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What are the validity requirements for an arbitration agreement?
Swiss law distinguishes between formal and substantive validity.
With regard to formal validity, Swiss law requires the arbitration agreement to be in writing. Signature by the parties is not required. The written form requirement is considered to be met if the arbitration agreement is concluded in writing or by telegram, telex, telecopier or any other means of communication which permits it to be evidenced in text (Article 178(1) of the Federal Statute on Private International Law). This requirement is also generally met by any modern means of electronic communication, such as email.
It is not settled whether both parties must adhere to the formal requirement of Article 178(1) of the Federal Statute on Private International Law, or whether it is enough that a written offer to arbitrate by one party is accepted orally or tacitly by the other.
With regard to substantive validity, Article 178(2) of the Federal Statute on Private International Law provides that an arbitration agreement is valid if it conforms to the law chosen by the parties, the law governing the subject matter of the dispute or Swiss law. It is sufficient if the arbitration agreement is valid under the substantive law of any of these three laws.
If substantive validity is examined under Swiss law, the parties must have the capacity to validly enter into an arbitration agreement (subjective arbitrability) and the subject matter of the dispute must be arbitrable (objective arbitrability).
In addition, the parties' consent with regard to the essential elements of the arbitration agreement is required. This requires that the parties express their intention to submit their dispute to arbitration and that the arbitration agreement specify the object or the legal relationship subject to arbitration.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
Swiss courts are not allowed to order arbitration if one of the parties does not voluntarily comply with an arbitration agreement. Under Swiss law, the enforcement of an arbitration agreement may be ensured as follows:
- The state courts will decline jurisdiction whenever there is a valid arbitration agreement between the parties, unless the parties proceed on the merits without reservation (Article 7 of the Federal Statute on Private International Law; Article II(3) of the New York Convention).
- A party may refer to a state court to seek assistance in the constitution of the arbitration tribunal (Article 179 of the Federal Statute on Private International Law).
- A party may also turn to a state court if the other party obstructs the conduct of the arbitration proceedings (Article 185 of the Federal Statute on Private International Law).
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?
Chapter 12 of the Federal Statute on Private International Law contains no rules on the consolidation of arbitration proceedings by an arbitration tribunal. By contrast, Article 4(1) of the 2012 Swiss Rules of International Arbitration provides that "where a Notice of Arbitration is submitted between parties already involved in other arbitral proceedings pending under these Rules, the Court may decide, after consulting with the parties and any confirmed arbitrator in all proceedings, that the new case shall be consolidated with the pending arbitral proceedings. The Court may proceed in the same way where a Notice of Arbitration is submitted between parties that are not identical to the parties in the pending arbitral proceedings".
Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
The parties are free to choose the rules of law applicable to their conflict. According to Article 187(1) of the Federal Statute on Private International Law, which applies to all international arbitration tribunals with their seat in Switzerland, a dispute is decided according to the rules of law chosen by the parties or, in the absence of such a choice, according to the rules of law with which the case has the closest connection.
The parties can also authorise the tribunal to decide ex aequo et bono (Article 187(2) of the Federal Statute on Private International Law).
Are there any provisions on the separability of arbitration agreements?
The principle of the separability of the arbitration agreement is set out in Article 178(3) of the Federal Statute on Private International Law. The validity of an arbitration agreement cannot be challenged on the grounds that the main contract between the parties is invalid.
However, this does not preclude the grounds for nullity of the main contract from also affecting the arbitration agreement.
Are multiparty agreements recognised?
Swiss law recognises multi-party arbitration agreements. However, no specific provisions of the Federal Statute on Private International Law deal with such situations, particularly the appointment of the arbitrators. Thus, parties would be well advised either to refer to arbitration rules that deal with multi-party situations or to provide for a solution in the arbitration agreement.
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