Comparative Guides
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Results: 4 Answers
International Arbitration
8.
The tribunal
8.1
How is the tribunal appointed?
 
Switzerland
In Swiss international and domestic arbitration, the parties to an arbitration enjoy freedom in the selection of arbitrators. Accordingly, Article 179 of the Private International Law Act (PILA) provides that the arbitrators shall be appointed, removed and replaced pursuant to the agreement of the parties. In the absence of such agreement, the court at the place of arbitration shall apply (by analogy) the provisions of the Swiss Code of Civil Procedure (CPC) on the appointment, removal and replacement of arbitrators (Article 179, paragraph 2 of the PILA in conjunction with Articles 360 to 371 of the CPC). Equally, if the parties fail to agree on the individual to be appointed as a sole or presiding arbitrator, the competent court at the place of arbitration will appoint the arbitrator upon a party’s request.

If the parties to an arbitration agreement have, for instance, chosen the Swiss Rules of International Arbitration to govern the arbitration proceeding, but have not agreed on the number of arbitrators, the Arbitration Court –which was established by the Swiss Chambers’ Arbitration Institution and is comprised of experienced arbitration practitioners – shall decide whether the case shall be referred to a sole arbitrator or to a three-member tribunal (Article 6, paragraph 1 of the Swiss Rules). Moreover, if the parties fail to designate the sole arbitrator within the applicable timeframe, the Arbitration Court shall proceed with the appointment (Article 7, paragraph 3 of the Swiss Rules).

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.2
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
 
Switzerland
In both international and domestic arbitration, the members of the arbitral tribunal must be appointed as agreed by the parties (Article 179, paragraph 1 of the PILA and Article 361, paragraph 1 of the CPC). There are generally no restrictions on the appointment of arbitrators, apart from the requirements of independence and impartiality.

The parties are free to agree on the number of arbitrators. However, in domestic arbitration, if there is no agreement on the number of arbitrators, Article 360, paragraph 1 of the CPC stipulates that the arbitral tribunal will consist of three members. Equally, if the parties have agreed on an even number of arbitrators, it is presumed that an additional arbitrator must be appointed as the chairperson (Article 360, paragraph 2 of the PILA).

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.3
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
 
Switzerland
Article 180, paragraph 1 of the PILA and Article 367 of the CPC set out three grounds for challenging an arbitrator:

  • The appointed arbitrator does not have the qualifications agreed upon by the parties;
  • The rules of arbitration agreed upon by the parties provide grounds for challenging the arbitrator; or
  • Circumstances giving rise to reasonable doubts as to the arbitrator’s independence exist.

The challenge of an arbitrator is restricted, by both Article 180, paragraph 2 of the PILA and Article 367, paragraph 2 of the CPC, if a party wishes to challenge an arbitrator whom it nominated itself or in whose appointment it participated. In such case, the party can do so only on grounds that have come to its attention after the appointment of the respective arbitrator, and the grounds for challenge must be notified to the arbitral tribunal and the other party without delay.

If the parties have not agreed on a challenge procedure (including by means of referring to institutional rules of arbitration), the competent court at the seat of the arbitral tribunal shall make a final decision (Article 180, paragraph 3 of the PILA).

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.4
If a challenge is successful, how is the arbitrator replaced?
 
Switzerland
The procedure for the removal of an arbitrator is primarily subject to the parties’ agreement (Article 179, paragraph 1 of the PILA). In the absence of such agreement, the court at the place of arbitration shall apply (by analogy) the provisions of the CPC on removal or replacement of arbitrators (Article 179, paragraph 2 of the PILA in conjunction with Articles 360 to 371 of the CPC).

Articles 13 and 14 of the Swiss Rules provide for a specific procedural framework if an arbitrator is successfully challenged and is thus to be replaced. The Arbitration Court (see also question 24) will set a time limit for the parties to appoint a new arbitrator pursuant to the regular procedure stipulated in Articles 7 and 8 of the Swiss Rules (Article 13 of the Swiss Rules). In exceptional circumstances, and after consulting with the parties and the remaining arbitrators, the Arbitration Court may either directly appoint the replacement arbitrator or, after closure of the proceeding (pursuant to Article 13, paragraph 2 of the Swiss Rules), authorise the remaining arbitrator(s) to proceed with the arbitration and render any decision or award. In addition, as per Article 14 of the Swiss Rules, the proceeding shall, as a rule, resume at the stage reached when the replaced arbitrator ceased to perform his or her functions, unless the arbitral tribunal decides otherwise.

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.5
What duties are imposed on arbitrators? Are these all imposed by legislation?
 
Switzerland
The legal relationship between the arbitrator and the parties (receptum arbitri) is qualified according to the law at the seat of the arbitral tribunal (lex arbitri). According to Swiss case law and legal doctrine, the arbitrator is obliged to fulfil, personally and in a timely manner, all of his or her duties with all due care. In addition, throughout the proceeding, arbitrators are committed to independence and impartiality.

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.6
What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
 
Switzerland
(a) Procedure, including evidence?

Neither the PILA nor the CPC includes particular rules governing the arbitral procedure per se. Pursuant to Article 182, paragraph 1 of the PILA, the parties may, directly or by referencing rules of arbitration, determine the arbitration proceeding. If the parties have not done so and/or the referenced rules of arbitration are silent in this regard, the arbitral tribunal must determine the procedure to the extent necessary (Article 182, paragraph 2 of the PILA). Whatever procedure applies, the arbitral tribunal must ensure equal treatment of the parties and the right of the parties to be heard (Article 182, paragraph 3 of the PILA).

As regards the taking of evidence, Article 184, paragraph 1 of the PILA and Article 375 of the CPC stipulate the arbitral tribunal’s obligation to administer the taking of evidence. However, if the taking of evidence or other procedural acts require the assistance of the state courts (eg, due to the fact that arbitral tribunals do not have coercive powers), such participation may be requested from the state court at the seat of the arbitral tribunal either by the arbitral tribunal itself or by a party to the arbitration with the consent of the arbitral tribunal (Article 184, paragraph 2 of the PILA and Article 375, paragraph 2 of the CPC).

(b) Interim relief?

Provided that the parties have not agreed otherwise, and upon the request of a party, arbitral tribunals in Swiss arbitration proceedings have broad discretion with regard to interim measures and the parties can benefit from all interim relief available under Swiss domestic law (Article 183, paragraph 1 of the PILA and Article 374, paragraph 1of the CPC). As per Article 262 of the CPC, on the motion of one party, any interim measure suitable to prevent imminent harm may be ordered. In particular, in the cases provided for by law, the parties to the arbitration may seek:

  • an injunction;
  • an order to remedy an unlawful situation;
  • an order directed to a registry authority or to a third party;
  • performance in kind; and
  • payment of a sum of money.

The party requesting interim relief may also be ordered by the arbitral tribunal to post security in order to secure potential damages suffered by the opposing party (Article 183, paragraph 3 of the PILA).

In contrast to the interim relief ordered by the Swiss state courts, an arbitral tribunal may even grant interim relief that is not recognised under Swiss law. However, the assistance of the state courts in connection with interim relief is of critical importance, as:

  • if the respective party does not comply voluntarily, the interim relief must be enforced by the state courts;
  • the arbitral tribunal has no competence to issue binding and enforceable orders against third parties which are not party to the arbitration agreement (eg, banks in the case of freezing orders); and
  • given that interim measures are generally urgently required, a party will often require such interim relief to be ordered ex parte (ie, without the arbitral tribunal hearing the counterparty). While state courts will grant interim measures ex parte, arbitral tribunals are unlikely to grant interim relief ex parte, unless the institutional rules referenced by the parties expressly provide otherwise (as is the case with the Swiss Rules).

Various institutional arbitration rules (including the Swiss Rules and the International Chamber of Commerce Arbitration Rules) provide for the possibility to call on an emergency arbitrator to grant interim relief even before the arbitral tribunal has been formally established. Equally, state courts can be called on to grant interim relief before the constitution of the arbitral tribunal.

(c) Parties which do not comply with its orders?

In case the party concerned does not voluntarily comply with an interim measure ordered by an arbitral tribunal upon the request of the opposing party, the arbitral tribunal may request the state court to assist in the enforcement of such order (according to Article 183, paragraph 2 of the PILA and Article 374, paragraph 2 of the CPC).

(d) Issuing partial final awards?

Unless the parties to an arbitration proceeding have agreed otherwise, the arbitral tribunal may issue a partial final award limited to certain questions or prayers for relief (Articles 188 and 383 of the CPC).

(e) The remedies it can grant in a final award?

In principle, the PILA and the CPC impose no limits on the final relief that may be awarded by an arbitral tribunal with its seat in Switzerland. However, limitations on the available remedies may be imposed by the arbitration agreement, the law governing the dispute and, in practical terms, the laws of the place(s) where the award will need to be enforced.

If the dispute is governed by Swiss law, the following main categories of final remedies exist:

  • performance or damages, if specific performance is no longer possible;
  • creation, modification or termination of a legal relationship; and
  • declaratory relief.

In accordance with Article V, paragraph 2(b) of the New York Convention, the Swiss courts will not enforce remedies that are considered to be contrary to Swiss public policy. In this regard, according to the Swiss Federal Tribunal, treble and punitive damages might infringe Swiss public policy, depending on the particular circumstances of the case.

(f) Interest?

The payment of interest on principal claims and costs is governed by the applicable substantive law to the matter in dispute (Article 187, paragraph 1 of the PILA). If Swiss law is the applicable substantive law, pre and post-award interest can be included by the arbitral tribunal on both the principal claim and the costs incurred.

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.7
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
 
Switzerland
In general, it is up to the arbitral tribunal to deal with a party that does not participate in an arbitration and neither the PILA nor the CPC provides particular rules in this regard. However, as the arbitral tribunal is required by Swiss law to treat the parties to an arbitration proceeding equally and to ensure the parties’ right to be heard, the arbitral tribunal is obliged to ensure that the parties are properly informed and served. If these conditions are met, a default award is generally considered valid and enforceable.

Except where a party fails to appoint an arbitrator when establishing the arbitral tribunal (in which case the state court will step in in lieu of the defaulting party – see question 24), Swiss law does not entrust the state courts at the seat of the arbitral tribunal with the authority to compel the parties to participate in the arbitration proceeding.

If the parties have agreed on the Swiss Rules, Article 28 provides for a specific procedure in case a party fails to undertake procedural acts. On condition that the parties are duly notified, the arbitral tribunal may proceed with the arbitration in case one of the parties fails to appear at a hearing without showing sufficient cause for its failure. Equally, the arbitral tribunal may render an award based on the available evidence if a party fails to produce evidence.

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG
8.8
Are arbitrators immune from liability?
 
Switzerland
Neither the PILA nor the CPC specifically addresses arbitrators’ liability or immunity therefrom.

As per general Swiss contract law, the liability of arbitrators is considered to be limited to unlawful intent or gross negligence. If the parties have agreed on the Swiss Rules, Article 45 excludes the arbitrators from liability for any act or omission in connection with arbitration conducted under the Swiss Rules, unless such act or omission is shown to constitute intentional wrongdoing or gross negligence.

For more information about this answer please contact: Anja Vogt from Niederer Kraft Frey AG