Switzerland: Litigation, Mediation & Arbitration

Security for costs has become an increasingly important procedural issue in investment arbitration. A respondent State may spend millions defending a treaty claim and, even after prevailing and obtaining a costs award, remain exposed to non-recovery where the claimant is insolvent or has few assets against which the award can be enforced. Security for costs is designed to mitigate that risk before a final costs award is rendered.

The EU AI Act introduces a risk-based regulatory framework for artificial intelligence systems, with particular implications for arbitration proceedings. Sixteen leading arbitral institutions have jointly challenged the European Commission's draft guidelines, arguing that regulatory obligations risk being imposed on the wrong actors in the arbitral process.

The debate over replacing investor-State arbitration with a permanent standing investment court has moved from theory to practice, with UNCITRAL Working Group III now considering detailed draft statutes. While proponents argue that a permanent bench would reduce repeat-player incentives and improve consistency, critics warn that concentrating appointment power in States' hands, eliminating party participation in tribunal selection, and creating hierarchical appellate structures may introduce new problems of