Swiss Arbitration Law and its Revision

The new Chapter 12 of the Swiss Private International Law Act (PILA), which defines the procedural procedures for international arbitration, went into effect on January 1, 2021. The revision implemented critical components of the Swiss Federal Supreme Court's (SFSC) international arbitration jurisprudence into the PILA, explaining existing legal uncertainty and risk and substituting stand-alone rules for references to other laws to establish a user-friendly, broad selection of procedural rules.

The most significant changes in the updated Law includes provisions for foreign arbitral proceedings that apply if at least one party to the arbitration clause was not seated, resident, or had its regular place of abode in Switzerland at the time the arbitration clause was concluded, contrary to earlier SFSC case law. Previously, the SFSC simply looked at the arbitral proceedings' parties.

The following are some of the most major changes found in the revised law:

New Clauses

Arbitration clauses can now be validly added in unilateral legal actions such as articles of association, trust deeds, or testamentary dispositions, as stipulated by law.

Formal specifications

The arbitration clause, any opt-out in favor of the Swiss Civil Procedural Code, and any renunciation of legal remedies are all subject to the same form requirements.

Arbitral Tribunal

In the lacking of an agreement between the parties, the PILA now incorporates precise rules on the selection of the arbitral tribunal, as well as the challenge and recusal of arbitral tribunal members.

The following has also been clarified:

If a state court is asked to select a member of the arbitral tribunal in place of a party that has failed to nominate its member promptly, the state court may appoint all members of the arbitral tribunal or simply those that were to be appointed by the defaulting party. 

Procedural Rules Violations

An objection must be submitted quickly if there is a breach of procedural rules during the arbitral procedures; otherwise, the breach will not be cited at a later stage.

Assistance

In addition to arbitral tribunals, the parties may now apply to the juge d'appui for enforcement actions based on the arbitral tribunal's temporary or conservatory orders.

Furthermore, in addition to arbitral tribunals, the parties may now request the state court for help with evidence gathering. If a state court is asked to help an arbitral tribunal with the taking of evidence, the state court may utilize any kind of evidence specified in the arbitration agreement, even if that form of evidence is not permitted under Swiss domestic procedural law.

Legal action can be taken against the award.

Correction of clerical mistakes, clarifications of ambiguous instructions, and supplementation of an arbitral award that was incorrectly incomplete were all added.

The reasons for putting aside the award have stayed the same and are still relatively narrow. It has been underlined, however, that regardless of the amount in dispute, a setting aside application may be filed with the SFSC. In addition, formerly case-law-based standards for the modification of arbitral awards have been codified.

If you have any further questions or need support with an arbitration, feel free to contact our Head of Arbitration.

 
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