"US Spotlight" blog series: demystifying Swiss arbitration for the US litigator (Volume 9 of 10)
This blog series provides the US litigator with a practical understanding of Swiss arbitration. It compares a Swiss arbitral proceeding under the Swiss Rules of International Arbitration ("Swiss Rules"), though other rules, e.g., the International Chamber of Commerce ("ICC") Rules, are often used, with a dispute in US Federal District Court ("USDC").
Examination of witnesses
After opening statements, the hearing will generally proceed with the examination of claimant's witnesses followed by respondents' witnesses, though this order is not absolute. If any witness who submitted a witness statement, and whom the counterparty has requested to cross-examine, does not appear, his witness statement will be given no probative value.
Witnesses are not required to take an oath but are notified that they can face up to five years in prison for perjury, which ensures reliable testimony. Arts. 307 and 309 Swiss Penal Code.
Tribunals are flexible as to the form of taking hearing testimony, including doing so by videoconference or even Skype. Art. 25(4) Swiss Rules.
The tribunal is in control of the examination throughout the proceedings and may, at any time, ask questions on its own initiative, limit the questioning, rule that a witness need not respond to counsel's question, e.g., irrelevant, calls for speculation etc. Art. 25(4) Swiss Rules. While the tribunal has the right to ask its own questions, it tends to reserve these until redirect is completed, allowing counsel to dictate the topics and pace of examination. This is partly due to deference to the time allotments, which, by comparison to the US, are strictly adhered to. US counsel accustomed to USDC proceedings should be careful not to take too much liberty with a tribunal's suggestion that it will be "flexible" about time; "flexibility" in this regard means minutes, not hours or significant portions thereof. The tribunal may of course be forced to interject during a witness examination to rule on an objection or sua sponte insist that a counsel's line of questioning is inappropriate. In such instances, the time taken by the tribunal is added back to the party's allotted time.
The flexibility built into the procedural rules allows for examining two or more witness's simultaneously, known as taking concurrent evidence from, or "hot-tubbing," both parties' expert witnesses, as is often done in Australian courts. Art. 25(4) Swiss Rules. While tribunals are not quick to institute this practice, US counsel should be aware of the possibility. There is no analog in America.
Direct examination of a parties' witness serves as a warm-up exercise, to confirm the accuracy of the witness statement, and correct or clarify any errors in the statement. Counsel should use caution in attempting to introduce new points or facts through direct examination as the tribunal will unlikely grant much latitude in this regard.
Cross-examination is used to evaluate the accuracy of the counterparty's witness statements. All of the best practices that apply in US litigation regarding cross-examination, e.g., do not try to make an affirmative case through the other party's witness, never ask a question you do not know the answer to, do not ask one question too many, apply. While there will not be prior testimony to confront the witness with on cross-examination, any documents introduced in the proceedings can be used to undermine the credibility of the witness.
The pervasive deposition practice in the US, coupled with the absence of depositions in Swiss litigation and arbitration, and fact that cross-examination is often waived at the Swiss arbitral hearing stage, means that US counsel is likely to have more experience cross-examining witnesses than Swiss counsel. Should the hearing team include US counsel, that experience should be harnessed.
Closing statement/post-hearing brief
Like the opening statement, the closing statement is less theatrical than what would be given in USDC, particularly before juries. Essentially, a summary of the party's case, plus a review of the facts that were marshalled through the hearing testimony. A copy of the notes relied on by counsel to perform the closing statement may be turned over to the tribunal.
The post-hearing brief is a more persuasive tool than the closing statement, and any party with a strong case should insist on submitting a post-hearing brief, though there is the benefit of a lower budget with closing statements.
The tribunal may order strict page limits on the post-hearing brief, convey a series of its own questions as a prompt, or leave the content and structure entirely to the parties. Post-hearing briefs are not tied to any specific procedural rule, compare, e.g., FRCP 50 judgment as a matter of law.
The most persuasive post-hearing briefs lay out the arguments that both parties presented in their respective substantive pleadings and line those arguments up with what the hearing testimony did, or did not, prove. The post-hearing brief is not time for the parties to repeat any of their arguments, the tribunal by now has read and heard them several times, but focus on the facts, particularly facts established for the first time at the hearing. To the extent that a party can make its post-hearing brief as comprehensive as possible, it should strive to do so. It will be the final word.