Arbitration Clauses in Articles of Association Pursuant to the Revised Law on Corporations and the New Supplemental Swiss Rules for Corporate Law Disputes
<h4>1. Introduction</h4>
On January 1, 2023, the revised law on corporations will come into force. According to the revised law, the articles of association of corporations may now provide that corporate law disputes be settled by arbitration (article 697n CO). The same applies to partnerships limited by shares and limited liability companies.
The Swiss arbitral institution, the Swiss Arbitration Centre, has just issued Supplemental Swiss Rules for Corporate Law Disputes (<a href="https://www.swissarbitration.org/centre/arbitration/arbitration-rules/" target="_blank" rel="noopener">Supplemental Swiss Rules, version 2023</a>) to the existing Swiss Rules of International Arbitration (Swiss Rules) in order to conduct arbitration proceedings regarding corporate law disputes that are based on arbitration clauses included in articles of association.
This Bulletin presents the legal situation applicable as of 2023 with regard to arbitration clauses included in articles of association as well as the new Supplemental Swiss Rules. It also sets out the issues that need to be observed when drafting arbitration clauses in articles of association or when conducting arbitration proceedings based thereon.
<h4>2. As of 2023 Arbitration Clauses in Articles of Associations of Corporations Will Be Permitted</h4>
Switzerland has a long tradition of arbitration and is a well-known arbitration center for international and domestic arbitration.
Corporate law disputes are, however, rarely settled by means of alternative dispute resolution or arbitration. The reason for this was the uncertainty regarding the legal situation of arbitration clauses in articles of association until the new law on corporations comes into force at the beginning of 2023. For example, it was controversial whether an arbitration clause in articles of association of a corporation would lead to inadmissible additional duties for the shareholder and would therefore be inadmissible.
As of 2023, article 697n(1) of the Swiss Code of Obligations (CO) will stipulate that articles of association may provide for corporate law disputes to be resolved by arbitration. As of 2023, the validity of such arbitration clauses is therefore no longer at issue.
<h4>3. Reasons to Include an Arbitration Clause in Articles of Association</h4>
There are several reasons why corporate law disputes should be submitted to arbitration rather than to the jurisdiction of the state courts:
<ul>
<li>Efficiency: Corporate law disputes impact a company&#8217;s business performance negatively over a long period of time. All parties involved are therefore dependent on a prompt dispute resolution. The multiple levels of jurisdiction in state court proceedings and the numerous grounds for appeal often lead to protracted proceedings, which frequently last several years. Arbitration proceedings are generally limited to only one level of jurisdiction. There is only one possibility to apply to set aside an award, and that is before the Swiss Federal Supreme Court. The grounds to set aside an award are essentially limited to procedural misconduct. In terms of merits of a case, an award can only be set aside on the ground of arbitrariness, for which the Swiss Federal Supreme Court has defined a very high threshold.</li>
<li>Flexibility: Arbitration allows the parties, together with the arbitral tribunal, to adapt the rules and conduct of the proceedings to the nature and circumstances of the dispute at hand. This allows for flexible and efficient dispute resolution, especially in cases where a large number of parties are involved in corporate law disputes, e.g. the company itself, the company&#8217;s board of directors, the board members or the shareholders. Rules of civil procedure applicable in state court proceedings such as the Swiss Civil Procedure Code (CPC) are designed for adversarial proceedings between two parties and may not sufficiently take into account the possible involvement of third parties. Arbitration proceedings allow for flexible and efficient solutions to enable third parties to participate efficiently.</li>
<li>Confidentiality: Another advantage of arbitration over state court proceedings is its confidentiality. Without the consent of all parties, there are neither public hearings nor publicly accessible judgments in arbitration proceedings. This allows disputes to be settled without proprietary business information becoming publicly accessible.</li>
<li>Expertise of the arbitrators: In arbitration proceedings, parties may select their arbitrators based on their expertise. In contrast, a judge in state court proceedings is often assigned randomly without regard to his or her experience or expertise.</li>
</ul>
In addition, there are other advantages of arbitration proceedings, such as simplified enforcement abroad, which may also be relevant in corporate law disputes, especially in the case of liability actions against (former) board members domiciled abroad.
<h4>4. Framework for Arbitration Clauses in Articles of Association: article 697n CO and the Supplemental Swiss Rules of the Swiss Arbitration Centre</h4>
As mentioned above, article 697n(1) CO will provide as of 2023 that articles of association of corporations may provide for corporate law disputes to be resolved by arbitration proceedings in Switzerland.
An arbitration clause included in articles of association must therefore provide for a seat of the arbitration in Switzerland.
Pursuant to article 697n(2) CO, the provisions of Part 3 of the CPC applicable to domestic arbitration shall apply to the proceedings before the arbitral tribunal; Chapter 12 of the Swiss Private International Law Act is thus not applicable, even in cases where a party does not have his or her residence or its seat in Switzerland. Unlike for contractual arbitration clauses, there is no option to choose between the two statutes for arbitration clauses in articles of association.
However, there is a choice for arbitration clauses in articles of association regarding the applicable procedural rules. This is stated in article 697n(3) CO, according to which the articles of association may determine the particularities of the arbitration proceedings, in particular by reference to arbitration rules. The articles of association can thus determine the applicable procedure themselves (so-called ad hoc arbitration). In practice, references to institutional arbitration rules of well-known arbitration institutions are likely to be more common.
In order to take the peculiarities of arbitration proceedings on corporate law disputes into account, the Swiss Arbitration Centre has just issued Supplemental Swiss Rules to the Swiss Rules. These Supplemental Swiss Rules are the first rules issued specifically for corporate law disputes of Swiss corporations. The Supplemental Swiss Rules apply to corporate law disputes if an arbitration clause in articles of association refers to the Swiss Rules.
<h4>5. The Scope of Arbitration Clauses in Articles of Association</h4>
An arbitration clause in articles of association must specify which disputes are subject to resolution by arbitration. As a rule, articles of association will likely refer to the term «corporate law dispute» used in article 697n(1) CO, which is also the basic assumption of the Supplemental Swiss Rules. In this case, the arbitration clause covers all disputes concerning claims that have their legal basis in a corporate relationship. In particular, these include the following actions:
<ul>
<li>challenges against resolutions of the shareholders&#8216; meeting,</li>
<li>declaratory actions regarding the nullity of resolutions of the shareholders&#8216; meeting and the board of directors,</li>
<li>actions for measures in case of defects in the organization of the company,</li>
<li>actions for the convocation of a shareholders&#8216; meeting,</li>
<li>actions for information and inspection,</li>
<li>actions for the appointment of a special auditor,</li>
<li>actions for the return of benefits,</li>
<li>liability actions against board members of the company,</li>
<li>actions for the dissolution of the company.</li>
</ul>
The articles of association may also restrict the scope of the arbitration clause and exclude certain corporate law disputes from the jurisdiction of the arbitral tribunal. According to the model statutory arbitration clause proposed by the Swiss Arbitration Centre in connection with the Supplemental Swiss Rules, corporate law disputes subject to summary proceedings pursuant to article 250(c) CPC are excluded. The reason for this is that unlike an arbitral tribunal, the state court can also order enforcement measures, as is customary in this kind of proceedings. It is, however, not permissible to include disputes other than corporate law disputes within the scope of the arbitration clause in articles of association such as contractual disputes in connection with a shareholders&#8216; agreement. That being said, shareholders&#8216; agreements often contain a (contractual) arbitration clause.
Arbitration clauses in articles of association are in principle binding on all persons subject to the articles of association, i.e. specifically: the company, the company&#8217;s board of directors, the board members and the shareholders (as well as the participation certificate holders). Pursuant to article 697n(1) CO, the articles of association may limit the scope of the arbitration clause and only subject certain groups of persons, e.g. the shareholders or certain categories of shareholders, to the jurisdiction of an arbitral tribunal and exempt others from it. Such restrictions are delicate from a corporate law and procedural perspective and are therefore not to be recommended. By contrast, arbitration clauses in articles of association are not binding on persons not subject to the articles of association, such as the company&#8217;s creditors.
<h4>6. Procedural Aspects of Arbitration Proceedings based on Arbitration Clauses included in Articles of Association</h4>
As mentioned, the articles of association may specify the details of the arbitration proceedings, in particular by referring to institutional arbitration rules (article 697n(3) CO). Statutory law merely requires that the articles of association or the chosen arbitration rules ensure that persons who may be directly affected by the award are informed of the commencement and termination of the proceedings, may participate in the appointment of the arbitral tribunal and may intervene in the proceedings (article 697n(3) CO).
With the newly introduced Supplemental Swiss Rules, the Swiss Arbitration Centre has provided a pragmatic solution to procedural issues arising in connection the arbitration proceedings in the corporate law context. The Supplemental Swiss Rules complement the existing Swiss Rules, which are widely recognized for the resolution of commercial disputes. The Supplemental Swiss Rules provide in particular the following solutions for arbitration proceedings in the corporate law context:
<ul>
<li>Information on the Commencement and Termination of the Arbitration Proceedings: The Supplemental Swiss Rules provide that the persons potentially affected by the future award be informed about the commencement and termination of the proceedings, as required by article 697n(3) CO (see article 2 Supplemental Swiss Rules). In particular, this concerns corporate law disputes that affect persons who do not themselves participate in the proceedings as claimant or respondent, e.g. shareholders in proceedings brought by other shareholders to challenge resolutions of the shareholders&#8216; meeting. According to the Supplemental Swiss Rules, the company must inform persons who may be directly affected by the award within five days of the commencement of the proceedings. The five-day period is intended to ensure that persons who may be affected by the award can participate in the proceedings in a timely manner and express their view on the appointment of the arbitral tribunal.</li>
<li>Appointment of the Arbitral Tribunal: The new Supplemental Swiss Rules contain a provision on the appointment of the arbitral tribunal, which differs slightly from the Swiss Rules (see article 3 Supplemental Swiss Rules). The Supplemental Swiss Rules in particular provide that possibly affected persons may express their views on the appointment of the arbitral tribunal (article 3(2) Supplemental Swiss Rules).</li>
<li>Participation of Third Persons: As mentioned, an essential feature of corporate law disputes is the possible involvement of third persons who do not themselves participate in the proceedings as claimant or respondent, but who may be affected by the award. The Supplemental Swiss Rules refer to the Swiss Rules regarding the participation of third persons (article 4 Supplemental Swiss Rules). Article 4 Supplemental Swiss Rules, however, specifies that the arbitral tribunal, when deciding on the admission of such third persons to the proceeding, must in particular consider the legal effect of a future award on such third parties.</li>
<li>Information Regarding the Course of the Arbitration Proceedings: According to the Supplemental Swiss Rules, possibly affected persons may request the contact details of the arbitral tribunal and submit a request to the arbitral tribunal for information on the course of the proceedings and for access to the file (article 5 Supplemental Swiss Rules). To that end, the third person must provide evidence that he or she is actually potentially affected within the meaning of article 697n(3) CO.</li>
</ul>
<h4>7. Configuration of Arbitration Clauses in Articles of Association</h4>
An arbitration clause (contractual or in articles of association) must express unequivocally that a dispute is submitted to the jurisdiction of an arbitral tribunal rather than to state court jurisdiction. Furthermore, the arbitration clause must designate the disputes to be submitted to arbitration in terms that allow for a determination which disputes are submitted to arbitration and which are not. In addition to that, an arbitration clause in articles of association must also safeguard the particular procedural rights of potentially affected persons as provided for in article 697n(3) CO. Otherwise, the company is free to draft the arbitration clause and it can establish suitable procedural rules and tailor the arbitration clause in particular to the structure of its shareholding. In this respect, the revised law on corporations and the Supplemental Swiss Rules allow for a large flexibility.
Most companies are likely to use the model statutory arbitration clause of the Swiss Arbitration Centre recommended in the context of the Supplemental Swiss Rules. This clause allows the companies to easily subject the relevant corporate law disputes to arbitration. The recommended contents of the model statutory arbitration clause are as follows:
<h5>1 Any corporate law dispute, excluding matters subject to summary proceedings pursuant to Article 250(c) of the Swiss Civil Procedure Code [and excluding actions for cancellation of outstanding equity shares according to the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading], 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. 
2 The seat of the arbitration shall be … (name of the company seat/other city in Switzerland) 
3 The arbitration proceedings shall be conducted in … (insert desired language).</h5>
&nbsp;
In addition, the Swiss Arbitration Centre provides for selected possible additions to the arbitration clause, which the company may – but is not obliged to – adopt in its articles of association. For example, the articles of association may adopt the following additions:
<h5>4 The number of arbitrators shall be («one», «three», «one or three»). 
5 The Arbitration Court of the Swiss Arbitration Centre shall appoint the (arbitrator) / (arbitrators and designate the presiding arbitrator). 
6 The company and the members of the company’s governing bodies shall submit all disputes falling under the present arbitration clause to arbitration and shall object to the jurisdiction of the state courts over such disputes to the extent that any actions relating to such disputes are initiated before them. 
7 The arbitral tribunal may, at the request of a claimant who is a shareholder of the company, order the company to pay the costs of the arbitration provided that, based on the facts and the applicable law, the claimant had reasonable cause to file the action and provided that the action does not conflict with predominant interests of the company. 
8 The arbitral tribunal may order the company to pay any deposit of costs pursuant to Article 41 of the Swiss Rules and to advance the costs reasonably incurred or estimated to be incurred by a claimant who is a shareholder of the company for legal representation and legal assistance. 
9 All notifications regarding the commencement and the termination of the arbitration proceedings shall be delivered pursuant to and in the form provided for in the Supplemental Swiss Rules for Corporate Law Disputes. In addition, delivery shall be made via postal service and e-mail to all serviceable addresses and authorized recipients that have been provided by shareholders of the company for this purpose. 
10 The emergency relief proceedings pursuant to Article 43 of the Swiss Rules shall not apply.</h5>
&nbsp;
Which of these additional elements or which further additions should be included in the articles of association depends on the individual case and must be decided in consideration of all circumstances relevant to the company.
If you have any questions relating to arbitration clauses to be included in articles of association or regarding arbitration proceedings based on such arbitration clauses, our experts will be glad to assist.<a href="#_ftnref1" name="_ftn1"></a>
&nbsp;

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New Supplemental Swiss Rules for Corporate Law Disputes

<h4>Overview</h4>
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 <a href="https://www.homburger.ch/en/insights/revision-swiss-international-arbitration-law" target="_blank" rel="noopener">here</a>). Another one was the reorganization of Swiss Chambers&#8216; 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&#8217;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.
<h4>Swiss Chambers&#8216; Arbitration Institution becomes the Swiss Arbitration Centre</h4>
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&#8217;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&#8217;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.
<h4>Revised Swiss Rules of International Arbitration</h4>
In the context of the conversion of SCAI to the Centre, SCAI&#8217;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:
<ul>
<li>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.</li>
<li>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).</li>
<li>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.</li>
</ul>
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 &#8230; (&#8218;one&#8216;, &#8218;three&#8216;, &#8218;one or three&#8216;); 
The seat of the arbitration shall be &#8230; (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.
<h4>Swiss Arbitration – a new portal for arbitration and ADR</h4>
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 <a href="https://swissarbitration.org/" target="_blank" rel="noopener">www.swissarbitration.org</a> 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&#8217;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.
<h4>Conclusion: Strengthening of Switzerland as arbitration venue</h4>
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&#8217;s case as an arbitration and mediation venue under the Swiss Rules, the ICC Rules or any other institutional or ad hoc rules.

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On May 20, 2025, an arbitral tribunal seated in Geneva dismissed nearly the entirety of a multi-billion-dollar claim filed by a Lebanese-owned mobile telecommunications operator against the Republic of South Sudan. The claim concerned telecommunications licenses issued prior to South Sudan&#8217;s independence in 2005.
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Alpiq and Bouygues Construction initiated <a href="https://www.alpiq.com/alpiq-group/media-relations/media-releases/media-release-detail/bouygues-construction-expands-its-arbitration-claim-against-alpiq" target="_blank" rel="noopener">arbitration proceedings</a> against each other in 2019 to resolve their disputes regarding the post-closing purchase price adjustment and alleged breaches of representations and warranties, with a total amount in dispute of approximately CHF 320 m. The matter was placed before a Swiss arbitral tribunal constituted under the Swiss Rules of International Arbitration comprising Prof. Sébastien Besson (Chairperson), Dr. Roberto Dallafior and Dr. Urs Weber-Stecher. It involved the analysis of complex accounting and valuation issues. On December 22, 2020, Alpiq announced that the parties had reached a <a href="https://www.alpiq.com/alpiq-group/media-relations/media-releases/media-release-detail/arbitration-proceedings-settled" target="_blank" rel="noopener">settlement</a> under which Alpiq agreed to refund CHF 54.5 m to Bouygues Construction.
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