Revised Swiss Arbitration Rules | WilmerHale
The Swiss Arbitration Center (formerly known as the Swiss Chambers’ Arbitration Institution (SCAI)) has published revised arbitration rules, which come into force on June 1, 2021 and apply to arbitration proceedings started in on or after that date.1 The most recent previous revision was in 2012. The revised rules can be viewed here.
The revised Rules are part of the reorganization of the Swiss Arbitration Center after the merger between the Swiss Arbitration Association (ASA) and SCAI. This merger was announced in September 20202 and was shortlisted for the GAR Awards 2021 in the “Best Innovation” category.3 The restructuring allows the two organizations to combine their respective expertise and resources to strengthen their outreach (in particular, internationally), providing “one voice” to promote Swiss arbitration globally.4 Along with the revised Rules, the ASA also launched the new online platform Swiss Arbitration, which is intended to serve as a one-stop-shop for arbitration users, providing access not only to the Swiss Arbitration Center and the Swiss Arbitration Center. ‘ASA, but also at the Swiss Arbitration Hub (a platform for the logistics of hearings, allowing practitioners to find and contact service providers related to the hearing, such as venue, accommodation, interpreter, court reporter , etc.) and the Swiss Arbitration Academy (providing professional and practical training in arbitration, offering postgraduate degrees in association with the Universities of Lucerne and Neuchâtel).
The revised Rules not only reflect the institutional reorganization, but have also been substantially amended, in particular with regard to multi-party and multi-contractual procedures. In light of COVID-19-related changes in the conduct of arbitrations, the revised Rules also contain provisions regarding electronic filing and remote hearings.
Section I below discusses the most notable changes, while Section II briefly summarizes the other revisions.
I. Notable revisions to the Swiss Regulations
A. Multicontractual and multiparty procedures
The revised Rules now expressly address the situation in which claims are raised under several arbitration agreements. Article 5 (1) (b) provides that the Court of Arbitration of the Swiss Arbitration Center (Court) examines whether the arbitration agreements are “manifestly incompatible”, while reserving the right to examine the jurisdictional issue of whether claims under multiple contracts can be heard in a single arbitration proceeding (Articles 5 (2) and 23).
While the Swiss Rules already included provisions on consolidation and joinder, the revised Rules expand Article 4 of the 2012 Swiss Rules by introducing new Articles 6 and 7.
The new Article 6 details the procedure to be followed when a party raises a counterclaim (defined in Article 6 (1) as “a claim against another party other than a claim in the notice of arbitration or a counterclaim. in the response to the notice of arbitration ”, usually a claim between co-defendants), seeks to assert a claim against an additional party (join) or when an additional party raises a claim against an existing party (intervention). In all these cases, a notice of complaint is required, which must be submitted either to the Secretariat or, after its constitution, to the arbitral tribunal, in accordance with the provisions of Article 6.5
The new section 7 deals with joinder and requires a request from a party before the joinder is considered by the Court. If joinder is granted, the proceedings are usually consolidated in the arbitration started first (Article 7 (3)). Many of the recent rule revisions by other institutions have included changes to their respective rules on joining and consolidating (see our updates on the ICC 2021 rules here and the LCIA 2020 rules here). This is probably due to the increased complexity of the disputes submitted to arbitration.
B. Audiences and use of technology
Reflecting the advancement of technology (and the impact of the COVID-19 pandemic) on the conduct of arbitration proceedings, the revised rules no longer require that the notice of arbitration be filed on paper (Article 3, paragraph 1 of the revised rules). Article 19 (2) now expressly requires the arbitral tribunal and the parties to address “data protection and cybersecurity issues” at a first conference.
This amendment is in line with a similar suggestion in the also recently revised IBA Rules on Obtaining Evidence in International Arbitration (Article 2 (2) (e)) and LCIA Rules 2020 (Article 30.5).6 It is likely that further rule revisions will follow this trend, fueled by the prevalence of electronic communications coupled with increased awareness of cyber risks and the impact of data protection legislation.
While the Swiss Rules had already mentioned the possibility of questioning witnesses by videoconference (article 25, paragraph 4, of the Swiss Rules of 2012), the revised Rules now explicitly state that “any hearing may be held in person or remotely by videoconference or other appropriate means ”(Article 27, paragraph 2). This revision follows similar recent changes to the ICC Rules 2021 and LCIA Rules 2020, which also made more explicit the discretion of the arbitral tribunal to order a remote hearing (see Article 26 (1) ICC Rules and Article 19.2 LCIA Rules).
II. Other revisions of Swiss rules
In addition, the language of the Swiss Rules has been changed in various provisions to make them easier to read and clearer. Some of the other revisions include:
- Referees: Minor changes have been made to the provisions regarding the appointment, independence and impartiality, and disclosure obligations of arbitrators. Article 12 now makes explicit the continuing obligation of the arbitrator to disclose as soon as possible any circumstance which might give rise to legitimate doubts as to his impartiality or independence during the proceedings. In addition, the revised Rules stipulate that, when the appointment of a new party representative would jeopardize the independence or impartiality of the arbitral tribunal, the latter may object to this appointment (Article 16 (4)). . The revised Rules further streamline the appointment process when parties to multi-party proceedings have not agreed on how to constitute the arbitral tribunal (Article 11, paragraphs 4 and 5).
- Secretary of the Tribunal: A secretary of the arbitral tribunal can now only be appointed with the consent of the parties (Article 16 (3)); previously, the Regulations only required consultation of the parties.
- Settlement / Mediation: Along with the DIS 2018 Rules, the Swiss Rules are one of the few international arbitration rules that expressly provide that an arbitral tribunal can play a role in facilitating settlement (article 19 (5), former article 15 (8) , and Article 26 DIS Rules).7 The Swiss Rules state that, when the parties agreed to allow the tribunal to play this role, they waived their right to challenge the arbitrators on the basis of their participation and any knowledge gained in pursuing such a settlement. Similarly, the new Article 19 (6) provides that the arbitration proceedings will be suspended if the parties decide at any time to attempt to resolve their dispute through mediation.
- Expedited procedure: Article 42 (3) now provides that the parties may at any time during the procedure agree that they no longer wish to apply the rules of the expedited procedure to their case, increasing the flexibility and adaptability of the procedure to events and circumstances as they evolve in the course of the proceedings.
- Fresh: Deposits will now be administered solely by the Secretariat, rather than – as was previously an option – by the Arbitral Tribunal (Annex B – Schedule of Fees, Article 4.1). The revised fee schedule provides more details on the administrative fees charged and these fees have increased slightly (relevant for disputes of CHF 300,001 and above [approx. USD 334,000], up to a maximum of CHF 75,000 [approx. USD 84,000] fees for disputes over CHF 250,000,000 [approx. USD 278,000,000]). On the other hand, the fees of the arbitrators decreased slightly. Arbitrators’ fees are based on the amount in dispute and Swiss rules set minimum and maximum amounts for fees.8 Overall, the procedural costs should remain the same or be slightly lower than the previous edition of the Swiss Rules.
In many ways, the revised Swiss rules reflect a light touch, rather than a complete overhaul. Nevertheless, the revised Rules contain several changes which will increase the efficiency and flexibility of the procedure. The revised rules and institutionalized cooperation between the ASA and SCAI reflect a concerted effort to ensure that Switzerland remains in an excellent position to maintain its status as one of the most reputable arbitration courts in the world.
Arbitration clauses referring to SCAI or Swiss Chambers of Commerce remain valid and binding despite institutional changes (article 1 (1)). However, the model arbitration clause has been updated and in the future it is advisable to use the new wording to avoid unnecessary complications.
A notice of claim must meet the same requirements as those set out in Article 3 for a notice of arbitration (Article 6 (1) provides that Article 3 applies by analogy).
Our discussion of this provision in the LCIA Rules can be found here.
Our update on the revised DIS rules can be found here.
For example, under the revised Rules, the fees of a three-member panel for an amount in dispute between CHF 10,000,001 and CHF 20,000,000 (approximately USD 11,000,000 – USD 22,000,000) are between CHF 146,000 (plus 0.35% of the amount over CHF 10,000,000) and CHF 496,000 (plus 0.85% of the amount over CHF 10,000,000) (approximately between USD 163,000 (plus 0.35 % of the amount over $ 11,000,000) and $ 555,000 (plus 0.85% of the amount over $ 11,000,000) At the same amount in dispute under the 2012 Swiss Rules, the fees would have varied by 151,000 CHF (plus 0.75% of the amount over CHF 10,000,000) to CHF 600,000 (plus 1.5% of the amount over CHF 10,000,000) (approximately between USD 169,000 (plus 0.75% of the amount above to 11,000,000 USD) and 671,000 USD (plus 1.5% of the amount over 11,000,000 USD). The Swiss Arbitration Center offers an online cost calculator for administrative costs and arbitrator fees t under the revised Regulations than under the Swiss 2012 rules.