Why arbitrate in Switzerland?
As of 1 June 2021, the Swiss Chambers' Arbitration Institution (SCAI) became a Swiss limited company and was renamed the Swiss Arbitration Centre. It can count on the full support of the Swiss Arbitration Association, its majority shareholder.
This change was accompanied by the entry into force, also on 1 June 2021, of the revised Swiss Rules of International Arbitration. The revised rules apply to arbitration proceedings in which the notice of arbitration was submitted after 1 June 2021. In cases where the notice of arbitration was submitted before this date, the 2012 version of the rules continues to apply unless the parties agree otherwise. Further, arbitration agreements referring to the SCAI or to the Swiss Chambers of Commerce remain valid and binding and are considered to refer to the Swiss Arbitration Centre (article 1(1)).
The revised rules bring a number of improvements and clarifications. The key changes include:
- more active roles for the court and the secretariat:
- if the respondent does not participate in the arbitration or raises a jurisdictional objection, the court must determine whether the arbitration agreements are manifestly incompatible where claims are made under more than one arbitration agreement (article 5(1));
- the parties and arbitral tribunals must copy the secretariat into all communications (article 16);
- the secretariat is solely responsible for administering deposits (appendix B, article 4.1) and notifying awards (article 34(5)); and
- the administrative costs have been increased to take account of the centre's improved services, but the scale of the arbitrators' fees has been reduced slightly, so that the overall costs should remain the same or even decrease;
- improved provisions dealing with multi-contract and multi-party arbitrations – the former article 4 was split into two provisions: article 6 (cross-claim, joinder and intervention) and article 7 (consolidation). Article 6 includes the possibility for the arbitral tribunal to allow for participation in the arbitration proceeding in a capacity other than as an additional party (eg, as amicus curiae) (article 6(4));
- improvements to account for technology developments – paperless arbitrations are encouraged (article 3(1)) and the possibility to hold any hearing remotely by videoconference or other appropriate means is expressly provided for (article 27(2)). Further, the arbitral tribunal shall discuss issues of data protection and cybersecurity during the first case management conference to ensure an appropriate level of compliance and security (article 19(2)); and
- general improvements – the arbitral tribunal may oppose the appointment of a new legal counsel where such appointment would risk jeopardising the impartiality or independence of the arbitral tribunal (article 16(4)). Further, the parties may agree to start mediation or any form of alternative dispute resolution during the arbitration proceedings and to stay such proceedings during that mediation or alternative dispute resolution (article 19(6)).
Switzerland therefore continues to ensure that it remains one of the preferred venues for international arbitration. In general, users have three decisive reasons to arbitrate in Switzerland, which are as follows:
- The arbitration law is simple and efficient, and therefore helpful. Chapter 12 of the Private International Law Act contains 24 short articles available in French, German, Italian and in an unofficial English translation. The articles feature:
- controlling party autonomy;
- some of the broadest arbitrability in the world – any financial interest dispute is arbitrable; and
- predictability – there are limited grounds for annulment of the award.
As of 1 January 2021, the Private International Law Act became even more helpful with its limited revision.
- Switzerland has arbitration-knowledgeable and arbitration-friendly courts, which means parties may benefit from:
- the courts' helpful and prompt assistance when needed; and
- predictable and quick decisions on annulment applications; for instance, one-tier proceedings before the Supreme Court, an approximate six-month duration and the fact that only a few awards have been annulled since the Private International Law Act's inception in 1987.
- The panel of Swiss-arbitration practitioners are learned and experienced counsel and arbitrators contributing to and gaining from the Swiss Arbitration Association's world-class work and services.
For further information on this topic please contact Daniela Franchini or Frank Spoorenberg at Tavernier Tschanz by telephone (+41 22 704 3700) or email ([email protected] or [email protected]). The Tavernier Tschanz website can be accessed at www.taverniertschanz.com.