LALIVE defended an award obtained in arbitration proceedings under the Swiss Rules of International Arbitration in a CHF 80 million dispute between a contractor and its client in one of the largest domestic construction arbitrations in Switzerland to date. The arbitral tribunal, who had found the contractor liable for certain construction defects, ordered the advance payment of repair costs, estimated at some CHF 35 million, for work to be carried out by the owner. The contractor challenged the award before the Swiss Federal Supreme Court, raising the question of the scope of a contractor’s obligation to advance the repair costs of construction defects. The Swiss Federal Supreme Court rejected the challenge, specifying its case law on a contractor’s obligation to pay in advance to the owner the estimated cost of defect repairs to be undertaken by the owner in its stead.
LALIVE partner Matthias Scherer and associates Laura Azaria (both pictured) as well as Eleonore Caroit (no longer in Lalive) represented the owner both in the Swiss Rules arbitration and in the challenge proceedings before the Swiss Federal Supreme Court.