Abstract

Interim Award in Case 9719 (Extract)

English

The claimant and defendant, both companies, entered into an agreement, whereby the former would provide services to the latter's Far East subsidiary for the purpose of securing contracts and strategic planning. The contract was closely tied to the person of Mr X, who, on the same day as the agreement was signed, was appointed as managing director of the said subsidiary. The claimant initiated arbitration proceedings in order to recover money it alleges was due to it under the agreement. The defendant raised jurisdictional and procedural objections, asserting that the claimant was a fictitious company and therefore lacked capacity to sue and that Mr X, not the claimant, was the real party to the agreement. This was denied by the claimant, which stated that the parties deliberately decided to structure their relationship through two distinct contracts-the agreement between the claimant and the defendant, and the letter of appointment between the defendant's Far East subsidiary and Mr X-each of which had different governing law and jurisdiction clauses-Swiss law and ICC arbitration in the case of the former, and the law and courts of the Far East country in the case of the latter. The defendant contested this assertion by pointing out that the agreement contained the main rules concerning the employment of Mr X. It further argued that Mr X should be considered the real party in application of the piercing of the corporate veil doctrine. After finding that the claimant was not a fictitious company and had legal capacity to be a party to the arbitration and that there was no proof of any lack of assent, material error or deceit relating to the arbitration agreement, the sole arbitrator ruled as follows on the doctrine of piercing the corporate veil.