Groupement d'Entreprises Fougerolle v CERN

CourtFederal Tribunal (Switzerland)
Switzerland, Federal Tribunal.
Groupement d'Entreprises Fougerolle

International organizations Immunity Jurisdictional immunity European Organization for Nuclear Research (CERN) Dispute concerning construction contract Contract providing for ad hoc arbitration Arbitral award Application to municipal court for annulment of award Whether CERN entitled to jurisdictional immunity CERN-Switzerland Headquarters Agreement, 1955 (Articles 1 and 6) Scope of immunity of CERN from legal process Whether entitled to absolute immunity Requirement for CERN to make provision for settlement of disputes (Article 24 of Agreement) Whether provision in contract for ad hoc arbitration constituting waiver of immunity Nature of arbitration procedure Whether excluding jurisdiction of courts of forum State

Arbitration Agreement to arbitrate Ad hoc arbitration between international organization and private company Arbitration clause inserted in contract Whether excluding jurisdiction of forum State

Arbitration Award Recognition Action for annulment before municipal courts Arbitration between international organization and private company Provision in arbitral agreement that award shall be final Whether jurisdiction of courts of forum State excluded The law of Switzerland

Summary: The facts:The European Organization for Nuclear Research (cern), whose seat was in Geneva, decided to construct, partly on French and partly on Swiss territory, a circular tunnel as the site for a large electron/positron collider (LEP). The work was awarded to a consortium of five companies known as Groupement Fougerolle. The contract, concluded in 1983, provided for any dispute to be submitted toad hoc arbitration. In 1986 Fougerolle invoked the arbitration procedure, claiming 430 million Swiss francs as an equitable increase in the cost of the work. In an award of 27 December 1991, the arbitral tribunal granted to Fougerolle only 45 million Swiss francs for costs incurred by the acceleration of the works. Fougerolle lodged a public law appeal before the Federal Tribunal, seeking the annulment of the award. cern invoked its absolute jurisdictional immunity in relation to every form of legal process before national courts.

Held:The appeal was inadmissible since cern was entitled to jurisdictional immunity.

(1) In the Headquarters Agreement concluded in 1955 (Article 1), the Swiss Federal Council had recognized the international personality and legal capacity of cern. In contrast to States, however, the jurisdictional immunity of international organizations was not derived directly from their international personality. Since such organizations were not full subjects of international law, their immunity had to be based on an instrument of public international law. In this case, Article 6 of the Headquarters Agreement established that cern enjoyed immunity from every form of legal process, in the absence of waiver. That immunity from the jurisdiction of the courts of the host State was absolute and the distinction between acts performedjure gestionis and jure imperii did not apply to international organizations (pp. 21112).

(2) As the counterpart of such immunity, international organizations normally gave an undertaking in the Headquarters Agreement to make provision for appropriate methods of settlement of disputes. Article 24 contained such an undertaking in the case of cern. In practice, such organizations generally considered that arbitration was the only appropriate method for the settlement of disputes arising out of contracts with private persons. They also considered that, with rare exceptions, waiver of their immunity would be in conflict with their independence (p. 212).

(3) Where, as here, ad hoc arbitration was chosen and the...

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