Revised Swiss Rules of Arbitration | WilmerHale – JDSupra – JD Supra

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The Swiss Arbitration Centre (formerly known as the Swiss Chambers’ Arbitration Institution (SCAI)) has released revised arbitration rules, which are effective as of 1 June 2021 and apply to arbitration proceedings commenced on or after that date.1 The most recent previous revision was in 2012. The Revised Rules can be found here.

The Revised Rules are part of the Swiss Arbitration Centre’s reorganization after the merger between the Swiss Arbitration Association (ASA) and SCAI. That merger was announced in September 20202 and has been shortlisted for the GAR Awards 2021 in the category “Best Innovation.”3 The restructuring allows the two organizations to combine their respective expertise and resources to boost outreach (in particular, internationally), by providing “one voice” to promote Swiss arbitration globally.4 Together with the Revised Rules, ASA has also launched the new Swiss Arbitration online platform, which is intended to serve as a one-stop-shop for arbitration users, providing access not only to the Swiss Arbitration Centre and ASA but also to the Swiss Arbitration Hub (a platform for hearing logistics, allowing practitioners to find and contact providers for hearing-related services, such as venue, accommodation, interpreter, court reporter, etc.) and the Swiss Arbitration Academy (providing professional and practical training in arbitration, offering post-graduate degrees in association with the Universities of Lucerne and Neuchâtel).

The Revised Rules not only reflect the institutional reorganization, but have also been amended substantively, in particular with regard to multi-party and multi-contract proceedings. In light of COVID-19 related changes to the conduct of arbitrations, the Revised Rules also contain provisions addressing electronic filing and remote hearings.

Section I below addresses the most notable changes, while Section II briefly summarizes other revisions.

I. Notable Revisions to the Swiss Rules

A. Multi-Contract and Multi-Party Proceedings

The Revised Rules now expressly address the situation where claims are raised under more than one arbitration agreement. Article 5(1)(b) provides that the Arbitration Court of the Swiss Arbitration Centre (Court) shall review whether the arbitration agreements are “manifestly incompatible,” while reserving the arbitral tribunal’s right to review the jurisdictional question 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 on Article 4 of the 2012 Swiss Rules through the introduction of new Articles 6 and 7.

New Article 6 details how to proceed where a party raises a cross-claim (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 Answer to the Notice of Arbitration,” typically a claim between co-respondents), seeks to assert a claim against an additional party (joinder) or where an additional party raises a claim against an existing party (intervention). In all these cases, a notice of claim 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

New Article 7 addresses consolidation and requires a request from a party before consolidation is considered by the Court. If consolidation is granted, the proceedings are generally consolidated into the arbitration commenced first (Article 7(3)). Many of the recent rule revisions by other institutions have included amendments to their respective rules on joinder and consolidation (see our updates on the 2021 ICC Rules here and the 2020 LCIA Rules here). This is likely a function of the increased complexity of disputes submitted to arbitration.

B. Hearings 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 is filed in hard copy (Article 3(1) Revised Rules). Article 19(2) now also expressly instructs the arbitral tribunal and the parties to address “issues of data protection and cyber security” at an initial conference.

This amendment is in line with a similar suggestion in the also recently revised IBA Rules on the Taking of Evidence in International Arbitration (Article 2(2)(e)) and the 2020 LCIA Rules (Article 30.5).6 It is likely that other rule revisions will follow this trend, fueled by the prevalence of electronic communications coupled with a heightened awareness of cyber risks and the impact of data protection legislation.

While the Swiss Rules had already referred to the possibility of witness examination via video conference (Article 25(4) of the 2012 Swiss Rules), the Revised Rules now explicitly clarify that “any hearings may be held in person or remotely by videoconference or other appropriate means” (Article 27(2)). This revision follows similar recent changes to the 2021 ICC Rules and the 2020 LCIA Rules, which also made the arbitral tribunal’s discretion to order a remote hearing more explicit (see Article 26(1) ICC Rules and Article 19.2 LCIA Rules).

II. Other Revisions to the Swiss Rules

In addition, the language of the Swiss Rules has been amended in various provisions to make them easier to read and clearer. Some of the other revisions include:

  • Arbitrators: Minor changes were made to the provisions addressing the appointment, independence and impartiality, and disclosure obligations of arbitrators. Article 12 now makes explicit an arbitrator’s continuing duty to promptly disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence during the course of the proceedings. In addition, the Revised Rules state that, where the appointment of a new party representative would jeopardize the independence or impartiality of the arbitral tribunal, it may oppose such appointment (Article 16(4)). The Revised Rules further streamline the appointment process where the parties in multi-party proceedings have not agreed on how to constitute the arbitral tribunal (Article 11(4) and (5)).
  • Tribunal Secretary: A secretary to the arbitral tribunal now may only be appointed with the parties’ consent (Article 16(3)); previously, the Rules only required consultation of the parties.
  • Settlement/Mediation: Together with the 2018 DIS Rules, the Swiss Rules are one of the few international arbitration rules that expressly provide that an arbitral tribunal may take a role in facilitating settlement (Article 19(5), previously Article 15(8), and Article 26 DIS Rules).7 The Swiss Rules make clear that, where parties have agreed to allow the tribunal to play this role, they have waived their right to challenge arbitrators based on their participation in and any knowledge acquired in the pursuit of such settlement. In a similar vein, new Article 19(6) provides that arbitration proceedings will be stayed should the parties decide at any time to attempt to resolve their dispute by mediation.
  • Expedited Procedure: Article 42(3) now provides that the parties may at any time during the proceedings agree that they no longer wish to apply the rules for expedited procedure to their case, increasing the flexibility and adaptability of the proceedings to events and circumstances as they change during the course of the proceedings.
  • Costs: Deposits will now solely be administered by the Secretariat, rather than – as was previously an option – by the arbitral tribunal (Appendix B – Schedule of Costs, Article 4.1). The revised Schedule of Costs provides more detail on the administrative costs charged and these costs 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] in fees for disputes above CHF 250,000,000 [approx. USD 278,000,000]). On the other hand, arbitrators’ fees have slightly decreased. Arbitrators’ fees are based on the amount in dispute, and the Swiss Rules set minimum and maximum amounts for fees.8 On balance, the costs of proceedings are likely to remain the same or be slightly lower than under the previous edition of the Swiss Rules.

In many ways, the revision of the Swiss Rules reflect a light touch, rather than a full overhaul. Nevertheless, the Revised Rules contain several changes which will increase efficiency and flexibility of the proceedings. The Revised Rules and the institutionalized cooperation between 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 highly regarded arbitration jurisdictions worldwide.

Footnotes -

  1. Arbitration clauses referring to SCAI or the Swiss Chambers of Commerce remain valid and binding despite the institutional changes (Article 1(1)). However, the model arbitration clause has been updated and going forward it is advisable to use the new wording to avoid any unnecessary complications.

  2. A notice of claim must meet the same requirements as set out in Article 3 for a notice of arbitration (Article 6(1) provides that Article 3 shall apply by analogy).

  3. Our discussion of this provision in the LCIA Rules can be found here.

  4. Our update on the revised DIS Rules can be found here.

  5. By way of example, under the Revised Rules, the fees for a three-member panel at an amount in dispute of between CHF 10,000,001 and CHF 20,000,000 (approx. USD 11,000,000 – USD 22,000,000) are between CHF 146,000 (plus 0.35% of the amount above CHF 10,000,000) and CHF 496,000 (plus 0.85% of the amount above CHF 10,000,000) (approx. between USD 163,000 (plus 0.35% of the amount above USD 11,000,000) and USD 555,000 (plus 0.85% of the amount above USD 11,000,000). At the same amount in dispute under the 2012 Swiss Rules, the fees would have ranged from CHF 151,000 (plus 0.75% of the amount above CHF 10,000,000) to CHF 600,000 (plus 1.5% of the amount above CHF 10,000,000) (approx. between USD 169,000 (plus 0.75% of the amount above USD 11,000,000) and USD 671,000 (plus 1.5% of the amount above USD 11,000,000). The Swiss Arbitration Centre offers an online cost calculator for administrative costs and arbitrators’ fees both under the Revised Rules and under the 2012 Swiss Rules.

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