In its landmark decision DFT 141 III 229 dated 29 May 2015 - also known as the "US law firm decision" -‚ the Swiss Federal Tribunal confirmed its previously established doctrine on the controlled transfer of a foreign award's effects ("Kontrollierte Wirkungsübernahme") for the determination of the objective scope of res judicata of a foreign arbitral award. The concept implies, amongst other things, that the binding effect of a foreign award being recognised in Switzerland cannot go beyond the determinations contained in its operative (or dispositive) part.

Such narrow approach to res judicata has been criticised by various authors. The concept is considered inappropriate in the context of international arbitration by some scholars because arbitrating parties ordinarily wish to have their disputes resolved in a comprehensive manner. Given the lack of any pertinent and authoritative transnational principles, it is further argued that arbitral tribunals should be vested with the power to discretionarily determine the scope of res judicata of a previous award. In doing so, arbitral tribunals are expected to notably take into account the legal traditions and the parties' expectations involved in a specific arbitration.

Yet, an arbitral tribunal's entitlement to discretionarily determine the objective scope of res judicata of a previous award is likely to conflict with both the provisions of the Swiss lex arbitri and the parties' need for legal certainty. In addition, such discretionary power of arbitral tribunals may not sufficiently accommodate the parties' potential interest in having certain aspects of a dispute omitted from a final adjudication. The legitimate concern of settling disputes in a comprehensive manner should therefore be addressed by enabling the arbitrating parties to flexibly decide what aspects of a dispute they wish to submit to a final adjudication, and at what point in time. The respective intentions of the parties should be communicated to the arbitral tribunal by filing or abstaining from filing corresponding applications for prejudicial declaratory relief.

The author's entire article on the topic can be found in the ASA Bulletin 2/2017 at pages 319 to 333.