Commercial Arbitration in Switzerland
Commercial arbitration is an alternative dispute resolution method in which the parties entrust the decision of a dispute to a private arbitral tribunal, whose award has the same binding force as a state court judgment. Switzerland is one of the world's leading arbitration venues, recognised for its neutrality, favourable legal framework and quality institutions. PBM Avocats assists companies in Geneva and Lausanne in commercial arbitration proceedings.
Legal Framework for Arbitration in Switzerland
| Type of Arbitration | Applicable Law | Recourse |
|---|---|---|
| Swiss domestic arbitration | CPC art. 353-399 | Cantonal court then Federal Supreme Court |
| International arbitration (seat in CH) | PILA chapter 12 (art. 176-194) | Directly to Federal Supreme Court (art. 190 PILA) |
| SCAI arbitration | Swiss Rules 2021 Regulations | According to law of the seat |
The Arbitration Clause: Key to Arbitration
Arbitration rests on the agreement of the parties, expressed either by an arbitration clause (inserted in the main contract before any dispute), or by a submission agreement (concluded after the dispute arises). A standard arbitration clause:
"Any dispute arising from or in connection with this contract shall be finally settled in accordance with the Swiss Rules of International Arbitration of the Swiss Arbitration Association (Swiss Rules) by one (or three) arbitrator(s) appointed in accordance with these Rules. The seat of arbitration shall be Geneva (or Lausanne, Zurich). The language of the proceedings shall be English (or French). The applicable law is Swiss law."
Main Arbitral Institutions Active in Switzerland
- SCAI (Swiss Arbitration Association): the Swiss reference institution, with the Swiss Rules 2021, headquartered in Basel. Ideal for international and domestic commercial disputes
- ICC (International Chamber of Commerce): global arbitral institution with an office in Geneva. The most widely used for international commercial disputes
- CAS/TAS (Court of Arbitration for Sport): Lausanne, specialised in international sports disputes
- WIPO (World Intellectual Property Organization): Geneva, specialised in intellectual property and cybersquatting disputes
- ICSID (International Centre for Settlement of Investment Disputes): Washington, for investment arbitrations
Advantages and Disadvantages of Arbitration Compared to State Courts
- Advantages: confidentiality, neutrality and impartiality of arbitrators, possible technical specialisation, facilitated international enforcement (New York Convention), procedural flexibility, definitive character (few appeals)
- Disadvantages: high costs (arbitrator fees, institutional costs, often CHF 50,000 to several hundred thousand), variable duration (6 months to 3 years), impossibility of appeal on the merits, impossibility of involving third party non-signatories
Interim Measures in Arbitration
The arbitral tribunal may order interim and conservatory measures at the request of a party, including suspension of certain activities or preservation of evidence. However, for urgent measures requiring immediate enforcement, the parties must apply to the competent state court, which retains jurisdiction even in the presence of an arbitration clause (art. 374 CPC, art. 183 PILA).
Investment Arbitration in Switzerland
Switzerland has concluded many Bilateral Investment Treaties (BITs) with other states. These treaties allow foreign investors harmed by measures of the host state to submit their claims to international arbitration (ICSID, UNCITRAL). Switzerland is often chosen as the seat for these investment arbitrations due to its neutrality and favourable legal framework.
What is the difference between institutional arbitration and ad hoc arbitration?
In institutional arbitration, a specialised institution (ICC, SCAI, LCIA) administers the procedure according to its rules and provides administrative services (deadline management, cost advances, support for tribunal constitution). In ad hoc arbitration, the parties organise the procedure themselves, often according to UNCITRAL rules, without an institution. Ad hoc arbitration is less expensive but requires more coordination between the parties.
Is Switzerland a good seat for international arbitration?
Yes. Switzerland is one of the world's most reputable arbitration venues. Its assets: recognised political neutrality, excellence of applicable law (CPC art. 353 et seq. for domestic arbitration, PILA chapter 12 for international arbitration), quality judicial infrastructure for recourse to the Federal Supreme Court, tradition of respecting confidentiality, and presence of numerous institutions (SCAI, CAS/TAS, WIPO).
Can an arbitral award rendered in Switzerland be enforced abroad?
Yes. Arbitral awards rendered in Switzerland benefit from the favourable regime of the New York Convention (1958), ratified by more than 170 states. This convention obliges signatory states to recognise and enforce foreign arbitral awards under conditions similar to those of national judgments. The award must be enforced abroad according to national exequatur procedures.
Is arbitration confidential in Switzerland?
Confidentiality is one of the major advantages of arbitration, but it is not absolute. In Switzerland, institutional rules (SCAI, etc.) generally provide for confidentiality of the procedure. However, the final award may be published if the parties consent or if subsequent judicial proceedings before the Federal Supreme Court make it public. The parties may contractually agree on a strict confidentiality obligation.
Can an arbitral award in Switzerland be appealed?
Yes, but in a very limited manner. Recourse in civil matters to the Federal Supreme Court against an international arbitral award is possible only on very specific grounds (art. 190 PILA): irregular jurisdiction of the tribunal, irregular constitution, exceeding of claims, violation of the right to be heard, contrary to public order. The Federal Supreme Court does not review the merits of the case.