Switzerland - Chapter III.9 - Practitioner's Handbook On International Arbitration And Mediation - 3rd Edition

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Switzerland
Dr. Paolo Michele Patocchi

Switzerland is one amongst the preferred countries in which to conduct
international arbitration proceedings due to its long-standing tradition of
arbitration and friendly settlement of disputes, its legal system based on a blend
of elements derived from both Roman and Germanic laws, its neutrality and
overall political stability. The country has four official languages: German,
French, Italian and Romansh. Fluency in English is good, especially among
arbitration lawyers. Switzerland has a central geographical position in Europe
and its communication, transport and accommodation facilities are of a high
standard. The sources of the law of arbitration as well as textbooks,
commentaries and law reports on arbitration are available in the English
language. The Swiss culture of arbitration is rooted in comparative law and most
arbitration lawyers have academic and/or working experience from other
jurisdictions — often from a common law jurisdiction. The law of arbitration
gives paramount importance to party autonomy for most procedural issues and,
absent an agreement between the parties, to arbitral discretion. There are no
restrictions based on nationality or other criteria (other than those which may be
agreed upon by the parties) applicable to arbitrators sitting in Switzerland or to
counsel representing a party in an arbitration taking place in Switzerland. The
jurisdiction of the local courts is limited to the extent required to support and
supervise the arbitral process. Remedies to have an arbitral award set aside are
limited, and narrowly construed by Swiss courts. The rules of procedure and
evidence applicable in local court proceedings are not applicable in international
arbitration unless they are chosen by the parties. Geneva and Zurich are the most
important Swiss arbitration centers; other significant centers are Basle, Lausanne
and Lugano. The venue chosen by the parties in institutional arbitration has
limited importance, as the same arbitration rules (the Swiss Rules of
International Arbitration, based on the UNCITRAL Arbitration Rules 1976)
apply in all of the Chambers of Commerce of the cities mentioned above. After
the ICC Rules, the Swiss Rules are the main source of institutional arbitration in
Switzerland. Awards made in Switzerland are recognized and enforced abroad
under the New York Convention 1958, the Geneva Protocol of 1927, as well as
under a number of bilateral treaties with European countries. Foreign awards are
recognized and enforced in Switzerland under the New York Convention.

[1] Multilateral Treaties

[a] Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of June 10, 1958 (“New
York Convention”)

The 1958 New York Convention (“NYC”) is applicable to the
recognition and the enforcement in Switzerland of foreign arbitral
awards. The Convention entered into force in Switzerland on August 30,
1965.2 It applies to the recognition and enforcement of all foreign arbitral
awards, irrespective of whether the country in which the award was made
is a signatory to the Convention.3

Whenever the provisions of two treaties are applicable to the
recognition and enforcement in Switzerland of a foreign arbitral award,
Swiss courts have followed the pro-enforcement bias underlying the New
York Convention and have applied the treaty more favorable to
recognition and enforcement.4

Chapter III.9
Switzerland*
Dr. Paolo Michele Patocchi, LL.M.

SYNOPSIS

§ 9.01 Sources of Swiss Arbitration Law—Swiss Arbitral
Institutions
[1] Multilateral Treaties
[a] Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of June 10, 1958 (“New
York Convention”)
[b] Convention on the Settlement of Investment Disputes
between States and Nationals of Other States of
March 18, 1965 (“ICSID 1965 Convention”)
[c] Other Multilateral Treaties
[2] Bilateral Treaties
[3] Swiss Arbitration Law
[a] The Law of Domestic Arbitration: The New Federal
Code of Civil Procedure
[b] The Law of International Arbitration: The 1987 Act
[4] Institutional Arbitration in Switzerland
[a] Introduction
[b] The Swiss Rules of International Arbitration
[i] Introduction
[ii] Scope of Application
[iii] Institutional Framework and Activities
[iv] Commencement of an Arbitration—
Constitution of the Arbitral Tribunal and
Number of Arbitrators
[v] Challenge
[vi] Place of Arbitration
[vii] Procedure and the Taking of the Evidence
[viii] The Award
[ix] Expedited Procedure
[x] Costs of the Arbitration
[xi] Model Arbitration Clause
[xii] Emergency Arbitrator
[5] Other Arbitral Institutions
[6] The Swiss Arbitration Association (“ASA”)

§ 9.02 The Scope of Application of the Law on International
Arbitration
[1] International Arbitration Governed by the 1987 Act
[2] Opting Out of the 1987 Act: International Arbitration
Governed by the Procedural Provisions of the Federal
Code of Civil Procedure
[3] Opting into the 1987 Act: Domestic Arbitration
Governed by the Procedural Provisions of the 1987 Act

§ 9.03 The Arbitration Agreement
[1] Systems of Law Applicable to the Substance of the
Arbitration Agreement
[2] Requirements of Substance for a Valid Arbitration
Agreement under Swiss Law, Including “Arbitrability”
[3] The Place or “Seat” of the Arbitration
[4] Formal Requirements for a Valid Arbitration Agreement
under Swiss Law
[5] Enforcing Arbitration Agreements: The Arbitration
Agreement Raised as a Defense in Court Proceedings

§ 9.04 Requirements for Counsel Appearing in Arbitration
Proceedings and Court Proceedings Related to Arbitration

§ 9.05 Commencing an Arbitration in Switzerland
[1] Instituting Arbitration Proceedings
[2] Method of Appointing Arbitrators
[a] Choice of an Appointing Authority by the Parties
[b] Absence of an Agreed Appointing Authority
[3] Number of Arbitrators
[4] Language of the Arbitration
[5] Multiparty Arbitration
[6] Filing and Service of the Document Instituting the
Arbitration Proceedings
[7] Lis Pendens
[8] Interim Relief

§ 9.06 Conduct of Arbitrators and Challenge of an Arbitrator
[1] Duty of Independence and Impartiality
[2] Qualification of Arbitrators
[3] Disclosures Required
[4] Ex-parte Communication with Arbitrators
[5] Grounds for Challenge
[6] Challenge Procedure
[7] Review of Decisions on Challenge
[8] Arbitration Proceedings Subsequent to an Application
for a Challenge

§ 9.07 Arbitral Procedure
[1] Introduction: Common Law and Civil Law Systems
[2] Party Autonomy as to Procedure
[3] Absence of Choice by the Parties
[4] The Parties’ Right to Put their Case before an Arbitrator
– Their Right to Equal Treatment
[5] The Taking of the Evidence
[a] Documents
[b] Discovery
[c] Examining Parties and Witnesses
[d] Expert Witnesses
[e] Use of Interpreters and Translators
[f] Site Inspection
[6] The Residual Role of the Swiss Courts at the Place or
“Seat” of the Arbitration

§ 9.08 The Award
[1] Partial Awards
[a] On Jurisdiction
[b] On the Merits
[2] Final Awards on the Merits
[a] Applicable Law; System of Conflicts Law Applicable
before an Arbitral Tribunal
[i] Agreed Proper Law
[ii] Absent a Choice of Law by the Parties
[iii] Non-Contractual Issues
[iv] International Legal Standards
[v] Equity Clauses (Awards ex aequo et bono)
[b] The Making of the Award

§ 9.09 Setting Aside Proceedings and Revocation Proceedings
against an Arbitral Award Made in Switzerland
[1] Grounds upon Which an Award May Be Set Aside
[2] Procedure
[3] Effects of a Decision Setting Aside an Award
[4] Exclusion Agreements
[5] Revocation of Awards (révision, Revision)

§ 9.10 Enforcement of Foreign Arbitral Awards in Switzerland
[1] Scope of Application of the New York Convention
[2] Interpretation and Construction of the New York
Convention
[3] Requirements for Recognition and Enforcement
(Art. IV NYC)
[4] Grounds on Which Recognition and Enforcement May
be Denied (Art. V NYC)
[a] Introduction
[b] Incapacity (Art. V(1)(a) NYC)
[c] Invalidity of the Arbitration Agreement
(Art. V(1)(a) NYC)
[d] Proper Notice of the Arbitrator’s Appointment and
of the Arbitration – Parties’ Right to Present their
Case (Art. V(1)(b) NYC)
[i] Parties’ Right to Present their Case
[ii] Proper Notice
[e] Award Ultra Petita (Art. V(1)(c) NYC)
[f] Arbitral Tribunal Improperly Constituted
(Art. V(1)(d) NYC)
[g] Improper Arbitral Procedure (Art. V(1)(d) NYC)
[h] Award Not Yet Binding, Award Set Aside or
Suspended by a Competent Authority
(Art. V(1)(e) NYC)
[i] Subject Matter of the Dispute Not Capable of
Settlement by Arbitration (Art. V(2)(a) NYC)
[j] International Public Policy of Switzerland
(Art. V(2)(b) NYC)
Bibliography on Arbitration in Switzerland in the English Language
Annex A – Swiss Federal Private International Law Act: Chapter
Twelve
Annex B – Swiss Federal Code of Civil Procedure: Part 3
Annex C – Table of Translated Cases

Paolo Michele Patocchi is Partner and Head of Arbitration at Lenz & Staehelin in Geneva. He has served as counsel or arbitrator in international arbitrations in Switzerland (and a number of other West and East-European venues). Mr. Patocchi is a Member of the Committee of the Swiss Arbitration Association (ASA); Member of the Arbitration Committee of the Geneva Chamber of Commerce and Industry; Member of the Committee of the Lugano Chamber of Commerce and Industry; and Lecturer at the University of Geneva, Law School.