LAWS AND INSTITUTIONS
Multilateral conventions relating to arbitration
1 Is your jurisdiction a contracting state to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards? Since when has the Convention been in force? Were any declarations or notifications made under articles I, X and XI of the Convention? What other multilateral conventions relating to international commercial and investment arbitration is your country a party to?
Switzerland is a contracting party to the New York Convention. It entered into force on 30 August 1965. Switzerland originally made a reciprocity reservation pursuant to article I(3) of the New York Convention, but withdrew it in 1993.
Switzerland is also a contracting party to the Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927. However, according to article VII(2) of the New York Convention, these treaties cease to have effect between contracting states to the New York Convention. As a consequence, the Geneva Convention has had no effect since 2007. Today, the Geneva Protocol applies only in relation to Iraq.
Finally, Switzerland is also a contracting party to the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965.
Bilateral investment treaties
2 Do bilateral investment treaties exist with other countries?
Switzerland has signed over 120 bilateral investment treaties (for further details see www.seco.admin.ch/seco/en/home/ Aussenwirtschaftspolitik_Wirtschaftliche_Zusammenarbeit/ Wirtschaftsbeziehungen/Internationale_Investitionen/Vertragspolitik_ der_Schweiz/overview-of-bits.html).
Domestic arbitration law
3 What are the primary domestic sources of law relating to domestic and foreign arbitral proceedings, and recognition and enforcement of awards?
Swiss law distinguishes between international and domestic arbitration. Chapter 12 of the Federal Statute on Private International Law applies to international arbitration (ie, where at least one of the parties has its domicile or regular place of residence outside of Switzerland at the time it enters into the arbitration agreement). Part 3 of the Civil Procedure Code (articles 353 et seq) applies to domestic arbitration (ie, where none of the parties has its domicile or regular place of residence outside Switzerland at the time the arbitration agreement is concluded).
The parties to a domestic arbitration are free to agree (in writing or any other form evidenced by text) that the provisions of Chapter 12 of the Federal Statute on Private International Law shall apply to their arbitral proceedings (article 353(2) Civil Procedure Code).
Domestic arbitration and UNCITRAL
4 Is your domestic arbitration law based on the UNCITRAL Model Law? What are the major differences between your domestic arbitration law and the UNCITRAL Model Law?
Swiss arbitration law is not based on the UNCITRAL Model Law.
Chapter 12 of the Federal Statute on Private International Law, which was drafted around the same time as the UNCITRAL Model Law, does not substantially differ from the latter. It is, however, with only 19 provisions, significantly shorter in comparison to the UNCITRAL Model Law.
Part 3 of the Civil Procedure Code is more detailed and goes back largely to the Inter-Cantonal Concordat on Arbitration of 1969.
5 What are the mandatory domestic arbitration law provisions on procedure from which parties may not deviate?
Insofar as Chapter 12 of the Federal Statute on Private International Law is concerned, the following provisions are considered to be mandatory:
- objective arbitrability (article 177(1));
- subjective arbitrability of a state, or an enterprise held by or an organisation controlled by a state (article 177(2));
- the written form of the arbitration agreement (article 178(1));
- the independence of arbitrators (article 180(1)(c));
- the possibility for a party to challenge the appointment of an arbitrator it has nominated based on grounds that come to its attention after such appointment (article 180(2));
- the principle of lis pendens (article 181) ;
- the equal treatment requirement and the right to be heard in an adversarial procedure (article 182(3)); and
- judicial assistance (article 185).
In addition, the action for the annulment of arbitral awards (article 190(2) of the Federal Statute on Private International Law) is considered mandatory in international arbitration if one of the parties is Swiss. If none of the parties to the arbitration agreement has its domicile, its habitual residence or a business establishment in Switzerland, the parties can waive the right to appeal the decision according to article 192 of the Federal Statute on Private International Law.
6. Is there any rule in your domestic arbitration law that provides the arbitral tribunal with guidance as to which substantive law to apply to the merits of the dispute?
The parties are free to choose the rules of law applicable to their conflict. According to article 187(1) of the Federal Statute on Private International Law, a dispute is decided according to the rules of law chosen by the parties or, in the absence of such a choice, according to the rules of law with which the case has the closest connection.
The parties can also authorise the tribunal to decide ex aequo et bono (article 187(2) of the Federal Statute on Private International Law).
7 What are the most prominent arbitral institutions situated in your jurisdiction?
The most prominent arbitration institutions situated in Switzerland are the following:
- Swiss Chambers' Arbitration Institution (SCAI) (www.swissarbitration.org; 4, Boulevard du Théâtre, P.O. Box 5039, CH-1211 Geneva 11, Switzerland, with offices in Geneva, Zurich and Lugano);
- Court of Arbitration for Sport (CAS) (www.tas-cas.org; Château de Béthusy Avenue de Beaumont 2, CH-1012 Lausanne, Switzerland); and
- Arbitration and Mediation Center of the World Intellectual Property Organization (WIPO) (www.wipo.int/amc/en/center/; 34, chemin des Colombettes, 1211 Geneva 20, Switzerland).
SCAI administers arbitration proceedings under the Swiss Rules of International Arbitration. The revised Swiss Rules took effect on 1 June 2012 and are a flexible set of rules under which the parties are free to designate their arbitrator(s) and to select the applicable law, the seat of the arbitration and the language of the proceedings.
CAS arbitrations are governed by the Code of Sports-related Arbitration. CAS operates with a system of a closed list of arbitrators (for further details see www.tas-cas.org/en/arbitration/liste-des-arbitres-liste-generale.html).
The Arbitration and Mediation Center of the WIPO administers arbitrations under the WIPO Arbitration Rules. The latter are, due to their provisions on confidentiality and technical and experimental evidence, of special interest to parties to intellectual property disputes.
8 Are there any types of disputes that are not arbitrable?
According to article 177(1) of the Federal Statute on Private International Law, any dispute of financial interest may be the subject of arbitration. This includes monetary claims relating to labour matters, marital property matters, disputes between heirs and intellectual property matters, as well as antitrust and competition law matters.
By contrast, claims that first and foremost affect a party's personal rights – such as marriage, paternity, child adoption, divorce or separation – are not arbitrable. Likewise, claims in bankruptcy law that are strictly part of the debt collection procedure, such as claims belonging to the bankruptcy estate, are considered to be non-arbitrable.
9 What formal and other requirements exist for an arbitration agreement?
Swiss law distinguishes between formal and substantive validity.
With regard to formal validity, Swiss law requires the arbitration agreement to be in writing. Signature by the parties is not required. The written form requirement is considered to be met if the arbitration agreement is concluded in writing or by telegram, telex, telecopier or any other means of communication that permits it to be evidenced in text (article 178(1) of the Federal Statute on Private International Law). This requirement is also generally met by any modern means of electronic communication, such as email. Accordingly, the form requirements can also be fulfilled for arbitration agreements in general terms and conditions (please note that the substantive validity will have to be assessed on a case-by-case basis).
It is not settled whether both parties must adhere to the formal requirement of article 178(1) of the Federal Statute on Private International Law, or whether it is enough that a written offer to arbitrate by one party is accepted orally or tacitly by the other.
With regard to substantive validity, article 178(2) of the Federal Statute on Private International Law provides that an arbitration agreement is valid if it conforms to the law chosen by the parties, the law governing the subject matter of the dispute or Swiss law. It is sufficient if the arbitration agreement is valid under the substantive law of any of these three laws.
If substantive validity is examined under Swiss law, the parties must have the capacity to validly enter into an arbitration agreement (subjective arbitrability) and the subject matter of the dispute must be arbitrable (objective arbitrability).
In addition, the parties' consent with regard to the essential elements of the arbitration agreement is required. This requires that the parties express their intention to submit their dispute to arbitration and that the arbitration agreement specifies the object or the legal relationship subject to arbitration.
10 In what circumstances is an arbitration agreement no longer enforceable?
An arbitration agreement is valid and enforceable if it conforms either to the law chosen by the parties, the law governing the subject matter of the dispute, in particular the main contract, or Swiss law (article 178(2) of the Federal Statute on International Private Law).
Since the doctrine of separability applies in Swiss law (article 178(3) of the Federal Statute on Private International Law), the avoidance, rescission or termination of a contract will generally not affect the validity of an arbitration agreement contained therein. However, there may be instances in which the main contract as well as the arbitration agreement are subject to the same grounds for invalidity.
While the death of a party will usually not cause the arbitration agreement to become inoperative, legal incapacity to enter into an arbitration agreement may be a ground for the arbitration agreement to be invalid. In this context it is noted that, under Swiss law, a state or state-owned entity cannot invoke its own law in order to contest its capacity to arbitrate (article 177(2) of the Federal Statute of Private International Law).
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