Swiss arbitration
is on the move

Abstract

On May 19, 2021, the Swiss Chambers’ Arbitration Institution (SCAI) announced its impending conversion into the Swiss Arbitration Centre. On June 1, 2021, the revised Swiss Rules of International Arbitration entered into force. At the same time, the Swiss Arbitration Association (ASA) presented an innovative and user-friendly internet platform, Swiss Arbitration, for everything related to arbitration in Switzerland. These recent developments are complemented by the entry into force on January 1, 2021 of the revised Swiss law on international arbitration (the Chapter 12 of the Private International Law Act (PILA); see our Bulletin on the revision here).

Overview

Switzerland has always been and still is recognized as a preferred venue for arbitration. It has traditionally been one of the three top venues for arbitration proceedings of the International Chamber of Commerce in Paris (together with England and France itself).

Competition by other venues is constantly increasing, however, not least because of the secular shift of international trade to East Asia as well as the emergence of arbitration centres in many countries.

To remain a top arbitration venue, Switzerland keeps evolving too. One step was the gentle revision of Chapter 12 of the Private International Law Act (PILA) regarding international arbitration, which confirms and even strengthens the uniquely liberal and arbitration-friendly tradition of Switzerland (our bulletin on the revision of Chapter 12 PILA can be accessed here). Another one was the reorganization of Swiss Chambers’ Arbitration Institution, SCAI, with the Swiss Arbitration Association, ASA, taking a controlling stake (discussed below). The ensuing conversion of SCAI to the Swiss Arbitration Centre and the revision of the Swiss Rules of International Arbitration (Swiss Rules), which entered into force on June 1, 2021, will help maintain Switzerland’s standing as an arbitration venue. Thirdly, the take-over of SCAI is part of a broader strategy of ASA to bring together providers of arbitration-related services for the benefit of and increased cooperation with Swiss and foreign users. The most visible element of this strategy is a new and unique website that serves as a portal for Swiss arbitration- and ADR-related services.

Swiss Chambers’ Arbitration Institution becomes the Swiss Arbitration Centre

On September 17, 2020, ASA and the cantonal chambers of commerce that constituted SCAI entered into an agreement that provided for the conversion of SCAI from an association into a limited company with ASA taking a 51% share and the cantonal chambers the remaining 49%. At the end of May 2021, the conversion took place. With the conversion, SCAI changed its name to Swiss Arbitration Centre, abbreviated as «the Centre». The new structure sets the framework for a long-term cooperation and guarantees the Centre’s necessary flexibility to compete on an international level.

ASA, a leading arbitration organization that brings together eminent arbitration practitioners from all over the world, is providing the necessary know-how and administrative support, with ASA’s Executive Director Korinna von Trotha also assuming the position of Executive Director of the Centre.

The cantonal chambers of commerce (Basel, Bern, Central Switzerland, Geneva, Neuchâtel, Ticino and Zurich) support the Centre in particular with their vast business networks and their infrastructure.

Revised Swiss Rules of International Arbitration

In the context of the conversion of SCAI to the Centre, SCAI’s Court of Arbitration undertook a review of the Swiss Rules that had last been revised in 2012. Being based on the UNCITRAL Arbitration Rules, the Swiss Rules provide for an arbitration procedure that combine international best practices with useful innovations and a comparatively light institutional framework. With their focus on party autonomy and efficiency, the 2012 Swiss Rules stood the test of time.

Therefore, only few substantial changes were necessary and the key features of the Swiss Rules remain the same («light touch administration»; multi-party proceedings; expedited proceedings and emergency arbitration). Key changes include:

  • Multi-party proceedings: The consolidation and joinder provision in the former article 4 Swiss Rules was one of the most prominent features of the Swiss Rules. The revised Swiss Rules reinforce this feature as they now contain detailed provisions in article 6 on «Cross-Claim, Joinder, Intervention», governing situations where additional claims are raised among the parties, against additional parties, or by an additional party, or where a third party requests to participate in the arbitration without raising claims. The provision on consolidation is now contained in article 7 Swiss Rules.
  • Streamlining of proceedings: In order to further enhance efficiency of arbitration proceedings under the Swiss Rules, article 19(2) Swiss Rules now provides that as soon as practically possible after receiving the file, the arbitral tribunal shall hold an initial conference with the parties to discuss the organization of the proceedings. At that conference or promptly thereafter, the arbitral tribunal shall prepare a procedural timetable including time limits for submissions, dates of any hearings as well as an estimate of the time required by the arbitral tribunal for its main decisions (article 19(3) Swiss Rules).
  • Paperless filings and remote hearings: Under the revised Swiss Rules, the filing of hard copies for the Notice of Arbitration and the Answer to the Notice of Arbitration is no longer required (articles 3(1) and 4(1) Swiss Rules). Moreover, while this has become a common and accepted practice throughout the last year, article 27(2) Swiss Rules now explicitly provides that hearings can be held remotely by videoconference or other appropriate means.

The new model arbitration clause reads as follows:

«Any dispute, controversy, or claim arising out of, or in relation to, this contract, including regarding the validity, invalidity, breach, or termination thereof, shall be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Arbitration Centre in force on the date on which the Notice of Arbitration is submitted in accordance with those Rules.
The number of arbitrators shall be … (‘one’, ‘three’, ‘one or three’);
The seat of the arbitration shall be … (name of city in Switzerland, unless the parties agree on a city in another country);
The arbitration proceedings shall be conducted in … (insert desired language).»

For the sake of clarity, it should be noted that arbitration clauses referring to SCAI remain valid and binding and arbitration proceedings initiated pursuant to such arbitration clauses will be administered by the Centre. However, it is recommended that new contracts include the new model clause set out above.

Swiss Arbitration – a new portal for arbitration and ADR

Users and practitioners interested in arbitration and alternative dispute resolution in Switzerland now benefit from a new, single internet portal providing services, information and links. The new platform can be accessed at www.swissarbitration.org and went live on June 1, 2021. It replaces the hitherto separate websites of ASA and of SCAI (now the Swiss Arbitration Centre) and also includes information from the Swiss Arbitration Academy and the Swiss Arbitration Hub. These four organizations have joined under a new brand «Swiss Arbitration» to emphasize their close cooperation for the benefit of arbitration users worldwide. The Swiss Arbitration Academy provides training for arbitration practitioners and the Swiss Arbitration Hub provides services and information for the organization of hearings in Switzerland.

Switzerland’s alternative dispute resolution landscape has traditionally been fractured between various institutions and organizations. Under the leadership of ASA, the Swiss Arbitration project has brought together important organizations under one roof and is open to admit further organizations in the future.

For users, this project means easier access to information and services but also even better quality of services due to a closer cooperation between the participating organizations. Its openness and flexibility will also allow the Swiss arbitration community to better react to changing needs of users and to continue to contribute to the development of arbitration and ADR services on both a national and international level.

Conclusion: Strengthening of Switzerland as arbitration venue

These changes are a positive development for users of Swiss arbitration. Taken together, the revised Chapter 12, the converted Swiss Arbitration Centre with the revised Swiss Rules as well as the innovative Swiss Arbitration platform provide a state-of-the-art framework for arbitration in Switzerland and better access to information and know-how. It further strengthens Switzerland’s case as an arbitration and mediation venue under the Swiss Rules, the ICC Rules or any other institutional or ad hoc rules.

If you have any queries related to this Bulletin, please refer to your contact person at Homburger or to: