Answer ... The relevant legislation governing arbitration in Switzerland is Chapter 12 of the Swiss Private International Law Act (PILA), which entered into force on 1 January 1989. Since 1 January 2011, domestic arbitration has been governed by the Third Title of the Swiss Civil Procedure Code (CPC).
Both the PILA and the CPC require the arbitration agreement to fulfil minimum formal and substantive requirements in order to be valid (see also question 10).
Answer ... Chapter 12 of the PILA, which governs international arbitration, is applicable if at least one party to the arbitration agreement had its domicile or habitual residence outside Switzerland at the time of the conclusion of the arbitration agreement. In the sense of a negative distinction, the arbitration is otherwise considered to be domestic and is governed by the Third Title of the CPC. In terms of geographical scope, both the PILA and the CPC require the seat of the tribunal to be in Switzerland.
The parties to an international arbitration dispute may declare the provisions on domestic arbitration of the CPC to apply in lieu of the provisions of the PILA (Article 167, paragraph 2 of the PILA) and vice versa (Article 353, paragraph 2 of the CPC).
Answer ... Neither the PILA nor the CPC is based on the UNCITRAL Model Law. However, they do not substantially differ from the UNCITRAL Model Law.
Answer ... While Swiss law places great emphasis on party autonomy and maximum flexibility of arbitral proceedings, both the PILA and the CPC contain several mandatory provisions. In particular, the following provisions are mandatory:
- Article 177 of the PILA and Article 353 CPC determining the arbitrability of a dispute;
- Article 180, paragraph 1(c) of the PILA and Article 367, paragraph 1(c) of the CPC stipulating the right to challenge an arbitrator based on lack of independence or impartiality;
- Article 182, paragraph 3 of the PILA and Article 373, paragraph 4 of the CPC requiring the arbitral tribunal to ensure equal treatment of the parties and compliance with their right to be heard; and
- Article 185 of the PILA and Article 356 of the CPC providing for assistance by the state courts at the seat of the arbitral tribunal.
Answer ... Roughly 27 years after Chapter 12 of the PILA entered into force on 1 January 1989, triggered by a motion of the Swiss Parliament, the legislation governing international arbitration is being revised. In January 2017, the Swiss Federal Council proposed a draft partial revision of Chapter 12 and invited interested parties to participate in consultation on such draft revision until the end of May 2017. The final legislation will then be submitted to the Swiss Parliament for discussion and approval.
Stakeholders agree that Chapter 12 of the PILA does not require fundamental reforms, as it is still considered to be a modern statute. As a consequence, the draft presented by the Swiss Federal Council does not constitute a complete revision of the existing legislation, but rather aims to maintain the attractiveness of Switzerland for international arbitration.
Against this backdrop, the revision of Chapter 12 of the PILA is directed at:
- implementing and converting into law Swiss Federal Tribunal case law from the last 25 years;
- further strengthening party autonomy; and
- making the provisions of Chapter 12 more user friendly.
The revised draft Chapter 12 includes, among other things:
- new codified provisions on the revision, rectification, explanation and correction of awards;
- the possibility to make submissions to the Swiss Federal Tribunal in English; and
- a relaxation of the formal requirements regarding the conclusion of the arbitration agreement.
Answer ... Switzerland is a signatory to the New York Convention, which was ratified in 1965 and entered into force on 30 August 1965. Switzerland made no reservations to the general obligations of the convention. The reciprocity reservation of Switzerland was withdrawn when the PILA entered into force on 1 January 1989 and the New York Convention applies erga omnes.
Answer ... Switzerland is a party to the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, as well as to the Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927.