In <span class="news-text_italic-underline">Thales v Vitrus (ECLI:NL:GHAMS:2025:1631)</span>, the Amsterdam Court of Appeal recently ruled on a request to annul an ICC arbitration award. The court suspended the annulment proceedings and remitted the case to the arbitral tribunal, after finding that the award was made in a manner that violated public policy, but allowing the tribunal an opportunity to rectify the identified defect.
The dispute arose from an agreement between a Brazilian company, Vitrus, and a Dutch company, Thales, for the construction of a satellite system. Allegations of corruption emerged against Vitrus’ principal, which led Thales to suspend payments and terminate the agreements. Vitrus initiated ICC arbitration in Amsterdam, seeking outstanding payments, while Thales counterclaimed, alleging breaches of warranties related to ethical business conduct.
The tribunal ruled in favor of Thales, dismissing Vitrus' claims and upholding the counterclaim. The tribunal's decision relied heavily on evidence, including depositions from employees of a Brazilian company, Odebrecht, which had been presented in an indictment by the Brazilian public prosecutor.
Vitrus sought annulment of the award before the Dutch courts, arguing that the tribunal’s reliance on evidence that had been declared inadmissible by Brazil’s highest court violated public policy. The court noted that the Brazilian court had referred to the depositions as "inevitably compromised" and "lacking minimum evidential basis", making their use in the arbitration problematic.
Despite the tribunal's reasoning that the evidence could still be used despite its inadmissibility in Brazilian criminal proceedings, the Court of Appeal pointed out that the tribunal failed to adequately explain whether the inadmissibility was "technical" or substantiate how it weighed the concerns regarding the fairness of the evidence collection process.
While the court concluded that the use of this evidence violated public policy, it did not annul the award. Instead, the court suspended the annulment proceedings and remitted the case back to the tribunal, providing it with an opportunity to address the identified public policy violation. The tribunal may remedy the issue by reopening the proceedings or taking other appropriate actions.
Although the <span class="news-text_italic-underline">Dutch Arbitration Act</span> typically precludes remission of awards made in violation of public policy, the Court of Appeal took a more flexible approach, acknowledging ongoing academic discussions about the correction of such defects. The court reasoned that the public policy issues raised by the award were capable of being addressed and that the tribunal's decision hinted at the possibility of other admissible evidence being available.
This decision marks an important development in the approach to public policy violations in arbitration, as the court allowed the possibility of remedying the defect instead of issuing a full annulment.
