E. The Claimant's Request for a Stay of the Arbitration

…..

3. The Tribunal's Findings

268. As this Tribunal is seated in Switzerland, Swiss law of international arbitration is determining the question whether a stay is warranted or not. The law applicable to the merits is inapposite.

269. In Switzerland, a stay of an arbitration is only justified in case of imperative reasons. Pending criminal proceedings do not automatically or necessarily entail a stay of the arbitration, even if the party requesting the stay believes that it could obtain evidence useful for its position in the arbitration through the criminal proceedings.¹

270. The Swiss position is consistent with international arbitration practice. In 1996, the International Law Association adopted a resolution² according to which "the fact that a pending or forthcoming court case, whether civil or criminal, is related to an arbitral proceeding should not, in itself, cause the discontinuation or suspension of the arbitral proceeding.

271. A commentator of the works of the International Law Association, James Crawford, confirms that the approach taken by the latter also reflects ICC practice: "[t]he trend in International Chamber of Commerce practice is to continue the arbitral proceedings in the event that related civil or criminal proceedings were initiated. Even in cases where a stay might be deemed compulsory under the applicable law, arbitrator has held that this was not a requirement of public policy ('ordre public') and that they retain a discretion in the matter".³ This has been also confirmed by the ICC practice.⁴

272. The Claimant moves that these arbitration proceedings should not be closed before the criminal proceedings that are ongoing in [Claimant’s place of incorporation] have been concluded.

273. It indeed sometimes occurs that criminal proceedings have an impact on arbitration. As recalled above, it is then for the arbitral tribunal upon request of a party to determine whether these parallel proceedings call for a stay. It is irrelevant what position the applying party has in the arbitration. Contrary to the Respondent's view (Respondent's Reply …), a claimant remains entitled to apply for a stay even if the criminal proceedings precede the inception of the arbitration. What matters is not the party's role, but the overall assessment of the impact of criminal proceedings on the arbitration, and the balance between staying the arbitration and bringing it to an end expeditiously.

274. The Claimant argues that waiting for the result of the criminal investigation in the [Claimant’s place of incorporation] would be "giving the Claimant a reasonable opportunity of presenting its case" and that the decision on the basis of the falsified agreement would put the Claimant in substantial disadvantage" (Claimant's Post-Hearing Brief para …).

275. However, as explained above, according to the applicable Swiss position, there is no automatic stay. The applicant has the burden of evidence to demonstrate that in light of all circumstances it is appropriate and necessary to suspend.

276. In the present case, according to the Claimant's submissions, the matter subject to criminal proceedings in [Claimant’s place of incorporation] is the forgery of the [amendment to the Commercial Agency Agreement]. The issue of forgery is relevant for the outcome of this arbitration. However, it is not outside the jurisdiction of the arbitral tribunal. Moreover, the Claimant has difficulties in presenting evidence as to the forged nature of the [amendment to the Commercial Agency Agreement] which is the matter of lack of evidence and hence, as explained above, does not constitute a ground to suspend arbitration proceeding.

277. The Claimant has not met the test imposed by Swiss Federal Supreme Court. Although the Claimant relies heavily on the criminal proceedings, it has not adduced evidence showing the progress of these proceedings, and their likely conclusion. I acknowledge that due to the confidentiality inherent to criminal investigation the Claimant may not be able, or allowed to elaborate in detail on the investigation. However, the proceedings appear to have been triggered by the Claimant. Therefore at least some information would be available to it. Yet, all the Claimant submitted were three letters from [the authorities of Claimant’s country of incorporation] confirming that investigation is pending …

278 …

279 …

280. … The proceedings seem to have resumed after the Claimant's arguments were rejected in the Preliminary Award …

281. The proceedings appear to cover the very issue that was before me in the arbitration, namely the authenticity of the [amendment to the Commercial Agency Agreement]. While my Preliminary Award is not necessarily binding upon a criminal authority, it is certainly binding on me, and on the Parties to this arbitration. There would therefore be little use to stay the arbitration at this stage.

282. A further element I must consider is that I have a duty to render an award as expeditiously as possible under the ICC Rules. The duty of the arbitral tribunal to conduct the arbitration in an expedient manner can also be found in the decision of the Swiss Federal Tribunal. The criminal proceedings were opened [8 years prior to the award]. To this day, no conclusion was found, nor has the Claimant demonstrated that there was any progress or active steps in the investigation, whether by the prosecutors or by the Claimant, who is supposedly the injured party. Neither does the Claimant or the authorities in the three cursory letters the Claimant has tendered as evidence indicate how long the criminal proceedings are likely to take and when they will draw to a close. In fact, the Claimant applies for an open-ended stay of the present proceedings. Such a stay can only be envisaged in most extraordinary circumstances, which the party applying for it has to demonstrate.

283. To be clear, it is not my view the Claimant is obliged to drive the criminal proceedings. It is the very essence of criminal proceedings that they are controlled by the investigative and judiciary authorities, not by the injured parties or suspects. Nor should an arbitral tribunal normally hold a party liable for lack of diligence of such authorities, unless the other party demonstrates that its opponent has a decisive influence on the conduct of the criminal proceedings, be it as a matter of the applicable procedural law or a matter of fact … None of this has been argued by the Respondent though.

284. In any event, the question which I have to examine is much more limited. It is whether on balance, the Claimant’s request for a stay should be granted. On balance, for all the reasons mentioned above I find that it would not be justified to leave the proceedings open, and I will therefore render the present Final Award.

---

---