On May 29, 2008, the respondents submitted a French translation of a legal opinion written by an Italian professor and established by arbitration. A copy of this translation was sent to the complainant. The complainant therefore failed in her attempt to show that the Court of Arbitration was competent to Z.______ because of the direct application of the arbitration agreement theory by way of referral (see appeal, paragraph In a majority judgment, the arbitrators refused the jurisdiction of the Italian parent company. The applicant in the arbitration appealed to the Federal Court on the grounds that the jurisdiction had been unfairly denied. (13) In this case, respondent 2 was aware of the loan agreement and the compromise clause it contained. This is apparent from the following information: (i) respondent 2 signed the third amendment to the loan agreement three years after the guarantee was signed. (ii) The Third Amendment explicitly states that the dispute settlement mechanism of the loan agreement (i.e. the arbitration procedure of the IAF based in Finland) will apply. (iii) The parties agree that respondent 2 granted the guarantee of the loan to the respondent 1.

Without prejudice to the findings of the sole arbitrator on the merits, respondent 2 was de facto involved in the performance of the loan agreement. Guarantees and letters of credit are the lifeblood of international commercial payments. At the same time, arbitration has focused on the cutting edge of international trade as a preferred means of resolving cross-border trade disputes. As a result, these payment instruments can often be subject to arbitration. The objective of this study is to provide an analysis of the different aspects of this scenario and the complications associated with it. The study gives a first overview of the specifics of guarantees and accreditation, which gives the background of research on the functioning of these instruments in arbitration. It then examines the possible sources of arbitration tribunals` jurisdiction dealing with issues relating to guarantees and credit credits and the reasons for the granting of interim facilities to prevent fraudulent acts relating to guarantees or letters of credit.