Most important innovations of the revised law

Scope of application

Contrary to previous case law of the SFSC, the revised PILA clarifies that its rules on international arbitral proceedings apply if at least one party to the arbitration clause was not seated or resident or had its usual place of residence in Switzerland at the time the arbitration clause was concluded. Previously, the SFSC only looked at the parties of the arbitral proceedings.

Form requirements

The same form requirements (in writing or text form) apply to the arbitration clause, any opt-out in favour of the Swiss Civil Procedural Code and any waiver of legal remedies.

Unilateral Arbitration Clauses

It is now expressly regulated by law that arbitration clauses can be validly included in unilateral legal acts such as articles of association of corporations, trust deeds or testamentary dispositions.

Appointment and composition of Arbitral Tribunal

The PILA now contains specific provisions on the appointment of the arbitral tribunal in the absence of an agreement between the parties as well as the challenge and recusal of members of the arbitral tribunal.

It has further been clarified that:

  • in case of an arbitration among more than two parties, the state court, if asked to appoint a member of the arbitral tribunal in lieu of a party which failed to appoint its member in time, may appoint in its discretion either all members of the arbitral tribunal or only those that were to be appointed by the defaulting party;
  • any (potential) member of the arbitral tribunal is obliged to disclose any circumstances which may reasonably raise doubts with respect to its independence and impartiality; and
  • a party may only move to disqualify a member of the arbitral tribunal which it nominated or whose nomination it approved if the reason for the objection was, by exercising due care, not apparent prior to the appointment of the relevant arbitrator.

Breaches of procedural rules

For any breach of procedural rules during the arbitral proceedings, an objection must be immediately raised, otherwise the breach may not be invoked at a later stage.

Assistance by State Courts (juge d’appui)

Besides arbitral tribunals, also the parties themselves may now apply to the juge d’appui for enforcement measures on the back of provisional or conservatory orders rendered by the arbitral tribunal.

Further, in addition to arbitral tribunals, also the parties themselves may now petition the state court for assistance with the taking of evidence. If the state court is asked to assist an arbitral tribunal with the taking of evidence, the state court may use all forms of evidence provided in the arbitration agreement, even if such forms of evidence are not available under Swiss domestic procedural laws.

Legal remedies against the award

Provisions on correction of clerical errors, explanations of unclear orders and supplementation of an erroneously incomplete arbitral award were introduced.

The grounds for a setting aside of the award remained unchanged and continue to be very limited. It has however been clarified that a setting aside application may be filed with the SFSC independent of the amount in dispute.
In addition, rules on the revision of arbitral awards which were so far based on case law have been codified.

Possibility of setting aside applications to SFSC in English

One of the most important alterations for the practice is that briefs and submissions in setting aside proceedings before the SFSC can now also be submitted in English. However, requests to the juge d’appui still need to be filed in one of the official languages at the seat of the court.

Waiver of legal remedies

Parties may in principle waive in advance all legal remedies available against an arbitral award if none of the parties has seat or domicile in Switzerland. However, the right to request a revision of an award on which criminal influence was exercised cannot be waived.

Conclusion

The revision and modernization of Switzerland's international arbitration law further increase Switzerland's attractiveness as a seat for international arbitration. In particular the possibility to address the SFSC in English, the predominant language in international arbitration proceedings, is a welcome innovation.

Should you have any questions on the above, please do not hesitate to contact the Loyens & Loeff Litigation & Risk Management team.