SSW’s latest victory in New York arbitration

SSW Pragmatic Solutions won an international arbitration case commenced by the world’s largest restaurant chain, managed by Subway International B.V. The case was conducted under the UNCITRAL Arbitration Rules and administered by the ICDR/AAA (International Centre for Dispute Resolution/American Arbitration Association). The seat of arbitration was in New York.

This is yet another case in which SSW’s lawyers represented Polish franchisees against claims filed by Subway, pursuant to franchise agreements. The arbitral tribunal issued an award which fully upheld the franchisees’ position that the tribunal lacked jurisdiction and was not entitled to decide the case on its merits.

This award sets a precedent for future cases, as it calls into question the manner in which Subway has managed its arbitrations to date. Each year, Subway commences thousands of arbitrations against franchisees from all over the world. The award obtained by SSW confirms that the practice adopted by Subway and the ICDR in previous cases was contrary to the UNCITRAL Arbitration Rules. The tribunal agreed with SSW’s arguments that, in the event that the parties fail to agree on the choice of an arbitrator, the ICDR has no power to act as the appointing authority. Consequently, the sole arbitrator appointed by the ICDR declared that the tribunal lacks jurisdiction to decide the case in such circumstances.

The award acknowledges the importance of the principles of party autonomy and the ‘equality of arms’ which should apply during each phase of the proceedings, particularly while choosing an arbitrator.

SSW’s lawyers leading the case were: Hubert Wysoczański, Ph.D., Filip Balcerzak, LL.M., Ph.D. and Wojciech Jaworski, LL.M.