to fulfil the contracts concluded before liquidation. Consequently, the legal capacity of [Claimant] to remain party to the Contracts, concluded before the liquidation, was not affected by the liquidation. As a matter of fact, in a Note to the Financial Statements on December 31, 1994 and 1995, [Claimant] indicated that it "was committed to fulfil another major contract [=the Contracts] which it had signed in 1991 and which had subsequently been delayed" . . .

The financial capacity of [Claimant] was not affected by the liquidation either. A voluntary liquidation does not imply insolvency. On the contrary, [Claimant] was solvent when it entered into liquidation (see [Claimant]'s financial accounts per December 31, 1994 and 1995 . . .).

Art. 113, g, of the Libyan Decree on Administrative Contracts (1980) therefore does not apply.

Besides, [Respondent] was not financially affected by the liquidation of [Claimant]. In fact, it was [Respondent] that had to pay [Claimant] for its performances. Moreover, [Claimant] did not wind up and vanish but continued to comply with its commitments and its liabilities. Payment of its liabilities had been secured. Indeed, the schedule for payments protected [Respondent] against payments without counterpart as [Claimant] had secured [Respondent]'s down payments by down payment guarantees. [Respondent]'s further payments for deliveries were moreover secured by inspection certificates of [Respondent]'s representative (see Contracts Art. 8.2.3.a, and conditions L/C's). Payment for work was upon certification.'