Stefanie PfistererDr. iur., Attorney at Law, LL.M.

Anton K. SchnyderDr. iur., LL.M. Professor at the University of Zurich

International Arbitration in Switzerland

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Contents

Preface III

Summary of Contents V

List of Abbreviations XIX

Bibliography XXIII

Chapter 1: Introduction 1

§ 1 Definition 11. Definition 12. Other Forms of Private Dispute Resolution 1

a) Alternative Dispute Resolution 1b) Expert Determination 2

§ 2 Character of Arbitral Proceedings and Reasons for the Conclusion of Arbitration Agreements 2

§ 3 Types of Arbitration 41. Swiss and Foreign Arbitration 42. International and Domestic Arbitration 43. Ad hoc and Institutional Arbitration 5

a) General Remarks 5b) Ad hoc Arbitration 5c) Institutional Arbitration 5

4. Commercial and Investment Arbitration, Jurisdiction of Associations 8a) Commercial Arbitration 8b) Investment Arbitration 8c) Arbitration in Associations 8

§ 4 Sources of International Arbitration in Switzerland 91. General Remarks 92. Treaties 10

a) General Remarks 10b) New York Convention of 1958 10c) ICSID Convention of 1965 10

3. National Law: Chapter 12 of the PILS 11

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a) Characteristics 11b) Scope of Application 12

4. Non-National Law: Arbitration Rules 12

§ 5 Switzerland’s Standing as Place of Arbitration 14

Chapter 2: Arbitration Agreement 15

§ 6 General Remarks 151. Terminology 152. Subject of the Arbitration Agreement 153. Standard Arbitration Agreement 164. Validity of the Arbitration Agreement 18

§ 7 Subjective Arbitrability 18

§ 8 Objective Arbitrability 20

§ 9 Substantive Validity 211. Principle of favor validitatis 212. Scope of Application of Art. 178(2) of the PILS 223. Restrictive Interpretation of the Formation of an

Arbitration Agreement 234. Pathological Arbitration Agreements 235. Arbitration Agreements by Reference in Particular 246. Arbitration by Unilateral Disposition in Particular 25

§ 10 Formal Validity 251. Form Requirements 252. Form Requirements Pursuant to Art. 178(1) of the PILS 263. Relationship to Art. II(2) of the NYC 264. Effects of Lack of Form 27

§ 11 Arbitration Agreement and Main Contract 27

§ 12 Interpretation and Scope of the Arbitration Agreement 281. Interpretation of the Arbitration Agreement 282. Objective Scope of Application 28

a) General Remarks 28b) Contractual Claims 29c) Non-Contractual Claims 29d) Plurality of Contracts 29e) Set-Off Defenses 30f) Counterclaim 30

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3. Subjective Scope of Application 30a) General Remarks 30b) Legal Succession 30

aa) Universal Succession 30bb) Singular Succession 31cc) Bankruptcy and Debt Restructuring 31

c) Extension of the Arbitration Agreement to Third Parties 32aa) General Remarks 32bb) Reliance-Based Liability 32cc) Piercing the Corporate Veil 32dd) Intervention of Third Parties 33ee) Group of Companies Doctrine 33

§ 13 Effect of the Arbitration Agreement 341. Positive Effect: Jurisdiction of the Arbitral Tribunal 342. Negative Effect: Exclusion of the Jurisdiction of State Courts 343. Side Effect of the Arbitration Agreement 344. Enforceability of the Arbitration Agreement 35

§ 14 Termination of the Arbitration Agreement 361. General Remarks 362. Revocation by Agreement 363. Conditions and Term-Limitations 374. Achievement of the Objective, Subsequent Impossibility 375. Unilateral Termination 37

Chapter 3: Jurisdiction of the Arbitral Tribunal 39

§ 15 Competence-Competence 39

§ 16 Decision on Jurisdiction 401. Examination on Jurisdiction of the Arbitral Tribunal 402. Plea of Lack of Jurisdiction 403. Timing of the Decision on Jurisdiction 414. Effect of the Decision on Jurisdiction 425. Challenge of the Decision on Jurisdiction 42

§ 17 Examination of Jurisdiction by State Courts 431. Preliminary Examination of Jurisdiction by State Courts 432. Requirement of a Request of a Party 433. Examination of Jurisdiction by State Courts 43

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4. Degree of Review 445. Examination of Jurisdiction by the juge d’appui 44

§ 18 Jurisdiction in the Absence of an Arbitration Agreement 45

Chapter 4: Arbitral Tribunal 47

§ 19 Seat of the Arbitral Tribunal 471. Definition of the Seat 472. Relevance of the Seat 473. Determination of the Seat 48

§ 20 Constitution of the Arbitral Tribunal 501. Composition of the Arbitral Tribunal 50

a) General Remarks 50b) Number of Arbitrators 50c) Requirements with Regard to the Identity of the

Arbitrator 512. Appointment of the Arbitrator 52

a) Appointment by the Parties 52b) Appointment by an Appointing Authority 53c) Appointment by the State Court as juge d’appui 54d) Issues in Multi-Party Arbitrations 55

3. Remedies Against the Decision on Appointment 55

§ 21 Challenge, Revocation, Removal, Resignation and Replacement of an Arbitrator 561. Challenge of an Arbitrator 56

a) Grounds for Challenge 56aa) General Remarks 56bb) Absence of Agreed Requirements 56cc) Justifiable Doubts as to Independence and

Impartiality 57b) Challenge of the Arbitral Tribunal 58c) Conditions for a Challenge 58d) Procedure for Challenging an Arbitrator 59e) Remedies Against the Decision on the Challenge 59

2. Revocation and Removal 60a) Revocation 60b) Removal 60

3. Resignation of an Arbitrator 61

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4. Replacement of an Arbitrator 615. Continuation of the Proceedings Without Replacement

(So-Called Truncated Tribunal) 62

§ 22 Legal Relationship Between the Arbitrator and the Parties 631. Legal Nature of the receptum arbitri 632. Effects of the receptum arbitri 633. Conclusion and Termination of the receptum arbitri 64

§ 23 Secretary of the Arbitral Tribunal 65

Chapter 5: Arbitral Proceedings 67

§ 24 Commencing the Arbitration 671. General Remarks 672. Pendency (lis pendens) 67

a) Definition 67b) Beginning of Pendency 67c) Effects of Pendency 68

3. Notice of Arbitration 70

§ 25 Applicable Procedural Rules 711. General Remarks 712. Determination of the Procedural Rules 71

a) Determination by the Parties 71b) Determination by the Arbitral Tribunal 72

3. Mandatory Procedural Guarantees 73a) General Remarks 73b) Right to Be Heard 73c) Right to Equal Treatment 74

§ 26 Proceedings Before the Arbitral Tribunal 741. Organization of the Proceedings 74

a) General Remarks 74b) Organization of the Panel 75c) Terms of Reference 75d) Timetable 75e) Specific Procedural Rules 76f) Language of the Arbitration 76g) Legal Representation 76h) Organization of the Proceedings 77

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2. Written Submissions 77a) General Remarks 77b) Number and Sequence 78c) Content 79d) Amendments to the Claim 79e) Counterclaim and Set-Off Defenses in Particular 79

3. Advances on Costs and Security for Costs 80a) Advance to Cover the Costs of Arbitration 80b) Security for Costs 81

4. Taking of Evidence 82a) Subject-Matter of the Taking of Evidence 82b) Jurisdiction 83c) Presentation of Evidence 84d) Admissibility of Evidence 84e) Evidence 84

aa) General Remarks 84bb) Documents 85cc) Witnesses 86dd) Experts 88ee) Inspection 90

f) Procedure for the Taking of Evidence 90g) Assessment of Evidence 90h) Assistance by State Courts 91

5. Hearing 92a) General Remarks 92b) Organization of the Hearing 92c) Conduct of the Hearing 92

6. Post-Hearing Matters 937. Peculiarities 94

a) Expedited Procedure 94b) Stay of Proceedings 95c) Default of a Party 95

8. Assistance by State Courts 96a) Situations of Assistance by State Courts 96b) Procedure According to Art. 185 of the PILS 97

9. Confidentiality 97

§ 27 Provisional and Conservatory Measures 981. Definition 98

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2. Authority to Order Provisional Measures 99a) Authority of the Arbitral Tribunal 99b) Authority of the State Court 99c) Cumulative Authority of the Arbitral Tribunal and

of State Courts 1003. Provisional Measures Ordered by the Arbitral Tribunal 101

a) Types of Provisional Measures 101b) Standards for Provisional Measures 103c) Procedure 103d) Provision of Security 104

4. Enforcement of Provisional Measures 104a) Enforcement of Provisional Measures Ordered by the

Arbitral Tribunal 104aa) General Remarks 104bb) Enforcement by the Arbitral Tribunal 104cc) Assistance by the State Court 105

b) Enforcement of Provisional Measures Ordered by State Courts 106

§ 28 Overview of the Arbitral Proceedings 108

Chapter 6: Arbitral Award 109

§ 29 Definition and Types of Awards 1091. Definition 1092. Types of Awards 109

a) Final Award 109b) Partial Award 110c) Interim and Preliminary Awards 110

§ 30 Applicable Law 1111. General Remarks 1112. Award in Accordance with Legal Rules 111

a) Principle of Party Autonomy 111aa) General Remarks 111bb) Choice-of-Law Agreement 111cc) Content of the Choice of Law 111dd) Scope of the Applicable Law 112

b) Autonomy of the Arbitral Tribunal in the Absence of an Agreement by the Parties 113

c) Public Policy 114

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d) Determination of the Applicable Law 1143. Award ex aequo et bono 115

a) Definition 115b) Agreement on a Decision ex aequo et bono 116

4. Effect of Non-Compliance with Art. 187 of the PILS 116

§ 31 Rendering of the Award 1161. Primacy of Party Autonomy 1162. Deliberations and Vote 1163. Time-Limit for Rendering the Award 117

§ 32 Form and Content of the Arbitral Award 1181. Primacy of Party Autonomy 1182. Form of the Arbitral Award 1183. Elements of the Arbitral Award 118

a) General Remarks 118b) Reasons 119c) Date and Signature 119

4. Dissenting Opinion 120

§ 33 Settlement and Other Grounds for Termination 1211. Settlement 121

a) General Remarks 121b) Consent Award; Award on Agreed Terms 121c) Order for the Termination of the Proceedings 121d) Effect of Defects of Intention 122

2. Acceptance and Withdrawal of the Claim 1223. Other Reasons for the Termination of the Proceedings 123

§ 34 Effect of the Arbitral Award 1231. Notification of the Award 1232. Res judicataEffect of an Arbitral Award 1243. Confidentiality of the Award 1254. Deposit of the Arbitral Award 1255. Interpretation and Correction of the Award and

Additional Award 125

§ 35 Costs of Arbitration 1271. General Remarks 1272. Arbitration Costs and Their Allocation 1273. Party Costs and Their Allocation 1284. Remedies Against the Decision on Costs 129

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5. Side Note: Costs in Practice 129

Chapter 7: Annulment and Revision of Arbitral Awards 131

§ 36 Annulment of Arbitral Awards 1311. General Remarks 1312. Awards Subject to an Annulment 1323. Grounds for Annulment 132

a) General Remarks 132b) Improper Constitution of the Arbitral Tribunal 133c) Wrong Decision on Jurisdiction 134d) Decision ultraorinfra petita 135e) Violation of Equal Treatment or the Right to Be Heard 136f) Violation of Public Policy 137

aa) General Remarks 137bb) Definition of Public Policy 137cc) Substantive Public Policy 138dd) Procedural Public Policy 139

4. Annulment Proceedings 140a) Jurisdiction and Procedure 140b) Conditions for Admissibility 140c) Effects of an Action for Annulment 140d) Proceedings Before the Federal Tribunal 141e) Annulment of Preliminary Awards in Particular

(PILS, Art. 190[3]) 1415. Decision on the Action for Annulment 1426. Remedies Against the Decision on the Action for

Annulment 1427. Waiver of the Action for Annulment 143

a) General Remarks 143b) Requirements for a Waiver 143c) Effects of a Waiver 144

§ 37 Revision of the Arbitral Award 1451. Admissibility of a Revision of an Arbitral Award 1452. Awards Subject to a Revision 1463. Grounds for Revision 146

a) General Remarks 146b) Influence of Criminal Acts 146

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c) Subsequent Discovery of Significant Facts or Decisive Evidence 146

4. Procedure 1465. Decision on a Request for Revision 1476. Remedies Against the Decision on a Request for Revision 148

Chapter 8: Recognition and Enforcement of Swiss and Foreign Arbitral Awards 149

§ 38 General Remarks 149

§ 39 Certificate of Enforceability 150

§ 40 Recognition and Enforcement of Swiss Arbitral Awards 1511. Recognition of Swiss Arbitral Awards 151

a) General Remarks 151b) Monetary Claims 152c) Non-Monetary Claims 152d) Side Note: Enforcement Against a State 153

2. «Recognition» of Swiss Arbitral Awards 154

§ 41 Recognition and Enforcement of Foreign Awards 1541. Legal Basis 154

a) Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention; NYC) 154

b) Matters Governed by the NYC 154c) Scope of Application of the NYC 155d) Side Note: Recognition and Enforcement of Swiss

Arbitral Awards Abroad 1562. Procedure 156

a) General Remarks 156b) Monetary Claims 156c) Non-Monetary Claims 157d) Recognition of Foreign Arbitral Awards 157

3. Procedural Requirements of the NYC 1584. Grounds for Refusal of the NYC 158

a) General Remarks 158b) Ground for Refusal Considered at the Request of a

Party (NYC, Art. V[1]) 159aa) Invalidity of the Arbitration Agreement 159

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bb) Violation of the Right to Be Heard 160cc) Decision Beyond the Arbitration Agreement 161dd) Violation of Provisions Regarding the

Constitution of the Arbitral Tribunal or the Arbitral Procedure 161

ee) Non-Binding, Set Aside or Suspended Arbitral Award 162

c) Grounds for Refusal to be Considered ex officio (NYC, Art. V[2]) 163aa) Lack of Arbitrability 163bb) Incompatibility with Swiss Public Policy 164

Appendix 1: Chapter 12 of the PILS 165

Appendix 2: Arbitral Institutions, Arbitration Rules and Standard Clauses 173

Index 177

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