A Q&A guide to arbitration law and practice in Switzerland.
The country-specific Q&A guide provides a structured overview of the key practical issues concerning arbitration in this jurisdiction, including any mandatory provisions and default rules applicable under local law, confidentiality, local courts' willingness to assist arbitration, enforcement of awards and the available remedies, both final and interim.
To compare answers across multiple jurisdictions visit the Arbitration procedures and practice Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to arbitration. For a full list of jurisdictional Q&As visit www.practicallaw.com/arbitration-mjg.
Switzerland is an established venue for international and domestic commercial arbitration. In 1989, the Swiss Parliament adopted a lex arbitri that has received international praise and acceptance for its simplicity, flexibility and pragmatism. This legal framework, combined with Switzerland's outstanding business infrastructure, geographic location, the high professional standards of the Swiss legal profession and the nation's historical neutrality, make Switzerland one of the preferred centres for international arbitration. The jurisprudence of the Federal Supreme Court (Supreme Court), Switzerland's highest court, also confirms the pro-arbitration philosophy. This chapter relates to Swiss law and practice regulating international arbitrations only.
Over the last few years, Switzerland has experienced a real arbitration boom. This is partly due to the popularity of the Swiss Rules of International Arbitration (Swiss Rules). The Swiss Rules were revised in 2011 with the aim of reflecting practical developments. The new rules will enter into force on 1 June 2012. Among other things, they introduce provisions on emergency relief before constitution of the arbitral tribunal, provide for the possibility of ex parte relief, and under certain limited circumstances newly provide for the prima facie examination of jurisdiction by the Swiss Chambers' Court of Arbitration and Mediation (Chambers), which administers the rules.
In recent years, there has been a significant growth in caseload at the Court of Arbitration for Sports (CAS). This increase has been reflected in a growing number of decisions by the Swiss Supreme Court on applications to set aside or revise awards rendered by CAS arbitral tribunals. In 2011, the majority of petitions filed against international arbitral awards before the Supreme Court arose from CAS awards. The CAS-related jurisprudence of the Supreme Court is important in driving the development of the law of international arbitration in Switzerland, most recently, for example, on issues of arbitrator impartiality, the validity of arbitration agreements, and the standard applicable to the revision of arbitral awards based on the discovery of new facts. In examining the formal requirements of arbitration agreements, the Supreme Court has recently exhibited a greater liberality in sports arbitration than in commercial arbitration.
Switzerland remains a very popular seat for International Chamber of Commerce (ICC) arbitrations. According to the ICC's statistical report for 2010 (ICC Bulletin Volume 22, No. 1, 2011), Switzerland is the second most frequently chosen seat for ICC arbitrations. While not particular to Switzerland, Swiss arbitration will be affected by the revised ICC Rules of Arbitration, which entered into force on 1 January 2012.
International arbitration in Switzerland has several advantages over state court litigation, including:
Speed and efficiency of the dispute resolution.
Ability to conduct the proceedings in English (litigation before state courts must be conducted in one of Switzerland's official languages (in German, French, or Italian)).
It is easier to enforce a Swiss arbitral award than a Swiss court judgment outside Switzerland, as Switzerland is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).
In addition, unlike in court litigation, an international arbitral award can only be "appealed" (on very limited grounds) to one court instance, the Supreme Court.
The Chambers has emerged as an important institution of commercial dispute resolution. It consists of the chambers of commerce and industry of Zurich, Geneva, Bern, Basel, Vaud, Ticino and Neuchatel. The Chambers administer the Swiss Rules.
The Court of Arbitration for Sport (CAS), based in Lausanne, is the most important global institution devoted to resolving disputes directly or indirectly related to sport.
The World Intellectual Property Organisation (WIPO), seated in Geneva, offers dispute resolution services through its arbitration and mediation centre, particularly relating to intellectual property (IP) and internet domain name disputes.
Arbitration proceedings are frequently conducted under the rules of international arbitration institutions, particularly the ICC, which administered 86 arbitrations seated in Switzerland in 2010. Other arbitral institutions used include the London Court of International Arbitration (LCIA), the Stockholm Chamber of Commerce, and others.
In addition, certain international chambers of commerce provide their own arbitration rules and services in Switzerland, including the Swiss-American and the German-Swiss Chambers of Commerce. There are also private organisations dedicated to mediation, including the:
Swiss Chamber of Commercial Mediation.
Swiss Mediation Association.
Swiss Lawyers Association.
Since 2007, the Chambers also offer mediation services based on the Swiss Rules of Commercial Mediation.
International arbitration in Switzerland is regulated by Chapter 12 of the Private International Law Act 1989 (PILA). The provisions apply to any arbitration if both:
The seat of the arbitral tribunal is in Switzerland.
At least one of the parties to the arbitration had its domicile or habitual residence outside of Switzerland at the time when the arbitration agreement was entered into.
Chapter 12 of the PILA is not based on the UNICTRAL Model Law. It is however a modern and pro-arbitration law and several provisions reflect the Model Law.
As of 1 January 2011, domestic arbitration is regulated by the new Civil Code of Procedure (CCP). The new law significantly modernises the framework for domestic arbitrations.
The following PILA provisions are generally considered mandatory:
Article 177(1). This relates to the objective arbitrability of the dispute. Any dispute involving an economic interest can be arbitrated. This broad definition includes all kinds of monetary interests connected to contractual, quasi-contractual, commercial, civil, administrative, and public law matters, whether they arise under domestic, foreign, or international law. Matters involving personal and family status (marriage, adoption, separation or divorce) are considered non-arbitrable.
Article 177(2). This relates to subjective arbitrability of a state or a state-controlled enterprise or organisation. States and state-controlled organisations and enterprises cannot invoke their own laws to contest their capacity to arbitrate. Parties, whether natural or legal persons, must have capacity to enter into an arbitration agreement under the law determined by the applicable PILA conflict of laws rules.
Article 178(1). The provision regulating the form of an arbitration agreement (see Question 6, Substantive/formal requirements).
Article 180(1)(c). This provision deals with challenges to arbitrators for lack of independence (see Question 10).
Article 180(2). This restricts challenges to a party-appointed arbitrator to grounds the challenging party became aware of after the appointment.
Article 181. This regulates pending actions (lis pendens).
Article 182(3). This requires equal treatment of the parties and provides for the parties' right to be heard in adversarial proceedings.
Article 185. This provides for state court assistance.
Article 190(2). This lists grounds for setting aside an arbitral award, subject to waiver under Article 192.
Limitation periods are a matter of substantive law. Therefore, Swiss periods of limitation may or may not be applicable depending on the applicable substantive law. If Swiss substantive law applies, different claims can be subject to different limitation periods. These periods apply irrespective of whether the claims are brought in state court or in arbitration.
Unless provided otherwise, the default limitation period for all claims is ten years. Other important limitation periods include:
Five years for certain claims for "periodic performances" and special performances such as, for example, lawyers' professional work.
Two years for claims arising out of an insurance contract.
One year for tort and unjust enrichment claims (from the date when the damaged person has received knowledge of the claim, but in any event no later than ten years from the date when the act causing the damage took place or when the claim arose).
Limitation periods can be interrupted by filing a claim with a court or an arbitral tribunal (Article 135(2), Code of Obligations (CO)). Filing a claim requires that the claim sufficiently specify the object of the dispute, including the amount for monetary claims.
If the parties have named the arbitrator(s) in the arbitration agreement, the arbitration proceedings are pending once a party files with the arbitrator(s) a statement of claim. The statement must specify the claims the party intends to submit, but need not be a detailed pleading. If the arbitration agreement does not name the arbitrator(s), as in most cases, the arbitration proceedings are pending once a party institutes proceedings for the constitution of the arbitral tribunal.
A more detailed filing may be required to create pendency in the context of limitation periods contained in the CO than the filing required in the context of the PILA (Article 181).
Arbitration agreements must meet formal and substantive requirements. Further, the subject matter of the dispute must be objectively arbitrable, and the parties must have subjective arbitrability.
An arbitration agreement must be made in writing, by telegram, telex, telecopier or any other means of communication which allows it to be evidenced through text (Article 178(1), PILA). Neither a signature nor an exchange of documents is required.
An arbitration agreement must:
Conform to one of the following laws (Article 178(2), PILA):
the law chosen by the parties;
the law governing the subject matter of the dispute;
Swiss law.
Reflect the parties' agreement to submit their dispute to arbitration.
Specify the object of the dispute or the legal relationship forming the subject matter of the arbitration.
Swiss law reflects the principle of favor validitatis.
Further elements that are important, but the absence of which does not necessarily invalidate the arbitration agreement, include:
The seat of the arbitral tribunal.
The number of arbitrators.
The procedure for the arbitrators' appointment.
If Swiss law applies to the substantive validity of the arbitration agreement, the CO regulates the majority of related legal issues, including the conclusion, interpretation and content of the arbitration agreement, conditions to and performance of arbitration, and the extinction or termination of the obligation to arbitrate.
No separate arbitration agreement is required and an arbitration clause in the main contract is sufficient. While partly a matter of nomenclature, an arbitration clause typically submits future disputes to arbitration, whereas an arbitration agreement generally deals with existing disputes after they have arisen.
Switzerland recognises the principle of separability (Article 178(3), PILA).
An arbitration agreement and the resulting award is only generally binding on the parties (and their legal successors) who are parties to the arbitration agreement. The PILA does not explicitly provide for intervention by, or joinder of, third parties to an arbitration agreement. Therefore, unless the parties have chosen institutional rules that allow for the joinder of third parties (see, for example, Article 4(2) of the Swiss Rules), third parties cannot:
Be bound by an arbitration agreement.
Intervene in the arbitration.
Be joined to an ongoing arbitration.
However, the current Supreme Court's practice shows that non-signatory third parties can be joined to and bound by an arbitration agreement if this extension can be deemed to reflect the parties' real intentions under the applicable principle of good faith. This may be the case if a non-signatory third party participated in the performance of the contract that contains the arbitration agreement, thereby showing that the third party was willing to be bound by the arbitration agreement contained in the contract. The same principle applies to groups of companies or state-controlled companies.
Under Swiss law, and subject to contrary agreement, an arbitration clause generally binds the transferee on a transfer of a contractual obligation or the assumption of a debt as an accessory clause.
An arbitration agreement may also designate a third party as a beneficiary of the agreement. The third party is then not bound by the agreement but can invoke it.
The parties are free to agree the constitution of the arbitral tribunal, including through referral to institutional or ad hoc arbitration rules (Article 179, PILA). Incorporating institutional rules is common. The only statutory restriction on the qualifications of arbitrators is that they must be independent and impartial. In addition, legal commentary and the practice of the Federal Supreme Court recognise that only natural persons can be appointed as arbitrators.
A party can challenge an arbitrator or petition to set aside an arbitral award for a violation of the right to equal treatment if one party disproportionately influences the constitution of the arbitral tribunal (Article 180(1)(c), PILA).
The Federal Constitution (Constitution) guarantees that all legal disputes are judged by an independent and impartial state court, which is a right derived from the constitutional right to a fair hearing. The Supreme Court has held that these constitutional provisions also apply to arbitral tribunals. In addition, the Supreme Court has cited with approval the International Bar Association (IBA) Guidelines on Conflicts of Interest.
An arbitrator can be challenged if circumstances exist that give rise to justifiable doubts as to his or her independence (Article 180(1)(c), PILA). Unlike the new CCP, the PILA does not expressly provide for a requirement of impartiality. However, the Supreme Court confirmed in 2010 that Swiss arbitral tribunals must observe the requirements of impartiality under the Constitution. Moreover, the same standards apply to party-appointed arbitrators as to the chairperson of the arbitral tribunal.
There is no express duty to disclose to the parties and co-arbitrators circumstances that may give rise to justifiable doubts as to the arbitrator's independence or impartiality. However, this duty is generally considered an implied obligation under the arbitrator's appointment contract, and disclosure is a common practice among Swiss arbitrators. At the same time, arbitration parties are subject to a duty of curiosity, requiring them to conduct conflict checks on the parties and to investigate links between parties and arbitrators immediately after nomination.
If a party only learns of an arbitrator's alleged lack of independence after the time for challenging arbitrators has passed, the party can file a petition to set aside the arbitral award under Article 190(2)(a) of the PILA. Successfully challenging an arbitrator based on the lack of independence is difficult. In particular, a party cannot base a challenge of an arbitrator on any fact or event that is in the public domain, and therefore could have been discovered and raised at the time of the arbitrator's appointment.
Arbitrators are appointed, removed or replaced in accordance with the agreement of the parties (Article 179(1), PILA). If the parties have not agreed these matters, they can invoke the state courts' assistance (Article 179(2), PILA). The state courts apply provisions of Swiss cantonal law in relation to appointment, removal or replacement of arbitrators.
Article 179(2) can apply in a number of scenarios including, for example, if:
One party to an ad hoc arbitration refuses to appoint an arbitrator.
The party-appointed co-arbitrators cannot agree on the chairman.
The private arbitral institution selected by the parties refuses to make an appointment or no longer exists.
See Question 5, Arbitration proceedings. If the parties have named the arbitrator(s) in the arbitration agreement, the arbitration proceedings are pending once a party files a statement of claim with the arbitrator(s) (Article 181, PILA). The statement must specify the claims the party intends to submit, but need not be a detailed pleading. If the arbitration agreement does not name the arbitrator(s), arbitration proceedings are generally pending once a party institutes proceedings for the constitution of the arbitral tribunal.
The principle of party autonomy in arbitration extends to questions of procedure. The parties can, directly or by reference to arbitration rules (Article 182(1), PILA):
Determine the arbitral procedure.
Submit arbitral proceedings to a procedural law of their choice.
In the absence of the parties' agreement, the arbitral tribunal must determine the procedure to the extent necessary.
Very few of the Swiss lex arbitri relating to procedure are mandatory (for a complete list of mandatory statutory provisions, see Question 4).
Arbitral tribunals conduct the taking of evidence (Article 184(1), PILA). Swiss arbitral tribunals commonly rely on the IBA Rules on the Taking of Evidence (IBA Rules) and it is, therefore, generally recognised that an arbitral tribunal can both:
Request the submission of documents by one party.
Order the appearance of witnesses.
Arbitral tribunals do not have coercive powers. However, for arbitrations seated in Switzerland an arbitral tribunal, or a party with the tribunal's consent, can request the state court's assistance with the taking of evidence. The court will apply the CCP.
Similar to other procedural matters, the rules of disclosure are subject to the parties' agreement. International arbitral tribunals in Switzerland do not follow any standard form of evidentiary proceedings, but tend to use different approaches, depending on the:
Nature of the dispute.
Familiarity of the parties and their representatives with procedural issues.
The composition of the tribunal.
Swiss arbitral tribunals tend to apply the IBA Rules, customising them for a specific case if necessary. Disclosure is generally rather restrictive, and the arbitral tribunal does not allow "fishing expeditions". Document production will be limited to documents that both:
Are identified with reasonable clarity.
Can be shown to be relevant and material to the outcome of the case.
However, disclosure in arbitration is generally broader than in state court litigation, as the local courts allow practically no document disclosure at all.
Parties can determine the rules on disclosure.
The PILA is silent on confidentiality in arbitration. The parties can refer to certain institutional rules that provide for confidentiality (for example, Article 43 of the Swiss Rules). However, even without this reference, it is part of Swiss legal doctrine that arbitrators must maintain confidentiality. This duty is implied under the arbitrators' appointment contract.
It is uncertain whether other parties to the arbitration, such as the parties, witnesses, and experts, must maintain confidentiality.
The state court at the Swiss seat of the arbitral tribunal can be called to assist the arbitral proceedings with the following:
Interim relief. Before the constitution of an arbitral tribunal, the state courts have exclusive authority to order interim relief. Unless the parties have agreed otherwise, following the constitution of an arbitral tribunal a party can request interim relief from either the arbitral tribunal or directly from the competent state court.
Enforcement. The arbitral tribunal can request the state court's assistance for enforcement if a party does not voluntarily comply with provisional or conservatory measures ordered by the tribunal (Article 183(2), PILA). The enforcement judge cannot examine the substance of the order, except its public policy aspects, provided both:
a prima facie examination shows that a valid arbitration agreement exists;
the arbitral tribunal was validly constituted.
Taking of evidence. The arbitral tribunal, or a party with the arbitral tribunal's consent, can request the state court's assistance in the taking of evidence. The state court cannot make an independent determination of the practicality, relevance or suitability of the evidentiary measure requested. The state court applies the CCP and the coercive measures available under it. These may include fines or compulsion to require the testimony of third party witnesses. If evidence is sought abroad, a request to the cantonal court is the first step in obtaining international judicial assistance from a foreign court, under the HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 (Hague Evidence Convention).
In addition, the state judge at the arbitral tribunal's seat has jurisdiction to provide any further assistance, on request of the parties to the arbitration or the arbitral tribunal (Article 185, PILA). This provision may be used to request the court to assist, for example, with:
Acceleration of the arbitration.
Extension of the term of office of the arbitral tribunal agreed by the parties.
Decisions relating to the repetition of proceedings following the replacement of an arbitrator.
Swiss state courts have a long record of pro-arbitration jurisprudence. There is no known precedent of Swiss state courts intervening on their own will or motion (sua sponte) to frustrate arbitration proceedings.
The grounds for state court assistance are limited (see Questions 11 and 17), and state courts do not support or tolerate the parties' attempts to delay or frustrate international arbitrations.
Switzerland recognises the principle of lis pendens, and Swiss procedural law requires a state court referred to after the constitution of the arbitral tribunal to stay its proceedings until the arbitral tribunal has decided on its jurisdiction.
A Swiss court, on a party's request, must decline jurisdiction over an arbitrable dispute arising out of an agreement that contains an arbitration clause, unless the court determines that (Article 7, PILA) (negative kompetenz-kompetenz (competence-competence)):
The respondent has proceeded with its defence on the merits without raising any objection.
The arbitration agreement is null and void, ineffective or incapable of being performed (see below).
The arbitral tribunal cannot be constituted for reasons manifestly attributable to the respondent.
The examination of the validity of the arbitration agreement differs depending on the location of the arbitral tribunal's seat. If the seat is in Switzerland, the Swiss court only undertakes a prima facie examination. If the seat is outside Switzerland, a Swiss court engages in a full review of the validity of the arbitration agreement under Article II(3) of the New York Convention.
If a party initiates arbitration proceedings in breach of a valid jurisdiction clause, the arbitral tribunal, in the first instance, decides whether it has jurisdiction to conduct arbitration (positive kompetenz-kompetenz).
To date, Swiss state courts have not issued an anti-suit injunction in aid of arbitration proceedings. While the majority of legal commentators consider that Swiss state courts do not have this power, recent commentary suggests a more open approach that would grant state courts this competence.
Switzerland recognises the principle of kompetenz-kompetenz (Article 186(1), PILA) (see Question 19). Therefore, it is for the arbitral tribunal to determine its competence in the first place. The arbitral tribunal generally decides on its jurisdiction by preliminary award (Article 186(3), PILA).
An arbitral tribunal seated in Switzerland can award security for costs. However, many Swiss commentators think that security for costs is only justified in exceptional situations, for example, if one party is bankrupt or if one party's financial situation between the conclusion of the arbitration agreement and the beginning of the arbitration proceedings has significantly and unforeseeably changed.
An arbitral tribunal can order a variety of interim measures, including measures aimed at:
The preservation of evidence.
Regulating and stabilising the relationship between the parties during the arbitration proceedings.
Securing the enforcement of the final award (for example, an order to deposit the goods in dispute or an order to a party to desist from modifying, or disposing of, the object of a proprietary claim).
Arbitral tribunals can generally order interim measures that would not be available to a Swiss state court.
In May 2010, the Supreme Court provided additional guidance in this area:
A petition to set aside an arbitral award under Article 190 PILA is not admissible against an interim measure within the meaning of Article 183 PILA.
When deciding whether a particular measure is an interim measure within the meaning of Article 183 PILA, the Supreme Court applies a strict "substance over form" principle. The name given to a decision by an arbitral tribunal is irrelevant for these purposes.
When defining the term "provisional and conservatory measure" in Article 183 PILA, the Supreme Court applies the same principles and categorisation as in Swiss civil procedure.
An arbitral tribunal seated in Switzerland can grant interim measures ordering interim performance of an obligation, including interim payment, even though Swiss civil procedure is still somewhat reluctant to allow these measures without an express legal provision.
Arbitrators must decide the dispute according to either:
The law chosen by the parties.
Without such a choice, the law with which the case has the closest connection.
The law applicable to the merits of the case determines the available final remedies. Under Swiss substantive law the remedies available are, broadly, orders to:
Pay an amount.
Restitute property.
Act in a certain way or to cease to act.
Interest is considered an issue of the applicable substantive law. If Swiss law applies to the merits of the case, and unless the parties have agreed otherwise, the arbitral tribunal awards the statutory interest of 5% provided by the CO.
The awarded remedies must not violate Swiss public policy. An award's incompatibility with public policy is grounds for setting aside the award. Depending on the particular circumstances of the case, treble and punitive damages may violate Swiss public policy.
In Switzerland, an international arbitral award can be set aside by filing a petition to the Supreme Court.
The grounds for setting aside an arbitral award are very limited and are applied restrictively. Petitions to set aside arbitral awards are generally unsuccessful.
The grounds for setting aside principally relate to the violation of fundamental procedural rights. The arbitrators' findings on the merits generally cannot be challenged, unless they violate public policy.
The only grounds for setting aside an international arbitral award are (Article 190(2), PILA):
Improper appointment of arbitrators.
Lack of the tribunal's jurisdiction.
Infra petita decision (that is, the tribunal did not answer all questions presented to it) or extra petita decision (that is, the tribunal ruled beyond issues presented to it).
Violation of the right to equal treatment or the right to be heard.
Incompatibility with public policy.
Petitions to set aside must be filed within 30 days of the notification of the decision to the parties. Recent statistics show that these appeals are generally resolved in less than five months.
In exceptional circumstances, an international arbitral award can be lifted by filing a petition for revision. While Swiss statutory law does not provide for revisions of international arbitral awards, the Supreme Court applies the rules relating to revision of Swiss state court judgments to international arbitral awards. A petition for revision can be brought on two grounds:
If the petitioner has discovered new relevant facts or new decisive evidence that existed at the time the award was rendered, provided it was unknown to the petitioner acting with sufficient diligence during the proceedings (revisio propter nova). The petitioner must show that the previously unknown facts relate to events that occurred before the date of the award. The newly discovered facts and evidence must be relevant to the outcome of the case and not merely influence an argument supporting the decision.
If criminal proceedings establish that the decision was influenced to the detriment of the losing party by a felony or a crime (a conviction is not necessary) (revisio propter falsa). The crime or offence must have had a causal effect on the decision as such, and not just on the considerations and reasoning of the arbitrators.
A petition for revision must be filed within 90 days after discovering the ground(s) for revision. There is an absolute ten-year bar to petitions revisio propter nova, but not for petitions revisio propter falsa.
If none of the parties have their domicile, their habitual residence, or a business establishment in Switzerland, they can, by an express statement in the arbitration agreement or by a subsequent written agreement, either (Article 192(1), PILA):
Fully waive a petition to set aside an arbitral award.
Limit it to one of the grounds listed (see above, Grounds and procedure).
The waiver must be explicit. A statement that the award is final and binding is not sufficient, nor is a reference to institutional rules providing for a waiver of legal remedies. An effective waiver prevents the parties from bringing a petition under Article 190(2) of the PILA (or the respective grounds under it, in case of a partial waiver), but the award remains subject to review during enforcement under the New York Convention (see Question 19).
There are no specific rules relating to legal fees in international arbitration. Hourly rates and flat fees are generally permissible, and subject to negotiation between attorneys and clients.
Attorneys admitted to the Swiss bar are subject to the Rules of Professional Conduct, which prohibit contingency fee arrangements (Article 19). However, an attorney can receive a success mark-up payment, provided the attorney's regular fee covers at least his own costs plus a minimal profit. Foreign attorneys representing parties in international arbitration proceedings in Switzerland are not subject to the Swiss bar rules.
The mechanism for allocating the opposing side's fees and costs is subject to the parties' agreement, either directly or by reference to a set of institutional rules. In the absence of the parties' agreement and specific institutional rules, Swiss arbitral tribunals are influenced by the rules and practices regulating litigation in Switzerland, under which the unsuccessful party bears the tribunal's fees and expenses and pays the opposing side's reasonable fees and costs. If a party prevails only in part, the fees and expenses are usually allocated proportionally between the parties.
In calculating costs, international arbitral tribunals sitting in Switzerland will generally refer to the parties' separate costs submissions.
Even if not required by institutional rules, arbitral tribunals will generally apply a "reasonableness" standard. In applying that standard, tribunals will consider, among other things, the amount in dispute, the complexity of the dispute and the proceedings, as well as the level of the opposing party's costs. There is a growing understanding that in determining and allocating costs, the arbitral tribunal can take into account any relevant behaviour by a party such as:
Dilatory tactics.
Failure to comply with the arbitral tribunal's orders.
Failure to comply with the procedural timetable.
International arbitral awards rendered in Switzerland are enforceable by operation of law. There is no additional exequatur required and Swiss arbitral awards are enforced under the same rules as Swiss state court decisions.
An arbitral award ordering the payment of a sum of money is enforced under the Swiss Debt Enforcement Act of 1889, as amended. The creditor files a request for collection at the debt collection office, normally at the debtor's domicile. The debt collection office then issues a payment order and serves it on the debtor. If the debtor does not object to the payment order, the enforcement can generally proceed immediately. If an objection is filed, it can be set aside by the creditor in summary proceedings. Considering the binding nature of the arbitral award, the debtor can only raise limited objections in these summary proceedings.
Non-monetary awards are enforced under the CCP. The CCP provides for summary proceedings similar to those applicable to the enforcement of monetary awards (see above, Monetary awards).
Switzerland is a member state to the New York Convention. International arbitral awards rendered in Switzerland have a long record of successful recognition and enforcement in other member states of the New York Convention.
Foreign arbitral awards are recognised and enforced in Switzerland under the New York Convention, irrespective of whether or not the award was rendered in a jurisdiction which is a member state of the New York Convention (Article 194, PILA). Enforcement proceedings are similar to those for arbitral awards made in Switzerland (see Question 27), except that if the debtor objects to the payment order, the local state court must determine whether the prerequisites of the New York Convention are satisfied. If the state court concludes that they are, the debtor can appeal within the court system of the canton in which enforcement proceedings are pending. A final appeal can only be filed with the Supreme Court.
Enforcement proceedings before Swiss state courts are subject to the CCP, which provides for summary proceedings. The CCP generally provides for only one exchange of written briefs, and the court has power to waive an oral hearing.
The duration of proceedings depends on a number of factors, including the complexity of the matter, but generally, enforcement proceedings take about six months.
In March 2008, a parliamentary initiative was introduced aiming to revise Article 7 of the PILA. While this proposal is still pending in parliament, the question has been raised in the Swiss arbitration community whether the PILA in general may warrant (gentle) updating. Although no concrete legislative proposals have been launched, this is a potential development to watch out for. In any event, no fundamental changes are expected from a reform.
Main activites. The Chambers offers international arbitration services including administration of the Swiss Rules of International Arbitration. It also offers mediation services, including administration of the Swiss Rules of Commercial Mediation.
Main activites. The CAS offers dispute resolution services for sports-related disputes.
Main activities. The WIPO offers dispute resolution services relating to IP disputes.
Main activities. ASA is a non-profit association with over 1,000 individual members, practitioners and academics engaged and/or interested in domestic and international arbitration. ASA contributes to the development of arbitration law and practice. ASA does not itself serve as an institution hosting or administering arbitral proceedings.
T +41 44 215 5280
F +41 44 215 5200
E nathalie.voser@swlegal.ch
W www.swlegal.ch
Qualified. Switzerland, 1990
Areas of practice. Dispute resolution; litigation; international arbitration.
Recent transactions
T +41 44 215 3429
F +41 44 215 5200
E james.menz@swlegal.ch
W www.swlegal.ch
Qualified. New York, US, 2006
Areas of practice. Dispute resolution; litigation; international arbitration.
Recent transactions
