Published by Global Legal Group, in association with CDR, with contributions from:

The International Comparative Legal Guide to:

A practical cross-border insight into international arbitration work

14th Edition

International Arbitration 2017

ICLGAccuracyAli Budiardjo, Nugroho, ReksodiputroAlixPartnersAndersen Tax & LegalAnderson Mori & TomotsuneAttorneys at law Ratiolex LtdBaker McKenzieBDO LLPBekina, Škurla, Durmiš and Spajić Ltd.Bizlink LawyersBMT LAWBoss & Young, Attorneys-at-LawBRISDETBrödermann Jahn RA GmbHCases & LacambraChristophe Dugué – AvocatCMS Cameron McKennaCosta e Tavares Paes Advogados

DLA Piper UK LLPDr. Colin Ong Legal ServicesDuff & PhelpsEric Silwamba, Jalasi and Linyama Legal PractitionersFreshfields Bruckhaus Deringer LLPGeorgiev, Todorov & Co.Gregoriou & Associates Law FirmHFWHomburgerKachwaha and PartnersKönig Rebholz ZechbergerLinklaters LLPLoyens & Loeff Luxembourg S.à.r.l.MathesonMoroglu ArsevenNjeri Kariuki AdvocateNorburg & Scherp

Paul, Weiss, Rifkind, Wharton & Garrison LLPPopovici Niţu Stoica & AsociaţiiPortolano Cavallo Studio LegalePUNUKA Attorneys & SolicitorsRojs, Peljhan, Prelesnik & partnersSalazar & AsociadosSBH Law OfficeSecretariat InternationalSedgwick Chudleigh Ltd.Weber & Co.Williams & Connolly LLPWilmer Cutler Pickering Hale and Dorr LLP

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720

DisclaimerThis publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

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The International Comparative Legal Guide to: International Arbitration 2017

General Chapters:

Asia Pacific:

1 Class, Collective and Mass Arbitrations – Charlie Caher & Jonathan Lim, Wilmer Cutler Pickering Hale and Dorr LLP 1

2 Pre-award Interest, and the Difference Between Interest and Investment Returns – Gervase MacGregor & David Mitchell, BDO LLP 8

3 Effective Use of Financial Experts in Arbitration – Kathryn Britten & Greg Huitson-Little, AlixPartners 11

4 What to Know Before Going Into Arbitration – Carl Jenkins & A. Scott Davidson, Duff & Phelps 175 Construction Damages in International Arbitration – Theodore E. Needham III & Mark Baker,

Secretariat International 216 Arbitrating in New York: The NYIAC Advantage – James H. Carter & John V.H. Pierce,

Wilmer Cutler Pickering Hale and Dorr LLP 277 Independent Review of a Claim by Experts: Its Rise in Popularity and Benefits –

Anthony Theau-Laurent & Jonathan Ellis, Accuracy 318 The Toolbox of International Arbitration Institutions: How to Make the Best of It? –

Professor Dr. Eckart Brödermann & Dr. York Zieren, Brödermann Jahn RA GmbH 35

9 Overview Dr. Colin Ong Legal Services: Dr. Colin Ong, QC 4010 Australia HFW: Nick Longley & Brian Rom 5411 Brunei Dr. Colin Ong Legal Services: Dr. Colin Ong, QC 6412 China Boss & Young, Attorneys-at-Law: Dr. Xu Guojian 7313 Hong Kong HFW: Peter Murphy & Fergus Saurin 8514 India Kachwaha and Partners: Sumeet Kachwaha & Dharmendra Rautray 9415 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Sahat A.M. Siahaan &

Ulyarta Naibaho 10516 Japan Anderson Mori & Tomotsune: Yoshimasa Furuta & Aoi Inoue 11617 Singapore HFW: Paul Aston & Suzanne Meiklejohn 12418 Vietnam Bizlink Lawyers: Do Trong Hai & Nguyen Duc Manh 135

Continued Overleaf

Preface: Preface by Gary Born, Chair, International Arbitration Practice Group,

Wilmer Cutler Pickering Hale and Dorr LLP

Central and Eastern Europe and CIS: 19 Overview Wilmer Cutler Pickering Hale and Dorr LLP: Franz T. Schwarz &

Krystyna Khripkova 14420 Austria Weber & Co.: Stefan Weber & Katharina Kitzberger 15421 Belarus SBH Law Office: Timour Sysouev & Alexandre Khrapoutski 16322 Bulgaria Georgiev, Todorov & Co.: Georgi Georgiev & Tzvetelina Dimitrova 17423 Croatia Bekina, Škurla, Durmiš and Spajić Ltd.: Hrvoje Spajić & Ivana Ostojić 18424 Greece Gregoriou & Associates Law Firm: Stelios H. Gregoriou 19225 Romania Popovici Niţu Stoica & Asociaţii: Florian Nițu & Raluca Petrescu 20026 Russia Freshfields Bruckhaus Deringer LLP: Noah Rubins & Alexey Yadykin 21027 Slovenia Rojs, Peljhan, Prelesnik & partners: David Premelč & Timotej Kozar 22628 Turkey Moroglu Arseven: Orçun Çetinkaya & Burak Baydar 23629 Ukraine CMS Cameron McKenna: Olexander Martinenko & Andriy Stetsenko 245

Western Europe: 30 Overview DLA Piper UK LLP: Ben Sanderson & Elinor Thomas 25431 Andorra Cases & Lacambra: Sheila Muñoz Muñoz & Miguel Cases Nabau 258

Contributing Editors Steven Finizio and Charlie Caher, Wilmer Cutler Pickering Hale and Dorr LLP

Sales DirectorFlorjan Osmani

Account DirectorOliver Smith

Sales Support ManagerPaul Mochalski

Sub EditorOliver Chang

Senior EditorsSuzie Levy, Rachel Williams

Chief Operating OfficerDror Levy

Group Consulting EditorAlan Falach

PublisherRory Smith

Published byGlobal Legal Group Ltd.59 Tanner StreetLondon SE1 3PL, UKTel: +44 20 7367 0720Fax: +44 20 7407 5255Email: info@glgroup.co.ukURL: www.glgroup.co.uk

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Printed byAshford Colour Press LtdJuly 2017

Copyright © 2017Global Legal Group Ltd.All rights reservedNo photocopying

ISBN 978-1-911367-63-5ISSN 1741-4970

Strategic Partners

The International Comparative Legal Guide to: International Arbitration 2017

Western Europe, cont.:

32 Belgium Linklaters LLP: Joost Verlinden & Matthias Schelkens 26833 England & Wales Wilmer Cutler Pickering Hale and Dorr LLP:

Charlie Caher & John McMillan 27834 Finland Attorneys at law Ratiolex Ltd: Timo Ylikantola & Tiina Ruohonen 29435 France Christophe Dugué – Avocat: Christophe Dugué 30236 Germany DLA Piper UK LLP: Dr. Frank Roth & Dr. Daniel H. Sharma 31137 Ireland Matheson: Nicola Dunleavy & Gearóid Carey 32038 Italy Portolano Cavallo Studio Legale: Micael Montinari &

Luca Salamone 33039 Liechtenstein König Rebholz Zechberger: MMag. Benedikt König &

Dr. Helene Rebholz 34040 Luxembourg Loyens & Loeff Luxembourg S.à.r.l.: Véronique Hoffeld 34941 Netherlands BRISDET: Fanny-Marie Brisdet & Bo Pietersz 35742 Spain Andersen Tax & Legal: Iñigo Rodríguez-Sastre &

Elena Sevila Sánchez 36743 Sweden Norburg & Scherp: Fredrik Norburg & Pontus Scherp 37544 Switzerland Homburger: Felix Dasser & Balz Gross 382

Latin America: 45 Overview Baker McKenzie: Luis M. O’Naghten 39346 Bolivia Salazar & Asociados: Ronald Martin-Alarcon &

Rodrigo Jimenez-Cusicanqui 40647 Brazil Costa e Tavares Paes Advogados: Vamilson José Costa &

Antonio Tavares Paes Jr. 413

Middle East / Africa:

48 Overview – MENA Freshfields Bruckhaus Deringer LLP: Sami Tannous & Amr Omran 42149 Overview –

Sub-Saharan Africa Baker McKenzie: Gerhard Rudolph & Michelle Wright 42850 Kenya Njeri Kariuki Advocate: Njeri Kariuki 43151 Nigeria PUNUKA Attorneys & Solicitors: Elizabeth Idigbe &

Emuobonuvie Majemite 43852 Sierra Leone BMT LAW: Glenna Thompson 45453 South Africa Baker McKenzie: Gerhard Rudolph & Michelle Wright 46154 United Arab Emirates Freshfields Bruckhaus Deringer LLP: Sami Tannous & Amr Omran 47155 Zambia Eric Silwamba, Jalasi and Linyama Legal Practitioners:

Joseph Alexander Jalasi, Jr. & Eric Suwilanji Silwamba, SC 484

North America: 56 Overview Paul, Weiss, Rifkind, Wharton & Garrison LLP:

H. Christopher Boehning & Priyanka Timblo 49357 Bermuda Sedgwick Chudleigh Ltd.: Mark Chudleigh & Alex Potts 50158 Canada Baker McKenzie: Matthew J. Latella & Christina Doria 51159 USA Williams & Connolly LLP: John J. Buckley, Jr. & C.J. Mahoney 520

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Chapter 44

Homburger

Felix Dasser

Balz Gross

Switzerland

1.3 What has been the approach of the national courts to the enforcement of arbitration agreements?

Swiss courts are legally required to enforce valid arbitration agreements regarding an arbitrable dispute (Article 7, PILA) and traditionally tend to be arbitration-friendly. Pathological clauses are often saved by a liberal construction, except when they are truly beyond redemption (for example, 4A_676/2014).

2 Governing Legislation

2.1 What legislation governs the enforcement of arbitration proceedings in your jurisdiction?

The New York Convention (NYC) of June 10, 1958 on the Recognition and Enforcement of Foreign Arbitral Awards governs the enforcement of awards of arbitral tribunals having their seat outside of Switzerland (cf. Article 194, PILA). Swiss arbitral awards (awards of arbitral tribunals with a Swiss seat) are enforced in Switzerland in the same manner as judgments of Swiss courts. To the extent not provided for by the NYC or the PILA, the procedure of enforcement is subject to the provisions of Articles 335 et seqq. of the Civil Procedure Code (CPC), in force since January 1, 2011, and, with regard to awards for payment, the provisions of the Federal Act on Debt Collection and Bankruptcy.

2.2 Does the same arbitration law govern both domestic and international arbitration proceedings? If not, how do they differ?

International arbitration proceedings that have their seat in Switzerland are governed by the PILA. An arbitration is deemed international if at least one of the parties to the proceedings was neither domiciled in, nor a resident of, Switzerland when the arbitration agreement was concluded. In the case of assignment of an agreement, the domicile of the original signatory, not of the assignee, is relevant.All other (domestic) Swiss arbitral proceedings are governed by Articles 353 et seqq. of the CPC if commenced after January 1, 2011.The CPC provides for a modern arbitration framework which is, to a large extent, equivalent to the rules governing international arbitrations. In particular, the form of the arbitration clause is governed by the same rule that applies to international arbitration proceedings (Article 358 para. 1, CPC). The arbitrators in domestic

1 Arbitration Agreements

1.1 What, if any, are the legal requirements of an arbitration agreement under the laws of your jurisdiction?

For international arbitration proceedings (cf. question 2.2 below), Article 178 of the Federal Act on Private International Law, 1987 (PILA) provides that the arbitration agreement must be in text form and must comply as to substance with one of three sets of potentially applicable laws.First, as to form, the arbitration agreement must be in a form allowing it to be evidenced by a text or texts originating from all parties to be bound by the arbitration agreement, e.g. as part of a written contract, or a telegram, telex, fax or email exchange. The arbitration agreement need not be signed by the parties. As per the recent draft proposed by the Swiss Federal Council on the revision of Chapter 12 of the PILA on January 11, 2017, an arbitration agreement would be valid even if the form is fulfilled by only one party; i.e., an arbitration agreement can be validly entered into if the arbitration clause is contained in a written offer submitted to the counter party, who accepts it orally or tacitly. As to substance, Article 178 para. 2 provides that the arbitration agreement must comply with either the law chosen by the parties, the law applicable to the subject matter of the dispute, or Swiss law. The validity of the arbitration agreement cannot be challenged on the grounds that the underlying contract is invalid or that the arbitration agreement applies to a dispute that had not yet arisen at the time of execution. At a minimum, the text of the arbitration agreement must indicate the parties’ intention to submit their dispute to arbitration (in particular, by mentioning the word “arbitration”) and specify the dispute, or legal relationship, to be decided by arbitration.

1.2 What other elements ought to be incorporated in an arbitration agreement?

The arbitration agreement should determine the seat of the arbitration (preferably a specific city). It is further advisable to determine the language of the proceedings, the number of arbitrators and the procedure for their appointment.If none of the parties have their domicile, habitual residence or business establishment in Switzerland, then the parties may also, if they so wish, include an express statement in the arbitration agreement that they agree to waive any action for annulment proceedings against the award or limit the grounds under which such an action may be brought (cf. question 2.4 below).

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way of an interim award or at the time it decides on the merits of the dispute (Article 186, PILA). It may do so notwithstanding an action on the same matter between the same parties already pending before a state court or another arbitral tribunal, unless there are serious reasons to stay the proceedings.

3.3 What is the approach of the national courts in your jurisdiction towards a party who commences court proceedings in apparent breach of an arbitration agreement?

At the request of one of the parties, Swiss courts readily decline jurisdiction in favour of arbitration based on a prima facie examination of the validity of the arbitration agreement if the seat of the arbitral tribunal is in Switzerland (the subsequent decision by the tribunal on its own jurisdiction based on the concept of competence-competence (Article 186, PILA) is then subject to full review within the framework of setting-aside proceedings). Only if the summary examination clearly shows that the arbitration agreement is null and void, inoperative or incapable of being performed, or if the defendant appeared without reservation, do the state courts accept jurisdiction (Article 7, PILA). By contrast, if the seat of the tribunal is abroad, the examination of the validity by the court is thorough. This distinction has been the subject of a parliamentary motion filed in 2008 (cf. question 15.2 below).

3.4 Under what circumstances can a national court address the issue of the jurisdiction and competence of an arbitral tribunal? What is the standard of review in respect of a tribunal’s decision as to its own jurisdiction?

The arbitral tribunal’s award regarding its own jurisdiction can be appealed to the Swiss Federal Supreme Court unless the parties have waived the right to such appeal (Article 190 para. 3, PILA). The Federal Supreme Court fully reviews the application of the laws on jurisdiction by the arbitral tribunal. Conversely, the Swiss Federal Supreme Court held that the tribunal’s decision of its own jurisdiction based on a factual finding of an actual meeting of the minds of the parties cannot be reviewed by the Federal Supreme Court at the appeals stage (4A_84/2015).In addition, state courts address the issue of the jurisdiction and competence of the arbitral tribunal if a lawsuit is filed with a court regarding a matter covered by an arbitration agreement providing for arbitration in Switzerland (cf. question 3.3 above). State courts also make a prima facie review of the arbitral tribunal’s jurisdiction and competence if they are asked to assist in the nomination of arbitrators, the enforcement of interim measures or the taking of evidence.A foreign tribunal’s jurisdiction and competence may be examined in enforcement proceedings under the NYC.

3.5 Under what, if any, circumstances does the national law of your jurisdiction allow an arbitral tribunal to assume jurisdiction over individuals or entities which are not themselves party to an agreement to arbitrate?

According to precedent, a written agreement to arbitrate may exceptionally be extended to non-signatories if one of the laws that are potentially applicable to the substance of the arbitration agreement so provides (cf. question 1.1 above), or if justified, as the case may be, by international trade usage. In cases where Swiss law applies, an extension to a non-signatory may be justified if the latter intervened in the conclusion or performance of the main contract in such a way that the party seeking the extension had legitimate reasons to assume that the non-signatory intended to become a party

proceedings are also competent to order interim relief (Article 374, CPC) and have jurisdiction to hear a set-off defence, irrespective of whether the cross-claim is within the scope of the arbitration clause or subject to another agreement to arbitrate or a forum-selection clause (Article 377, CPC). Finally, a motion to set aside can be brought against the award directly to the Federal Supreme Court (Article 389 para. 1). Parties may opt out of the CPC in favour of the PILA (Article 353 para. 2, CPC and vice versa, cf. Article 176 para. 2, PILA).

2.3 Is the law governing international arbitration based on the UNCITRAL Model Law? Are there significant differences between the two?

Switzerland made a conscious decision not to adopt the Model Law, but rather to devise an even more liberal framework for international arbitration adapted to the already existing international arbitration practice in Switzerland. The pertinent Chapter XII of the PILA contains only 19 articles as compared to the Model Law’s 36, leaving more leeway for party autonomy. Nevertheless, there are no fundamental differences between the two.

2.4 To what extent are there mandatory rules governing international arbitration proceedings sited in your jurisdiction?

As mentioned above, most PILA rules can be modified by the parties’ agreement (or, based on that, by the arbitrators), and only very few are considered mandatory. For example, the statutory right to file a motion before the Swiss Federal Supreme Court to set aside the award (Article 190, PILA) can be waived ex ante if none of the parties are Swiss (Article 192, PILA cf. question 10.2 below). Similarly, the arbitral tribunal is not obliged to check ex officio whether the requirements for the form of the arbitration agreement are fulfilled.Among the mandatory rules are those that ensure due process and equal treatment, i.e. the rule requiring independence and impartiality of the arbitrators (Article 180 para. 1 c, PILA) and the rule allowing the challenge of arbitrators (Article 180 para. 2, PILA). The rule at Article 182 para. 3, PILA ensuring equal treatment and the right to be heard in adversarial proceedings, is also mandatory. Furthermore, the provision on arbitrability (Article 177, PILA) (cf. question 3.1 below) cannot be modified by the parties, and the same is true for the rule defining lis pendens (Article 181, PILA) and the provision giving the state court judge authority to render judicial assistance (Article 185, PILA).

3 Jurisdiction

3.1 Are there any subject matters that may not be referred to arbitration under the governing law of your jurisdiction? What is the general approach used in determining whether or not a dispute is “arbitrable”?

In international arbitrations with their seat in Switzerland, the issue of arbitrability is exclusively governed by Article 177, PILA, which provides that any dispute of economic interest can be the subject of an arbitration. The courts interpret the term “economic interest” in a very broad manner, favouring a finding that a matter is arbitrable. For example, competition and antitrust matters are arbitrable, as well as expropriation matters and employment law, irrespective of what the law applicable to the subject matter of the dispute says.

3.2 Is an arbitral tribunal permitted to rule on the question of its own jurisdiction?

The arbitral tribunal decides on its own jurisdiction and can do so by

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chosen by the parties may be applied. This concerns matters of public policy such as, in particular, anti-trust laws that may void a contract. Such public policy rules must have a close connection with the dispute and must appear to be reasonable and appropriate from a transnational perspective. Further, the law having the closest connection with a particular non-contractual aspect of the dispute may apply to such aspect, such as the standing to sue or be sued of a legal entity or the effect of bankruptcy on pending arbitration proceedings.

4.3 What choice of law rules govern the formation, validity, and legality of arbitration agreements?

Swiss arbitration law follows the principle of favor validitatis. The arbitration agreement is valid if it conforms: (i) to the law chosen by the parties for the arbitration agreement; (ii) to the law applicable to the substance of the dispute; or (iii) to Swiss law as lex arbitri (Article 178 para. 2, PILA, cf. question 1.1 above).According to the principle of separability, the arbitration clause of a contract is generally considered to be valid and binding even if the main contract is invalid or non-existent (Article 178 para. 3, PILA).

5 Selection of Arbitral Tribunal

5.1 Are there any limits to the parties’ autonomy to select arbitrators?

The law expressly provides that the arbitrators shall be appointed, dismissed or replaced pursuant to the parties’ agreement (Article 179, PILA). There are, in principle, no limits to the parties’ autonomy, except general limits concerning the arbitrator’s independence and impartiality. In particular, the parties are free to agree on the requested qualifications of the arbitrator, or on any number of arbitrators.

5.2 If the parties’ chosen method for selecting arbitrators fails, is there a default procedure?

The state courts at the place of the seat of the arbitral tribunal are competent to appoint (and dismiss or replace) arbitrators. If the parties have failed to designate the seat of arbitration, then the recent draft amendment to the Chapter 12 of the PILA states that it is for the courts first seized to appoint the members of the arbitral tribunal. The state courts apply, by analogy, the domestic law on the appointment of arbitrators, i.e. the CPC. In particular, the state courts follow the rules of the CPC, which provide that there will be three arbitrators, that each party will nominate an arbitrator (or, if the party fails to appoint an arbitrator, the state court on behalf of such party) and that the party-appointed arbitrators will nominate the chairperson. In the case of multi-party arbitration, the proposed revision to the PILA states that the state courts may appoint all the arbitrators.

5.3 Can a court intervene in the selection of arbitrators? If so, how?

The state courts can assist in the constitution of the arbitral tribunal at the request of one party (in particular, if one party fails to appoint an arbitrator, even though the parties have agreed on such procedure, or if the party-appointed arbitrators cannot agree on the chairperson).

to the main contract. An extension is also possible in cases of the assumption of debt or by assignment, but mere affiliation to the same group of companies is generally not sufficient.

3.6 What laws or rules prescribe limitation periods for the commencement of arbitrations in your jurisdiction and what is the typical length of such periods? Do the national courts of your jurisdiction consider such rules procedural or substantive, i.e., what choice of law rules govern the application of limitation periods?

Limitation periods are considered to be substantive, not procedural, and thus subject to the law applicable to the substance of the dispute. Such law also determines whether limitation periods need to be met by the timely commencement of arbitration (or court) proceedings or any other means of tolling or interrupting the limitation periods.In Swiss substantive law, different limitation periods exist. In contract law, the usual limitation period is 10 years. However, shorter periods may apply, such as two years in sales and five years for periodic payments and mandate fees. In tort law, the usual limitation period is one year after the creditor gained knowledge of the relevant facts and a maximum of 10 years after the tortuous act, always subject to longer periods under criminal law.

3.7 What is the effect in your jurisdiction of pending insolvency proceedings affecting one or more of the parties to ongoing arbitration proceedings?

According to the jurisprudence of the Federal Supreme Court (DFT 138 III 714), the effect of insolvency proceedings on the jurisdiction of the arbitral tribunal is subject to the law at the place of incorporation of the insolvent party, as: (i) the question of capacity to participate in the arbitral proceedings is one of jurisdiction; and (ii) a company’s legal capacity is to be determined according to the law at the place of its incorporation. If a party loses its legal capacity pursuant to the law at the place of its incorporation upon insolvency, it loses its capacity to participate in Swiss arbitration proceedings. However, contrary to previous case law, foreign provisions that only and specifically restrict the capacity to be a party to arbitration proceedings or the validity of arbitration agreements concluded by it are irrelevant to arbitrations seated in Switzerland in this regard.

4 Choice of Law Rules

4.1 How is the law applicable to the substance of a dispute determined?

The arbitral tribunal decides the merits of the dispute according to the law chosen by the parties or, in the absence of such choice, according to the law having the closest connection with the dispute (Article 187 para. 1, PILA). It is generally held that such law does not have to be a state law, but may also be rules of law such as the UNIDROIT Principles of International Commercial Contracts or general principles of law. The general conflict of law rules of the PILA are not applicable in arbitration.The parties may also authorise the tribunal to decide ex aequo et bono (Article 187 para. 2, PILA).

4.2 In what circumstances will mandatory laws (of the seat or of another jurisdiction) prevail over the law chosen by the parties?

In exceptional cases, mandatory laws of a law other than the law

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secrecy (or privilege; cf. question 8.5 below). The Professional Rules prohibit counsel from influencing witnesses, but explicitly allow them to contact witnesses in arbitral and supranational proceedings. These rules (i) also govern the conduct of Swiss counsel in proceedings sited elsewhere. In contrast, the Swiss Attorney-at-Law Act and the Swiss Professional Rules (ii) do not govern the conduct of counsel from countries other than Switzerland, as the rules are attached to lawyers registered in Switzerland. However, in order to avoid that different standards apply to the parties’ counsel, a Swiss arbitral tribunal will usually issue supplemental procedural rules on the issue by which the parties can be guided.

6.4 What powers and duties does the national law of your jurisdiction impose upon arbitrators?

In particular, the arbitrators have the power to determine the procedure to the extent that the parties have not done so (Article 182 para. 2, PILA). They can issue procedural orders, including conservatory measures and other interim relief. If necessary, they can turn to the courts at the seat of the tribunal for the enforcement of such orders and other assistance (Articles 183-185, PILA). The arbitrators’ duties include the duty of confidentiality, the duty to remain independent from and impartial to both parties and the duty to treat the parties equally.

6.5 Are there rules restricting the appearance of lawyers from other jurisdictions in legal matters in your jurisdiction and, if so, is it clear that such restrictions do not apply to arbitration proceedings sited in your jurisdiction?

The Swiss Attorneys-at-Law Act defines under which conditions a foreign lawyer may be licensed to practise law in Switzerland and appear before the Swiss courts. Generally, nationals of the Member States of the European Union or the European Free Trade Association that are admitted to practise in an EU or EFTA State can appear before a Swiss court, possibly with the consent of a lawyer registered in Switzerland.This act is not applicable to international arbitration proceedings sited in Switzerland. The parties are free to select lawyers from other jurisdictions as arbitrators or counsels. Hence, there are no restrictions on a party’s right to be represented by a person of its choice in arbitration proceedings.

6.6 To what extent are there laws or rules in your jurisdiction providing for arbitrator immunity?

There are no Swiss laws or rules granting arbitrator immunity. Instead, an arbitrator may be liable for breach of his or her duties, and the parties may not waive liability for gross negligence or wilful intent in advance. Due to the specific nature of the arbitrator’s role, it is generally stated that liability should be limited to gross negligence and wilful intent. This is also the rule of the Swiss Rules of International Arbitration (Article 45, Swiss Rules).

6.7 Do the national courts have jurisdiction to deal with procedural issues arising during an arbitration?

Apart from assistance proceedings (cf. question 8.1 below), the courts may only deal with procedural issues if the award is appealed on the grounds that the principle of equal treatment or the right to be heard were violated during the arbitration proceeding. Certain

In addition, to the extent that the parties have not agreed otherwise, the court at the place of the seat of the arbitral tribunal decides on any challenge to an arbitrator. There is no appeal against the court’s decision on such a challenge.

5.4 What are the requirements (if any) imposed by law or issued by arbitration institutions within your jurisdiction as to arbitrator independence, neutrality and/or impartiality and for disclosure of potential conflicts of interest for arbitrators?

In line with modern international standards, an arbitrator can be challenged if there are justifiable doubts as to his independence and/or impartiality. The mere appearance of a lack of independence suffices to render an arbitrator challengeable. The requirements may be slightly less strict for party-appointed arbitrators though. A party has to challenge an arbitrator as soon as it becomes aware of the grounds for the arbitrator’s challenge.The arbitrators have a pre-contractual and contractual duty to disclose potential conflicts of interest. In practice, the IBA Guidelines on Conflict of Interest are generally used as guidelines to ensure the impartiality and independence of arbitrators. The Swiss Federal Supreme Court expressly recognised that the guidelines are a valuable working tool and will influence the practice of arbitral institutions, as well as the courts.

6 Procedural Rules

6.1 Are there laws or rules governing the procedure of arbitration in your jurisdiction? If so, do those laws or rules apply to all arbitral proceedings sited in your jurisdiction?

The parties are free to determine the arbitration procedure (Article 182 para. 1, PILA). Regardless of the chosen procedure, the arbitral tribunal, however, must guarantee that each party is treated equally and granted the right to be heard in adversarial proceedings (Article 182 para. 3; cf. above, question 2.4).

6.2 In arbitration proceedings conducted in your jurisdiction, are there any particular procedural steps that are required by law?

Subject to the requirements of due process (equal treatment, right to be heard), which require that the proceedings be adversarial, and the need for a request for arbitration, the parties (and the arbitral tribunal) are free to determine the procedural steps.

6.3 Are there any particular rules that govern the conduct of counsel from your jurisdiction in arbitral proceedings sited in your jurisdiction? If so: (i) do those same rules also govern the conduct of counsel from your jurisdiction in arbitral proceedings sited elsewhere; and (ii) do those same rules also govern the conduct of counsel from countries other than your jurisdiction in arbitral proceedings sited in your jurisdiction?

Counsel from Switzerland are subject to certain provisions of the Swiss Attorneys-at-Law Act (Federal Act on the Free Movement of Lawyers, 2000), the Professional Rules of the Swiss Bar Association, and the Code of Conduct for European Lawyers. These provide, inter alia, that Swiss lawyers have an obligation of professional

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7.4 Under what circumstances will a national court of your jurisdiction issue an anti-suit injunction in aid of an arbitration?

Switzerland is a Member State of the Lugano Convention on the Recognition and the Enforcement of Judgments in Civil and Commercial Matters. As such, it is bound by the decision of the European Court of Justice in re Allianz SpA and Generali Assicurazioni Generali SpA -v- West Tankers Inc. (Case C-185/07). Accordingly, Swiss courts will not issue anti-suit injunctions to prevent a party to an arbitration agreement from commencing or continuing with a court action which it has commenced against the other party to the arbitration agreement, at least if the intended court action is to proceed before a court of a Member State of the Lugano Convention. In one of its decisions, the Federal Supreme Court has left open whether Swiss courts may order anti-suit injunctions at all (DFT 138 III 304, c. 5.3).

7.5 Does the law of your jurisdiction allow for the national court and/or arbitral tribunal to order security for costs?

Arbitral tribunals sitting in Switzerland request advances on costs to cover the costs of the arbitral proceedings (fees, expenses, etc.). In addition, Swiss law allows for an arbitral tribunal sitting in Switzerland to order a party to provide security for the parties’ costs. The order for security for costs is a special type of interim relief. Accordingly, a security for costs can be ordered if one party has a prima facie case that there is a particular risk that it will not be able to recover its costs from the other party should the arbitral tribunal award such costs. As a general rule, arbitral tribunals only order security for costs in exceptional cases. State courts in Switzerland may, and usually will, order the plaintiff to provide security for costs of the state court proceedings, but not of arbitral proceedings.

7.6 What is the approach of national courts to the enforcement of preliminary relief and interim measures ordered by arbitral tribunals in your jurisdiction and in other jurisdictions?

Article 183 para. 2, PILA provides that if a party does not comply voluntarily with the order issued by the arbitral tribunal, then the tribunal (and as per the proposed revision, even a party) may request the assistance of the competent court to the extent that such interim measure is also recognised by Swiss procedural law. Thus a tribunal sitting in Switzerland could request Swiss courts to enforce the interim measures that it has ordered, if such measures shall take effect in Switzerland. This might, however, prove of little practical use if the parties to the arbitration have no connection with Switzerland other than the fact that it is the chosen seat of their arbitration.Orders issued by arbitral tribunals seated outside Switzerland cannot benefit from court assistance provided for at Article 183 para. 2. It is also unlikely that Swiss courts would see such interim orders as foreign awards and enforce them as such, since the Swiss Federal Supreme Court has already held, in the context of a setting aside proceeding, that an order on provisional measures issued under Article 183 PILA, does not qualify as an “award” (ATF 136 III 200, c. 2.3.1). It may therefore be useful for the foreign seated tribunal to approach the local courts at the seat, which can in turn approach Swiss courts under mutual assistance mechanisms.

fundamental procedural issues may also be considered during the setting aside proceedings on the grounds of public policy.

7 Preliminary Relief and Interim Measures

7.1 Is an arbitral tribunal in your jurisdiction permitted to award preliminary or interim relief? If so, what types of relief? Must an arbitral tribunal seek the assistance of a court to do so?

The arbitral tribunal has jurisdiction to order interim measures unless the parties have agreed otherwise (Article 183 para. 1, PILA).In general, the arbitral tribunal may order whatever is necessary to protect the parties’ rights until a final award is issued. In particular, the arbitral tribunal may order any measures available under the procedural rules applicable to the arbitration proceedings, under the substantive law applicable to the dispute, or under the law of the country where the order will be enforced. It is the prevailing view, however, that an arbitral tribunal cannot order an attachment (séquestre; arrest) within the meaning of the Federal Act on Debt Collection and Bankruptcy regarding assets located in Switzerland, while it may order any other measure to secure monetary assets. An arbitral tribunal may issue an anti-suit injunction to protect the arbitration.Although interim measures ordered by the arbitral tribunal are binding on the parties to the arbitration proceeding, an arbitral tribunal does not have the powers inherent in state courts to enforce such measures. Therefore, an arbitral tribunal cannot threaten with criminal sanctions in case of non-compliance. If the party concerned does not voluntarily comply with the interim measure, the tribunal may request the assistance of the competent state court in enforcing the measure. As per the proposed revision of the PILA, in addition to the arbitral tribunal, a party may now also request the assistance of the courts in case the opposing party does not comply with the orders issued by the tribunal. The Swiss Supreme Court has not yet definitely ruled on the tribunal’s power to issue astreintes, i.e., a penalty for each day of delay.

7.2 Is a court entitled to grant preliminary or interim relief in proceedings subject to arbitration? In what circumstances? Can a party’s request to a court for relief have any effect on the jurisdiction of the arbitration tribunal?

Unless the parties have explicitly agreed otherwise, a state court can grant interim relief in proceedings that are subject to arbitration. The state court will decide on a motion for the issuance of an interim order based on its own law. Since there is parallel jurisdiction of the state courts and the arbitral tribunal, the jurisdiction is deemed to lie with the body that first received a request to issue interim measures.

7.3 In practice, what is the approach of the national courts to requests for interim relief by parties to arbitration agreements?

State courts normally will not interfere with the arbitral tribunal’s jurisdiction if the tribunal is already constituted and if a request for the issuance of interim measures is already pending with the tribunal. A state court will also not re-judge a request for interim relief that the tribunal has already disposed of. Otherwise, the state courts will treat a request for interim relief by a party to an arbitration agreement no differently from any other request for interim relief.

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8.5 What is the scope of the privilege rules under the law of your jurisdiction? For example, do all communications with outside counsel and/or in-house counsel attract privilege? In what circumstances is privilege deemed to have been waived?

In arbitration proceedings, it is unclear which law applies to issues of privilege. The arbitral tribunal tends to test privilege under more than one of the possibly applicable laws, and, in particular, to apply the rules of the jurisdiction where the document is situated, and the law of the party that is requested to disclose the material.Swiss lawyers have an obligation of professional secrecy (cf. question 6.3 above). Professional secrecy (or privilege) is the right of an attorney who is admitted to the Bar and who is acting as a lawyer (and not as a business person, member of the board, or otherwise) to refuse to give testimony or to produce a document. Privilege also applies to correspondence between a party and his/her attorney, provided that this correspondence concerns the professional legal representation of a party or a third party (Article 160 of the CPC; a clarification of this provision was enacted as of May 1, 2013). Privilege only applies to outside but not in-house counsel. It is unclear whether arbitrators have a privilege of their own. In practice, state authorities have, in certain cases, de facto respected a privilege of the arbitrators.Under Swiss law, waivers rarely occur and the intention of the waiving party to waive privilege for specific documents must be clearly established.

9 Making an Award

9.1 What, if any, are the legal requirements of an arbitral award? For example, is there any requirement under the law of your jurisdiction that the award contain reasons or that the arbitrators sign every page?

The award has to be made following the procedure, and in the form agreed to by the parties (Article 189 para. 1, PILA). Whatever the procedure chosen, the award must be rendered in an adversarial procedure, guaranteeing the parties’ equal treatment and right to be heard. If, and to the extent, no such agreement exists, the award has to be passed by a majority of the members of the arbitral panel. Absent a majority, the award may be rendered by the chairperson alone. The award has to be made in writing and has to be dated and signed by, at a minimum, the chairperson (it is not necessary to sign every page). In addition, the reasoning upon which the award was based also must be set forth, unless the parties agreed otherwise (although lack of reasoning does not render the award challengeable).

9.2 What powers (if any) do arbitral tribunals have to clarify, correct or amend an arbitral award?

Interpretation, correction and amendments to the awards are issues to be decided between the parties under their general powers to determine the arbitral proceedings. In the case of an institutional arbitration, this question may be specifically addressed by the institutional rules adopted by the parties. If no agreement has been reached between the parties, then the power of the tribunal to interpret, correct or amend the award is a question to be determined by the applicable procedural law. For domestic arbitrations in Switzerland, Article 388 (1), CPC specifically empowers the tribunal to interpret, correct or amend the

8 Evidentiary Matters

8.1 What rules of evidence (if any) apply to arbitral proceedings in your jurisdiction?

To the extent that the parties do not agree on the applicable rules, the arbitral tribunal determines the procedure at its own discretion, but subject to the principles of equal treatment of the parties and the right to be heard (Article 182, PILA).The tribunal administers evidence directly (Article 184 para. 1, PILA). It may, however, request the assistance of the state court at the seat of the tribunal (Article 184 para. 2, PILA). This state court can then request the assistance of foreign courts via letters rogatory.

8.2 What powers does an arbitral tribunal have to order disclosure/discovery and to require the attendance of witnesses?

Within the limits of the procedure agreed to by the parties, the arbitrators have discretion to order the disclosure of documents. The arbitrators cannot directly compel the party concerned to cooperate; they may, however, draw adverse inferences concerning the content of the documents concerned if they are not produced. In practice, in the interest of the efficiency and cost-effectiveness of arbitrations, Swiss arbitral tribunals only very rarely order (extensive) document production. In particular, US-style orders to produce “any and all” documents are considered alien to arbitrations in Switzerland, and generally, are not in line with party expectations. If a person who has been ordered by the arbitral tribunal to appear as a witness refuses to do so, the tribunal may seek the assistance of the state courts or, if the witness is under the control of a party, draw adverse inferences.

8.3 Under what circumstances, if any, can a national court assist arbitral proceedings by ordering disclosure/discovery or requiring the attendance of witnesses?

The state court at the seat of the tribunal may be asked by the arbitral tribunal or a party with the consent of the tribunal to assist in the taking of evidence (Article 184 para. 2, PILA). In particular, it may order and compel the production of documents or take the testimony of unwilling witnesses.

8.4 What, if any, laws, regulations or professional rules apply to the production of written and/or oral witness testimony? For example, must witnesses be sworn in before the tribunal and is cross-examination allowed?

The parties may decide upon the procedure to be followed (Article 182 para. 1, PILA). Very often, the parties and the tribunal agree to submit written witness statements as evidence. The parties are also free to submit expert reports. Witnesses and experts are usually cross-examined at a hearing. They may also be questioned by the arbitrators. They are not formally sworn in, but are made aware of their duty to tell the truth, which is protected by Swiss criminal law (perjury is a criminal offence). Swiss lawyers must not influence witnesses, but are allowed to contact them (cf. question 6.3 above). Rules concerning professional privilege are observed. Swiss lawyers have an obligation of professional secrecy (or privilege; cf. questions 6.3 above and 8.5 below). Possible conflicts between the rules applicable to the parties and their counsel are decided on a case-by-case basis.

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arbitration tribunal. They may not, however, expand the scope of review by Swiss state courts.

10.4 What is the procedure for appealing an arbitral award in your jurisdiction?

An award may only be appealed on the limited grounds listed in Article 190 para. 2 (cf. question 10.1 above), and the appeal must be directly made before the highest Swiss court, the Federal Supreme Court. This adds an arbitration-friendly feature to Swiss arbitration law not usually found in other jurisdictions. The appeal must be made in writing within 30 days of service of the (full, partial or interim) award to the parties and must also be answered within 30 days. As a general rule, there is no second exchange of briefs and no hearing. Concerning the award, the Federal Supreme Court will not take new or re-hear evidence. Consequently, the legal costs of an appeal are generally very limited. For example, in case of an award of about USD 1–2m, a party risks court costs and compensation for lawyers’ fees of approx. 2.5% of the amount in dispute (Dasser, ASA Bull. 2010, 82, 93).

11 Enforcement of an Award

11.1 Has your jurisdiction signed and/or ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards? Has it entered any reservations? What is the relevant national legislation?

Switzerland ratified the NYC on March 2, 1965, and the NYC entered into force in Switzerland on August 30, 1965. It is directly applicable as Swiss law. The PILA has extended the applicability of the NYC to the recognition and enforcement of all foreign awards (Article 194, PILA) and, per analogiam, to the enforcement of Swiss awards if, and to the extent, the parties have agreed to a waiver of the right to file an appeal (Article 192, PILA). Switzerland has withdrawn an earlier reservation, and no reservations are currently in place.

11.2 Has your jurisdiction signed and/or ratified any regional Conventions concerning the recognition and enforcement of arbitral awards?

No, but Switzerland is also a party to the Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927. In addition, there are a number of bilateral treaties (in particular with Germany, Sweden, Austria, Belgium, Italy, Liechtenstein, the Czech Republic and Slovakia) that also cover arbitral awards.

11.3 What is the approach of the national courts in your jurisdiction towards the recognition and enforcement of arbitration awards in practice? What steps are parties required to take?

Arbitral awards are recognised and enforced as a matter of course. This holds true for both domestic and foreign arbitral awards. Case law indicates that the courts are very reluctant to second-guess an arbitral tribunal’s determination on the issues. In particular, there is no review on the merits unless the effect of the award manifestly violates public policy. Monetary awards are enforced in federal debt enforcement proceedings and may be the basis for an attachment of the debtor’s

award. The proposed amendment to the PILA purports to correct a gap in this text by including a provision on the revision and correction of awards that was earlier missing.Correction of an award must be limited to rectifying computational, clerical or typographical errors. Similarly, a party may request the arbitral tribunals to clarify the precise scope of the operative part of its award, or clarify an obvious inconsistency between the operative part and the reasons, if one were to exist.

10 Challenge of an Award

10.1 On what bases, if any, are parties entitled to challenge an arbitral award made in your jurisdiction?

A final award may be set aside based on the following limited grounds (Article 190 para. 2, PILA):a. The appointment of the sole arbitrator was incorrect, or the

panel was incorrectly constituted.b. The arbitral tribunal has wrongfully accepted, or refused

jurisdiction.c. The arbitral tribunal has ruled on an issue that was not

submitted to it, or, conversely, it has failed to rule on a claim submitted.

d. The arbitral tribunal violated the principle of equal treatment of the parties or their right to be heard.

e. The award violates international public policy – understood by the Federal Supreme Court very narrowly to refer primarily to a universal public policy common to all civilised nations although with a Swiss “touch” (to date, only two sports-related awards have been set aside for violation of public policy, but no commercial arbitration award).

A preliminary, or interim, award may be challenged separately, based on grounds a. or b., above. The other grounds may be invoked against preliminary awards as well insofar as they directly concern the constitution (ground a.) or the jurisdiction of the arbitral tribunal (ground b.) (DFT 140 III 477). If that is not the case, the other grounds for appeal can only be raised in a challenge of the final award.The Federal Supreme Court exercises considerable restraint in the setting aside of arbitral awards, resulting in the dismissal of the great majority of appeals. The judgment is usually rendered within a very short period of time. An empirical study has shown that the Court set aside less than 7% of all challenges that were brought under the PILA and decided on the merits, and typically takes just about four months to decide (Dasser, ASA Bull. 2010, 82, 86, 92; see also www.arbitration-ch.org/pages/en/asa/news-&-projects/details/974.challenges-of-swiss-arbitral-awards-%E2%80%93-selected-statistical-data-as-of-2013.html).

10.2 Can parties agree to exclude any basis of challenge against an arbitral award that would otherwise apply as a matter of law?

The parties may waive the right to file an appeal in advance if they do so explicitly and in writing, and if neither of them has its seat, domicile, residence or place of business in Switzerland (Article 192). They may also limit such waiver to specific grounds of appeal.

10.3 Can parties agree to expand the scope of appeal of an arbitral award beyond the grounds available in relevant national laws?

The parties are free to provide for an appeal before a second

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Conversely, there is no explicit obligation of the parties to keep the existence, and the content of, the arbitral proceedings secret. In general, a duty of the parties to keep the proceedings confidential may not be inferred from an arbitration clause. A party may even be obliged to inform the public about the proceedings, i.e. under the rules of ad hoc publications applicable to companies listed on a stock exchange. Also, even if the parties agree on a duty of confidentiality, a party may disclose information related to the arbitration in order to preserve its legal rights.

12.2 Can information disclosed in arbitral proceedings be referred to and/or relied on in subsequent proceedings?

Unless the parties have agreed otherwise, each party is free to use information disclosed in arbitral proceedings for other purposes, such as in subsequent arbitral or state court proceedings. In practice, it is not uncommon to use documents produced, or briefs filed by, the other party in other proceedings. The rule found at Article 3 para. 12 of the IBA Rules on the Taking of Evidence, however, is frequently applied based on agreement of the parties; the same is true for broader confidentiality orders of the tribunal.

13 Remedies / Interests / Costs

13.1 Are there limits on the types of remedies (including damages) that are available in arbitration (e.g., punitive damages)?

The law applicable to the merits of the dispute determines which types of remedies, including types of damages, are available. In principle, Swiss arbitration law does not put limits on such types of remedies. A particular remedy that is provided for by the applicable law would therefore be unavailable only if it were in violation of public policy, but there are no precedents to that regard.An issue discussed and not resolved is, however, the availability of punitive (exemplary) or multiple damages. Since punitive damages are almost (although not entirely) unknown in Swiss law, Swiss courts do not apply punitive damages provided for by the applicable foreign law as a matter of Swiss public policy. It is generally acknowledged, however, that arbitral tribunals situated in Switzerland are not bound by the limits of Swiss public policy. Rather, they should, and do, apply truly international notions of public policy. As a consequence, they may apply rules on punitive damages of the law applicable to the substance of the dispute.Another question is whether an award granting punitive or multiple damages may be set aside on appeal. Since the Swiss Federal Supreme Court refers to a universal public policy, punitive damages, being a generally acknowledged type of damages in most common law jurisdictions, should not, as such, be a reason to set aside the award.

13.2 What, if any, interest is available, and how is the rate of interest determined?

There is no restriction in Swiss arbitration law with regard to interest. Whether, and to what extent, interest is due depends upon the law applicable to the subject matter of the dispute. Swiss arbitral tribunals award interest on damages, if claimed, in line with international practice. Consequently, there is no rule concerning the rate of interest in Swiss arbitration law.

assets to secure enforcement. If the debtor objects to enforcement, a judge will set aside the objection in summary proceedings and will normally render a decision within a few weeks. Appeals are, however, possible against this decision, and the appeal proceedings could last several months. Non-monetary awards are enforced under the CPC in summary proceedings.

11.4 What is the effect of an arbitration award in terms of res judicata in your jurisdiction? Does the fact that certain issues have been finally determined by an arbitral tribunal preclude those issues from being re-heard in a national court and, if so, in what circumstances?

Pursuant to Swiss law, a final award that is enforceable in Switzerland is also binding on Swiss national courts and arbitral tribunals sitting in Switzerland. Only the operative part of the award is binding, but not findings of fact or a legal reasoning that is not part of the operative part of the award. The finality of the award will have to be considered under the lex arbitri, the enforceability under Swiss law and, therefore, under the New York Convention in case of a foreign award. The Federal Supreme Court has also upheld the principle of res judicata as part of procedural public policy and therefore set aside arbitral awards that disregarded this principle.

11.5 What is the standard for refusing enforcement of an arbitral award on the grounds of public policy?

Enforcement of foreign arbitral awards can be refused on the grounds of public policy. As in proceedings where annulment of an award on the grounds of public policy is sought (cf. question 10.1 above), the courts are very reluctant to refuse enforcement of a foreign arbitral award on the basis of public policy. The violation of public policy must be obvious and clear, but can relate to procedural issues (equal treatment of the parties, right to be heard, independence of the arbitrators) and substantive issues (violation of anti-bribery or corruption laws). It is still unclear under which circumstances awards granting punitive damages can be enforced. Mandatory provisions that are part of public policy in domestic law do not automatically qualify as public policy from an international perspective. Enforcement of Swiss arbitral awards cannot be refused on the grounds of public policy, as annulment of the award on this ground could have been sought.

12 Confidentiality

12.1 Are arbitral proceedings sited in your jurisdiction confidential? In what circumstances, if any, are proceedings not protected by confidentiality? What, if any, law governs confidentiality?

There is no general provision on the confidentiality of arbitral proceedings in Swiss law. The rules of arbitral institutions, or other arbitration rules agreed to by the parties, may contain provisions relating to confidentiality.It is generally accepted that the deliberations and the voting of the arbitral tribunal are secret. Further, the arbitrators have to keep the proceedings confidential.As a matter of course, third parties do not have access to the files of the tribunal and cannot participate at the hearings without agreement by the parties.

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There are (few) professional providers of third-party funding active in Switzerland and some have been reported to be active in funding arbitrations. However, these providers require a certain minimum amount in dispute and frequently do not accept to fund cases in complex areas of law.

14 Investor State Arbitrations

14.1 Has your jurisdiction signed and ratified the Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965) (otherwise known as “ICSID”)?

Yes, it has, with effect as of June 14, 1968.

14.2 How many Bilateral Investment Treaties (BITs) or other multi-party investment treaties (such as the Energy Charter Treaty) is your jurisdiction party to?

Switzerland is a party to more than 120 BITs and various multilateral investment treaties, such as the Energy Charter Treaty and the Convention establishing the Investment Guarantee Agency.

14.3 Does your jurisdiction have any noteworthy language that it uses in its investment treaties (for example in relation to “most favoured nation” or exhaustion of local remedies provisions)? If so, what is the intended significance of that language?

The BITs of Switzerland tend to follow the same structure and have similar language, but there is no binding model agreement and no language is necessarily followed.

14.4 What is the approach of the national courts in your jurisdiction towards the defence of state immunity regarding jurisdiction and execution?

A state that is a party to an arbitration clause cannot contest the jurisdiction of the arbitral tribunal, or the arbitrability of the dispute, by reference to its state law (Article 177 para. 2, PILA). However, an award against a state need not be enforced if this would be in violation of the rules on state immunity as applied in the enforcing state.In contrast, Swiss courts traditionally follow the concept of a limited state immunity regarding jurisdiction and execution. A foreign state will only enjoy immunity for acts that are jure imperii, but not for acts jure gestionis, at least to the extent that there is a certain connection to Switzerland. Only the nature of the act (jure imperii or gestionis), but not its purpose, could provide immunity. At the enforcement stage, public assets that are used jure imperii nature enjoy immunity regarding execution.In addition, certain conventions and treaties apply, in particular, the European Convention on State Immunity of May 16, 1972, and the Vienna Conventions on Diplomatic Relations of 1961 and on Consular Relations of 1963. Furthermore, Switzerland has signed and ratified the United Nations Convention on Jurisdictional Immunities of States and their Property of December 2, 2004.

13.3 Are parties entitled to recover fees and/or costs and, if so, on what basis? What is the general practice with regard to shifting fees and costs between the parties?

While the current version of the PILA is silent on this issue, the draft proposal to the PILA contains explicit statutory provisions on the arbitral tribunal’s power to render a decision on the arbitration and party costs.The criteria for the allocation of fees and/or costs are generally determined by the arbitration rules chosen by the parties. In the absence of such rules, i.e. mainly in ad hoc arbitration, or if the rules are silent on this issue, the arbitrators have discretion. It is generally accepted that the arbitrators may apply the principle of “costs follow the event” and award fees and/or costs in proportion to each party’s success with its claims. However, the arbitral tribunal may use any objective criteria. It may, and normally does, take into account special circumstances, namely, the time and effort required with regard to particular claims or evidence offered by one party.With regards to the amount of the parties’ costs, the tribunal, again, has considerable discretion. Generally, the parties are invited to submit their costs to the tribunal. A party that prevails in all respects may expect to be fully compensated for its legal fees unless it appears that such party has unnecessarily inflated its fees. The costs of an in-house counsel are also compensated if properly calculated and presented, in particular where the successful party had not hired the services of external legal counsel and where the involvement exceeded the ordinary level of legal and litigation risk inherent to any business. It is not usual to compensate a party for time spent by its employees.As a matter of course, the arbitral tribunal requests the parties to equally share the payment of advances to cover the fees and costs of the arbitral tribunal. In the award, the tribunal usually grants the successful party a right of recourse against the other party concerning the advance.

13.4 Is an award subject to tax? If so, in what circumstances and on what basis?

There is no particular tax on Swiss arbitral awards. Specifically, the fees of the arbitrators are, in principle, exempt from Swiss VAT.

13.5 Are there any restrictions on third parties, including lawyers, funding claims under the law of your jurisdiction? Are contingency fees legal under the law of your jurisdiction? Are there any “professional” funders active in the market, either for litigation or arbitration?

Restrictions on fee arrangements arise out of the Bar rules that apply to lawyers acting in arbitration proceedings. Swiss counsel are subject to the Swiss Attorneys-at-Law Act and the Professional Rules of the Swiss Bar Association. According to these rules, contingency fees in lieu of ordinary attorney’s fees are not permissible, but contingency fees in addition to a guaranteed base fee (“no win, less fee” agreements) are considered to be permissible to a certain extent.Apart from the aforementioned provision, there are no specific restrictions on third-party funding in Switzerland. In 2004, the Federal Supreme Court even set aside a clause of a new law which prohibited third-party funding in the canton of Zurich. The Court held that a general ban of third-party funding violates the right of economic freedom as enshrined in the Federal Constitution (DFT 131 I 223).

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In addition, the Court of Arbitration for Sport (CAS) handles an increasing workload, with 407 new arbitration cases filed in 2013 – as compared to, e.g., just 75 in 2000. Such sports-related cases have become more conspicuous recently as an increasing number of CAS awards are challenged before the Swiss Federal Supreme Court.

15.2 What, if any, recent steps have institutions in your jurisdiction taken to address current issues in arbitration (such as time and costs)?

Due to feedback received in the consultation process conducted in the course of a possible revision of Article 7 PILA on competence-competence (cf. questions 3.3 and 3.4 above), the Swiss Parliament had instructed the Federal Council to conduct a comprehensive evaluation of the entire Swiss arbitration law with the aim of preserving the attractiveness of Switzerland as a place of arbitration. As mentioned above, in January 2017, the Swiss Federal Council presented a draft bill on the revision of Chapter 12 of the PILA. The consultation phase of this draft bill lasts until May 31, 2017, after which it shall be submitted to Parliament. The proposed bill proposes a “light touch” revision of selective provisions by aligning the existing law with case law and clarifying certain unresolved issues. One innovative addition of the revision is the possibility for the parties to address the Federal Supreme Court in English during the appeal or revision process. In the course of this revision, the Federal Council also decided to renounce the project of revising Article 7 of the PILA.

AcknowledgmentThe authors are grateful to Dilber Devitre, an associate at Homburger, for her assistance with updating this chapter.

15 General

15.1 Are there noteworthy trends or current issues affecting the use of arbitration in your jurisdiction (such as pending or proposed legislation)? Are there any trends regarding the type of disputes commonly being referred to arbitration?

Arbitration in Switzerland has a long tradition, a very flexible and proven legal framework, a fine-tuned infrastructure and a large number of specialist practitioners that are experienced counsel, arbitrators, or both. Switzerland is a preferred venue for proceedings under the auspices of the International Chamber of Commerce. In addition, several institutions offer arbitration services, such as the Court of Arbitration for Sport (Tribunal Arbitral du Sport), and the well-known Zurich and Geneva Chambers of Commerce. Whereas previously various chambers of commerce of the Swiss cantons (including Zurich and Geneva) each had their own set of rules, the unified “Swiss Rules of International Arbitration” (Swiss Rules) have governed the institutional arbitration administered by the various cantonal Chambers of Commerce since January 1, 2004. The Swiss Rules are based on the UNCITRAL Arbitration Rules, and have established themselves as efficient and user-friendly (www.swissarbitration.org). An updated version entered into force in June 2012 and is now administered by the Swiss Chambers’ Arbitration Institution. In addition, in 2007, the Swiss Chambers added the Swiss Rules of Commercial Mediation. The disputes most commonly referred to arbitration in Switzerland involve M&A agreements, service agreements, purchase/sale of goods, distribution/agency, intellectual property/licence agreements, and commercial disputes with similar characteristics.

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Felix DasserHomburgerPrime Tower, Hardstrasse 201CH-8005 ZurichSwitzerland

Tel: +41 43 222 10 00Email: felix.dasser@homburger.chURL: www.homburger.ch

Balz GrossHomburgerPrime Tower, Hardstrasse 201 CH-8005 ZurichSwitzerland

Tel: +41 43 222 10 00Email: balz.gross@homburger.chURL: www.homburger.ch

Homburger advises and represents Swiss and international corporate clients and individual entrepreneurs on all key aspects of business law.

The Litigation and Arbitration Practice Group focuses primarily on commercial litigation, international commercial arbitration and Swiss administrative proceedings. We advise clients on dispute resolution strategies in domestic and international settings, and represent them in judicial proceedings, with the emphasis on complex, large-scale litigation or arbitration. We also offer a full range of services in alternative dispute resolution (ADR) and debt collection.

Our lawyers represent clients as counsel and serve as members and chairpersons of arbitration panels in institutional and ad hoc arbitration, including the ICC, UNCITRAL, Swiss Rules of International Arbitration, London Court of International Arbitration, WIPO, and others.

Other services include representation of companies in white-collar criminal and asset recovery matters, internal reviews and regulatory investigations (including in-house forensic review services), as well as expert advice and expert testimony on Swiss law.

Prof. Dr. Felix Dasser (born 1958) is the former Head of Homburger’s Litigation | Arbitration Practice Group. He was admitted to the Zurich Bar in 1991 and joined Homburger the same year. He has been a partner since 2000. In addition, he is Adjunct Professor of Law at the Zurich Law School, mainly teaching international dispute resolution. He is on the Executive Committee of the Board of the Swiss Arbitration Association.

His practice focuses on international commercial disputes, litigation and arbitration as well as internal and regulatory investigations. He acts as counsel for major companies in Swiss and foreign arbitration proceedings under various arbitration rules and also serves as an arbitrator and expert on Swiss law.

He regularly publishes in the fields of international commercial law and dispute resolution. A complete list is available on the website.

Education: 1985, lic.iur., Zurich (m.c.l.); 1989, Dr. iur., Zurich (s.c.l.); 1990, LL.M., Harvard; 1999, Privatdozent, Univ. Zurich; and 2005, Titularprofessor, Univ. Zurich.

Balz Gross is the Head of the Litigation | Arbitration practice of Homburger. His practice focuses on international arbitration proceedings and complex domestic and international litigation.

He has acted as party counsel in more than 100 international arbitrations (ad hoc, and under ICSID, ICC, LCIA, Swiss Chambers and other institutional rules), and as arbitrator in numerous international arbitrations. Balz Gross acts as counsel in large, mostly international proceedings before the state courts in all Swiss cantons, in particular the Commercial Courts, and represents foreign and Swiss clients in proceedings involving criminal law issues.

“Leading litigator and arbitration counsel” (Chambers 2010), “quick witted and prudent” (Chambers 2011), also praised for his “excellent strategic advice” (Chambers 2012), Balz Gross is a “shrewd litigator and master technician” (Chambers 2013), recommended in Chambers in Arbitration (International), Dispute Resolution (Arbitration Counsel, Litigation) and Employment.

Education: lic.iur./Dr. iur. Univ. Zurich, 1989/1996 (s.c.l.); and LL.M., Harvard, 1995.

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