SICPA case: Türkiye’s Court of Cassation puts a contractual penalty claim exceeding €100 million back in focus

The record

According to Ekonomim, the arbitral tribunal found that SICPA had breached its contractual obligations. Despite that finding, the tribunal rejected Derinay Enerji’s contractual penalty claim exceeding €100 million, deciding that the loss should be established separately and assessed as damages. The dispute has now entered a new legal phase following a significant reversal by Türkiye’s Court of Cassation. The court overturned the Istanbul Regional Court of Appeal’s decision rejecting the application to set aside the arbitral award and sent the case back for reconsideration. The objections to the arbitrator’s impartiality and the legal future of the claim exceeding €100 million are therefore back under scrutiny. [1]

The dispute arises from a share transfer agreement between Derinay Enerji, SICPA Finance SA and SICPA SA (CH). Citing Derinay’s statement, the report says the tribunal found contractual breaches but rejected the contractual penalty claim exceeding €100 million, deciding that the loss should instead be assessed as damages.

Derinay’s objection centres on the allegation that the arbitrator appointed by SICPA, Prof. Dr. Erdem Büyüksağiş, had not disclosed past academic and professional relationships with the company’s lawyers. According to Ekonomim’s account, the Court of Cassation held that the availability of this information online did not remove the arbitrator’s duty of disclosure. [1]

The validity of the arbitral award is consequently subject to renewed review. The future of the contractual penalty claim depends on the outcome of the continuing legal proceedings.

One factor adding weight to this development for SICPA is the final Swiss sanction in the company’s past. On 27 April 2023, Switzerland’s Office of the Attorney General imposed a total payment obligation of CHF81 million on SICPA SA (CH) for corporate criminal liability connected with corruption. That sum comprised a CHF1 million fine and a CHF80 million compensatory payment. According to the prosecutor’s annual report, identified organisational deficiencies enabled employees to bribe foreign public officials in Brazil, Colombia and Venezuela. The report also states that the decision became final. [2]

In its statement at the time, SICPA said it disagreed with the grounds for the sanction. The company maintained that the acts had taken place without its knowledge or approval, that it had sanctioned those responsible, and that it had remedied the shortcomings in its compliance system. [3]

Commercial relationships in Türkiye are also under separate examination. The Ledgers’ investigation published on 6 October examined the consultancy relationship linked to the 2014 tax-stamp tender, and the revenue reports, invoices and payment disputes described in correspondence dated January 2018. That investigation distinguished the commercial structure shown by the documents from the parties’ unverified allegations. [4]

The Ledgers will continue its investigation by putting detailed questions to both Derinay Enerji and SICPA about the scope of the contract, the arbitration proceedings, the selection of arbitrators, the impartiality objections and the calculation of the contractual penalty. The parties’ responses and any documents they provide will be assessed in the next investigation.

Based on reporting from: Ekonomim · Court of Cassation reversal in the SICPA dispute; Swiss Office of the Attorney General · Annual Report 2023; SICPA · Statement on the Swiss decision; The Ledgers · 2014 tax-stamp tender: invoices and correspondence.