With effect from 1 January 1989, Switzerland for the first time codified its rules on international arbitration at a federal level by including a chapter on international arbitration (“Chapter 12”) in its newly-enacted Federal Code on Private International Law of 1987 (“CPIL”).

With the introduction of Chapter 12 (Article 176–194 CPIL), the applicability of the cantonal laws and the Inter-cantonal Arbitration Convention was limited to purely domestic arbitration. This overview will address the rules of Chapter 12 as the source of rules governing international arbitration.

Chapter 12 is tailored to the needs of the international business community and affirms Switzerland’s longstanding tradition as a leading location for international commercial arbitration.

In particular, the law emphasises party autonomy by allowing the parties to determine the applicable procedural rules. This includes the parties’ right to create their own procedural rules or contractually to refer to the procedural rules of a chosen arbitral institution, such as the Swiss Rules of International Arbitration, the Rules of Arbitration of the International Chamber of Commerce (ICC) or the UNCITRAL Arbitration Rules.

The Swiss Rules of International Arbitration (http://www.swissarbitration.ch), being the applicable procedural rules if referred to by the parties, are the result of harmonisation efforts undertaken by the Chambers of Commerce of Zurich, Geneva, Basle, Berne, Lausanne and Lugano. As of 1 January 2004, the Swiss Rules of International Arbitration have replaced the arbitration rules of each Chamber, among them the previous International Arbitration Rules of the Zurich Chamber of Commerce.

The Swiss Rules of International Arbitration (“the Rules”) are based on the UNCITRAL Arbitration Rules, to which two types of changes and additions have been made:

the first type of changes and additions were necessary to adapt the UNCITRAL Arbitration Rules to institutional arbitration. They include:

• creation of the “Arbitration Committee” for administration of the proceedings (Introduction of the Rules);
• the parties are free to designate the seat of the arbitration in Switzerland or elsewhere (Article 1); and
• the remuneration is left to the arbitral tribunal only within a stipulated range, varying according to the amount in dispute. The Arbitration Committee supervises the compensation system and exceeding the maximum amount requires prior approval (Article 39, Appendix B).

the other changes and additions to the UNCITRAL rules reflect modern practice and comparative law in the field of international arbitration:

• Article 3 of the Rules requires the respondent to file an answer to the notice of arbitration. The answer has to be submitted within 30 days and shall address jurisdictional issues, the claims made in the request for arbitration and the relief requested by the respondent. In addition, ­counterclaims and set-off defences can be included with the answer;
• the claimant and respondent are supposed to annex all documents they deem relevant to the request for arbitration and the Statement of Defence respectively (Articles 18–19);
• unless the parties agree to the contrary, any dispute with less than CHF 1 million (approx. EUR 650,000) at stake (including counterclaims) shall be conducted by a sole arbitrator under an expedited procedure. The expedited procedure, unknown in the UNCITRAL rules, can also be agreed among the parties for disputes worth more than CHF 1 million. Under the expedited procedure, time limits for appointment of arbitrators are reduced, the number of written submissions is limited and an award shall be made after a single hearing or on a ‘documents only’ basis. The award has to be filed within six months of the date the file was transmitted to the arbitral tribunal and the award may contain only summary reasons or, if agreed by the parties, no reasons at all (Article 42);
• a new case may be consolidated with already pending arbitral proceedings, even if the parties are not the same (Article 4);
• Article 8 of the Rules governs the constitution of multi-party proceedings. Each group shall designate one arbitrator; the two arbitrators will then determine the chairman. Where a group fails to agree on one arbitrator, the Arbitration Committee appoints all arbitrators, including the chairman;
• in case of replacement of an arbitrator, repetition of proceedings is no longer the rule but the exception (Article 14);
• the arbitral tribunal has jurisdiction to hear set-off defences (but not counterclaims), even if such defence arises from a relationship not covered by the arbitration agreement (Article 21);
• any person may be a witness, including parties and officers of legal entities. Article 25 expressly states that it is proper to interview (potential) witnesses;
• unlike the restrictive UNCITRAL rules, Article 26 provides that the arbitral tribunal may order any interim measures it deems necessary or appropriate;
• subject to an agreement to the contrary, the parties are bound to keep confidential awards and material submitted by other parties (Article 43); and
• liability of the arbitral tribunal is excluded save where the act or omission is shown to constitute deliberate wrongdoing or extremely serious negligence (Article 44).

The Rules came into force on 1 January 2004. Unless agreed otherwise by the parties, the new rules apply to all arbitral proceedings in which the parties referred to the procedural rules of one of the participating Chambers of Commerce if the notice of arbitration is submitted on or after 1 January 2004.

Scope of application
The scope of application of Chapter 12 is broad. Article 176 et seq. CPIL apply to all arbitral proceedings with an arbitral tribunal having its seat in Switzerland if, at the time the arbitration agreement was concluded, at least one of the parties was domiciled or had its ordinary residence outside Switzerland (Article 176 Para. 1 CPIL). The Inter-cantonal Arbitration Convention continues to apply in purely domestic disputes and if, in international arbitration, the parties expressly agree that the Inter-cantonal Arbitration Convention is to apply instead of Article 176 et seq. CPIL (which happens very rarely, if at all in practice).

Whether the seat of the arbitral tribunal is in Switzerland is determined by the parties themselves (in the arbitration agreement or at a later time), by the arbitral institution designated by them or, failing both, by the arbitrators (Article 176 Para. 3 CPIL).

General principles
Swiss law on international arbitration reflects the major judicial and legislative developments in the area of international arbitration during the past decades. It is based on the following general principles:

• wide scope of application;
• broad concept of arbitrability and favourable approach towards the validity of arbitration agreements by limiting formal requirements;
• emphasis on party autonomy by allowing the parties to determine the applicable procedural and substantive law;
• the equal treatment of the parties and the right to be heard;
• recognition of the finality of the award;
• significant restrictions on intervention by State courts and grounds to challenge an award in the State Courts; and
• option to exclude actions for setting aside the award.

Transitional provisions
Chapter 12 does not contain separate transitional provisions. The Federal Supreme Court has ruled that the validity of an arbitration agreement which was concluded before the entry into force of the Swiss Code on Private International Law on 1 January 1989 must conform to the requirements of the old law on international arbitration (the Inter-cantonal Convention). In contrast, the consequences arising out of a valid arbitration agreement – for example the conducting of arbitral proceedings started after 1 January 1989 – are governed by Chapter 12 (decision of the Federal Supreme Court (“BGE”) No. 119 II 179).

Formal requirements
In relation to the formal requirements of an arbitration agreement, Swiss law avoids any reference to domestic or foreign legislation and, instead, establishes an independent substantive rule. Under Article 178 Para. 1 CPIL, which is inspired by the UNCITRAL Model Law, in order to be formally valid, an arbitration agreement must be made in writing, by telegram, telex, fax or any other means of communication by which the agreement is evidenced in writing. Nowadays, an e-mail printout should suffice too. In other words, a document actually signed by both parties is no longer necessary and an exchange of documents is not a prerequisite for a valid arbitration agreement, regardless of Article II (2) of the 1958 New York Convention (BGE 121 III 43).

Substantive validity
Article 178 Para. 2 CPIL is based on the principle of favor validitatis by stating that the arbitration agreement is valid if it conforms either to (i) the law chosen by the parties; (ii) the law governing the subject matter of the dispute, in particular, the law governing the main contract; or (iii) Swiss law. However, with regard to the question of whether there was a consensus between the parties to submit their dispute to arbitration, the Federal Supreme Court tends to apply a rather restrictive interpretation. If in doubt, the Federal Supreme Court often decides in favour of State Court proceedings (BGE 116 Ia 56; BGE 128 III 50). On the other hand, once the Federal Supreme Court confirms that there was a valid arbitration agreement, it tends to be in favour of a broad scope of application (BGE 129 III 675).

Separability
The validity of an arbitration agreement cannot be contested on the ground that the main contract is not valid or that the arbitration agreement concerns a dispute which has not yet arisen (Article 178 Para. 3 CPIL; BGE 119 II 384). The validity of the arbitration clause has to be determined separately.

Arbitrability
Pursuant to Article 177 Para. 1 CPIL, any economic interest can be the subject matter of arbitration proceedings, regardless of whether the substantive law governing the underlying contractual relationship relies on a narrower definition of “objective arbitrability” (BGE 118 II 356). In other words, the arbitral tribunal no longer has to inquire into the substance of the applicable substantive law in order to determine whether a claim is arbitrable (BGE 118 II 355). In this context, Chapter 12 introduced a provision regarding objections raised by States and state-controlled organisations against the arbitrability of disputes into Swiss arbitration law: if a State or a State-controlled organisation or enterprise is a party to an arbitration agreement, it cannot invoke its own national law in order to contest either its capacity to be a party to arbitration proceedings or the arbitrability of a dispute covered by the arbitration agreement (Article 177 Para. 2 CPIL).

The constitution of the arbitral tribunal
Pursuant to Article 179 Para. 1 CPIL, arbitrators will be appointed, removed or replaced in accordance with the agreement of the parties. The parties may also refer to the procedural rules of a chosen arbitral institution such as the Swiss Rules of International Arbitration.

If there is no agreement between the parties or if the rules of the chosen arbitral institution are silent, the assistance of the ordinary State Court at the seat of the arbitral tribunal may be requested, which will then apply the relevant provisions of cantonal law accordingly. Where the parties have agreed that a State Court shall appoint the arbitrator, the judge must make the appointment unless a summary assessment shows that there is no valid arbitration agreement between the parties (Article 179 Paras. 2 and 3 CPIL; BGE 118 Ia 26).

If the State Court refuses to appoint an arbitrator, the ruling can be brought before the Federal Supreme Court by way of an appeal (BGE 121 I 81 and 118 Ia 23). In contrast, no appeal is available against the appointment of the arbitrator by a State Court; only a preliminary or final award issued later by the arbitral tribunal might be challenged in the case there was an improper appointment of the sole arbitrator or improper constitution of the arbitral tribunal (Article 190 Para. 2 lit. a CPIL; BGE 115 II 296).

The challenge of arbitrators
Pursuant to Article 180 Para. 1 CPIL, there are three grounds for challenging an arbitrator:

• the arbitrator does not meet the qualifications agreed upon by the parties;
• there is a ground for challenge under the rules of arbitration agreed upon by the parties; or
• the circumstances give rise to reasonable doubts as to the arbitrator’s independence (e.g. BGE 118 II 361).

A party may challenge its own arbitrator only based on reasons the party became aware of after the appointment was made. The grounds for the challenge must be notified to the arbitral tribunal and to the other party without delay (Article 180 Para. 2 CPIL).

Where the parties have not agreed on the procedure for challenging an ­arbitrator, the State Court at the seat of the arbitral tribunal will decide on the challenge. The decision of the State Court is final and may not be appealed to the Federal Supreme Court (BGE 122 I 370). Further, it cannot be appealed with the final award of the arbitral tribunal (BGE 128 III 330).

If the parties have agreed on a procedure for challenging the arbitrator without the involvement of a State Court, the decision of the private institution cannot be the subject of a separate appeal to the Federal Supreme Court (BGE 118 II 361). However, it is possible to submit the reasons for challenging the arbitrator which were not accepted by the private institution to the Federal Supreme Court for review when filing an appeal against a preliminary or final award of the arbitral tribunal. Such review is based on Article 190 Para. 2 lit. a CPIL which allows an appeal in the case of improper appointment of the sole arbitrator or improper constitution of the arbitral tribunal – including the lack of independence of an arbitrator (BGE 128 III 332; 118 II 361).

The appointment of substitute arbitrators
With respect to the appointment of substitute arbitrators, the same rules apply as to the appointment of the original arbitrators, unless the parties have agreed otherwise.

Arbitrators’ fees, expenses and immunity
Chapter 12 does not contain any particular provisions dealing with the issue of arbitrators’ fees and expenses. The advance and final allocation of fees and expenses is therefore subject to the parties’ discretion in the context of their arbitration agreement. If the arbitration is conducted under the rules of an arbitral institution, such rules will generally make detailed provision in relation to the arbitrators’ (and the institution’s) fees and expenses.

There are no specific rules exempting arbitrators from liability claims by the parties. Therefore, an arbitrator’s liability for wrongful performance of his duties must be determined in accordance with the general legal rules governing liability under Swiss law.

Competence to rule on jurisdiction
Article 186 Para. 1 CPIL provides that the arbitral tribunal is authorised to decide whether it has jurisdiction over the matters brought before it. The arbitral tribunal will decide on its jurisdiction even if there are already pending proceedings on the same matter before a State Court or another arbitral tribunal, unless there is a strong reason to stay the arbitral proceedings (Article 186 Para. 1bis CPIL).

The objection of lack of jurisdiction must be raised prior to any defence on the merits (Article 186 Para. 2 CPIL). A party may also, at the same time, contest jurisdiction and, subject to those objections, present its first defence on the merits. Generally, the arbitral tribunal will render its decision on jurisdiction in the form of a preliminary award (Article 186 Para. 3 CPIL).

Power to order interim measures
Unless the parties have agreed otherwise, the arbitral tribunal is empowered to order interim or protective measures upon the request of a party (Article 183 Para. 1 CPIL).

The arbitral tribunal is not entitled to impose sanctions in case of non-fulfilment of its interim decision. For this reason, if the party concerned does not comply voluntarily with the preliminary award, the arbitral tribunal may request the assistance of the judge at the place where the interim measure shall be enforced. The judge applies his own law (Article 183 Para. 2 CPIL).

Both the arbitral tribunal and the judge may make the granting of interim or protective measures conditional upon the provision of an appropriate security (Article 183 Para. 3 CPIL).

Commencement of arbitration
Pursuant to Article 181 CPIL, arbitration proceedings are pending as soon as one party submits its claim to the arbitral tribunal designated in the arbitration agreement or, if the arbitration agreement does not designate a particular arbitrator, as soon as one party initiates the procedure to appoint the arbitral tribunal.

General procedural principles
Swiss law grants the parties the widest possible autonomy to choose and determine the arbitral procedure and to tailor the procedural rules to their specific needs. Accordingly, Chapter 12 does not contain specific or detailed default rules regarding the arbitral procedure. Article 182 Para. 1 CPIL states that the parties may:

• create their own arbitration procedure;
• refer to existing institutional rules of arbitration such as the Swiss Rules of International Arbitration (www.swissarbitration.ch), the ICC Arbitration Rules or the UNCITRAL Arbitration Rules; or
• select a pre-existing body of procedural law, for example the Civil Procedure Code of the Canton of Zurich.

Despite extensive autonomy of the parties with regard to procedural issues, the minimum requirements of Article 182 Para. 3 have to be observed (BGE 119 II 388). The arbitral tribunal must:

• ensure equal treatment of the parties; and
• respect the right of both parties to be heard in adversarial proceedings.

If these minimum requirements are violated, the final award may be challenged before the State Court (Article 190 Para. 2 lit. d CPIL).

Procedural powers of the tribunal
Where the parties have failed to set forth the applicable procedure, the arbitral tribunal is free to determine the procedure, either directly or by reference to a body of law or existing rules of arbitration (Article 182 Para. 2 CPIL).

The arbitral tribunal will often consult with the parties at a very early stage of the arbitration proceedings in order to agree on the procedural framework of the proceedings.

Evidence
Article 184 CPIL gives the arbitral tribunal power to take evidence itself. Subject to rules set forth by the parties in the arbitration rules applicable according to the arbitration agreement, the arbitral tribunal will determine evidential matters.

Where legal assistance by a State Court is necessary (for example, if a witness refuses to appear voluntarily before the arbitral tribunal) the arbitral tribunal may request the assistance of the judge at the arbitral tribunal’s seat. The judge will apply his own law.

Choice of law
The substantive law to be applied by the arbitral tribunal when assessing the merits of the case may be freely determined by the parties. In the absence of a choice of law clause in the underlying contract between the parties, the arbitral tribunal will apply the law most closely connected with the subject matter of the dispute (Article 187 Para. 1 CPIL). The arbitral tribunal does not have to apply a specific set of conflict of laws rules, but it may apply an independent “closest connection” test in order to determine the applicable law. In practice, experience suggests that arbitral tribunals are rather reluctant simply to refer to a national code or similar settled body of law, but will prefer instead to resolve the dispute by interpreting the underlying contract between the parties.

Article 187 Para. 2 CPIL gives to the parties the possibility of authorising the arbitral tribunal to base its decision purely on equitable considerations, i.e. to decide ex aequo et bono.

Decisionmaking by the tribunal
According to Article 189 Para. 1 CPIL, the arbitral award will be rendered in conformity with the rules of procedure agreed upon by the parties. This provision again reflects the overriding importance of party autonomy in Chapter 12. In the absence of an agreement by the parties, the arbitral award will be made by a majority of the arbitrators or, in default of a majority, by the chairman alone (Article 189 Para. 2 CPIL).

Form, content and effect of the award
The parties may freely determine the form of the arbitral award. Unless agreed otherwise, the award must be in writing, accompanied by reasons for the decision, dated and signed. The signature of the chairman of the tribunal is sufficient (Article 189 CPIL).

Unless agreed otherwise between the parties, the arbitral tribunal may also render partial awards (Article 188 CPIL).

Upon due notification of the decision to the parties, the arbitral award becomes final (Article 190 Para. 1 CPIL). An action for annulment of the award before the Federal Supreme Court does not affect the enforceability of the award, unless the Federal Supreme Court grants a motion to suspend enforcement of the award, which is fairly rare.

Settlement and termination of proceedings
The parties may settle their dispute at any time. Upon their request, the arbitral tribunal may record the settlement in a consent award. Pursuant to Article 190 Para. 1 CPIL, proceedings terminate with notification of the final award to the parties.

Costs
Chapter 12 does not contain any provisions as to party compensation and allocation of the costs of the arbitration between the parties. It is left to the parties to determine compensation and allocation of costs in their arbitration agreement, or to refer to arbitration rules providing for such rules. If the arbitration agreement does not contain any provision as to costs and compensation, the arbitrators will decide on these issues.

Correction, interpretation and revision of the award
While Chapter 12 is silent on this issue, the Federal Supreme Court affirmed that correction and interpretation of an arbitral award is admissible in appropriate circumstances as a matter of general legal principle and established doctrine (BGE 126 III 527).

In BGE 122 III 492, the Federal Supreme Court also acknowledged the availability of the remedy of “revision” of an arbitral award if a party discovers important facts which could have been brought before the arbitral tribunal but were not known to such party despite all due diligence at that time. The revision proceedings must be initiated before the Federal Supreme Court within 30 days of discovering the facts. The Federal Supreme Court examines whether the new facts would have probably led to a different decision of the arbitral tribunal and, if so, refers the case back to the arbitral tribunal to reconsider the arbitral award (BGE 118 II 204; unpublished decision of the Federal Supreme Court dated 5 May 1999).

The jurisdiction of the courts
Pursuant to Article 7 CPIL, a Swiss court will refuse to exercise jurisdiction over a particular dispute if the subject matter of the dispute is arbitrable and if the parties have concluded an arbitration agreement, unless:

• the respondent has implicitly accepted the jurisdiction of the court by participating in the proceedings without raising any objection;
• the court determines that the arbitration agreement is prima facie (BGE 122 III 143) null and void, inoperative or incapable of being performed; or
• the arbitral tribunal cannot be constituted for reasons which are obviously attributable to the respondent’s behaviour in the arbitration proceedings.

Preliminary rulings on points of jurisdiction
Lack of jurisdiction must be asserted at the very beginning of the proceedings. The arbitral tribunal is competent to decide for itself whether it has jurisdiction over the matters brought before it. According to Article 186 Para. 1bis CPIL, the arbitral tribunal will decide on its jurisdiction notwithstanding already pending proceedings on the same matter before a State Court or another arbitral tribunal, unless there is a strong reason to stay the arbitral proceedings. The arbitral tribunal will render its decision on jurisdiction in the form of a preliminary award (Article 186 Paras. 1 and 3 CPIL).

The arbitral tribunal’s preliminary decision on jurisdiction can be challenged directly before the Federal Supreme Court, which will review de novo whether the arbitral tribunal has properly accepted or declined jurisdiction over the matters in dispute (Article 190 Para. 2 lit. b CPIL; BGE 118 II 355). Only the interim award on jurisdiction, and not the final decision, may be challenged on the ground that the tribunal lacks jurisdiction (BGE 130 III 76).

According to the Federal Supreme Court, even if the arbitral tribunal issues an interim or partial award without specifically addressing the question of jurisdiction, a party which has made a timely contest of jurisdiction of the arbitral tribunal is requested to file its challenge against such first preliminary ruling and must not wait for the final award. The Federal Supreme Court has found that by filing a preliminary or partial decision, the arbitral tribunal implicitly affirms its jurisdiction (BGE 130 III 80; unpublished decision dated 17 February 2000, case No. 4P 168/1999).

Interim protective measures
As long as the arbitral tribunal is not constituted, an application for interim measures may be filed with the State Court. There is no unanimous doctrine as to whether there is still alternative jurisdiction of the competent State Court after constitution of the arbitral tribunal. According to one opinion supported by certain Swiss scholars, the State Courts and arbitral tribunal have alternative jurisdiction, unless the parties have explicitly agreed to the contrary.

Where the arbitral tribunal orders injunctive relief, but the party concerned does not voluntarily comply with such an interim measure, the arbitral tribunal may request the assistance of the competent State Court, which will apply its own procedural law (Article 183 Para. 2 CPIL).

Both the arbitral tribunal and the State Court may make the granting of interim or protective measures conditional upon provision of appropriate security (Article 183 Para. 3 CPIL).

Obtaining evidence and other court assistance
If court assistance is necessary in order to take evidence for use in the arbitral proceedings, the arbitral tribunal, or a party with the consent of the arbitral tribunal, may ask the State Court at the seat of the arbitral tribunal for assistance. The State Court will apply its own procedural law (Article 184 CPIL). The arbitral tribunal may also ask the State Court to issue letters of request to the judicial authorities of other countries according to international conventions, in particular the Hague Convention on Taking Evidence Abroad of 1970.

The judge at the seat of the arbitral tribunal also has jurisdiction where further assistance of the judicial or administrative bodies is necessary (Article 185 CPIL).

Challenging the arbitral award before the courts
The rules on challenging arbitral awards of Chapter 12 are precisely tailored to the requirements of the international business community:

1. the Federal Supreme Court is designated as the only judicial authority competent to hear actions for the annulment of arbitral awards (Article 191 CPIL). The procedure before the Federal Supreme Court has proven to be extremely speedy. In most cases, the final decision of the Federal Supreme Court is issued no later than three to four months after

the filing of the appeal;

1. the grounds for annulment are very restrictive (Article 190 Para. 2 CPIL). Even with regard to the grounds for annulment under Article 190 Para. 2 CPIL, case law shows that the Federal Supreme Court is very reluctant to quash arbitral awards and the rate of success of appeals filed with the Federal Supreme Court is low; and
2. if the parties are not resident in Switzerland, it is possible to waive the

right to bring any action for annulment of the arbitral award with the Federal Supreme Court (Article 192 CPIL).

The action for annulment of an arbitral award has to be brought before the Federal Supreme Court in the form of an appeal (Article 191 CPIL in connection with Article 77 of the Federal Statute on the Federal Supreme Court (“BGG”)). The appeal must be presented to the Federal Supreme Court within 30 days of service of the arbitral award (Article 100 Para. 1 BGG).

Chapter 12 contains significant limitations on the possibility of challenging an arbitral award before the Federal Supreme Court. Article 190 Para. 2 lit. a–e CPIL provides that an arbitral award can only be challenged based on the following five grounds:

• improper appointment of the sole arbitrator or improper constitution of the arbitral tribunal (including the appointment of an arbitrator who is not independent (BGE 118 II 361));
• erroneous acceptance or denial of jurisdiction by the arbitral tribunal;
• failure to decide all claims brought by the parties or decisions on matters beyond the claims submitted to the arbitral tribunal;
• violation of the principle of equal treatment of the parties or the right to be heard; or
• noncompliance of the award with substantive or procedural public policy (BGE 126 III 252).

The fact that the award may be arbitrary does not qualify as a reason for annulment under Article 190 CPIL (BGE 121 III 333).

With regard to the grounds mentioned in Article 190 Para. 2 lit. a and b CPIL (constitution and jurisdiction of the arbitral tribunal), an interim or partial award can be submitted to the Federal Supreme Court (Article 190 Para. 3). As explained above, the parties must not await the final decision before filing their appeal (BGE 118 II 355 and 130 III 76). In contrast, with regard to the grounds mentioned in Article 190 Para. 2 lit. c, d and e CPIL, only the final award can be challenged. According to BGE 130 III 76, this is even the case where an interim or partial decision causes a disadvantageous, not easily reparable situation for a party to the proceedings.

If the challenge is well-founded, the Federal Supreme Court may issue a new decision replacing the arbitral award only if the arbitral tribunal erroneously denied or affirmed jurisdiction (Article 190 Para. 2 lit. b CPIL). In all other cases, the Federal Supreme Court will remit the matters in question to the arbitral tribunal for reconsideration (BGE 117 II 94).

According to Article 192 CPIL, the parties may either waive the right to have the award set aside or they may limit this right to one or several of the five aforementioned grounds for annulment, provided that two requirements are met: first, none of the parties has its domicile, habitual residence or business establishment in Switzerland and, secondly, the waiver is an “express term” of the arbitration agreement or is contained in a subsequent written agreement. Due to the requirement for an “express term”, the mere reference to a set of procedural rules excluding the right of appeal would probably not be sufficient. However, an explicit reference to Article 192 CPIL is not necessary. The Federal Supreme Court held in BGE 131 III 173 that the right to challenge was validly waived by an arbitration agreement in which the parties referred to the UNCITRAL Arbitration Rules and added that the decision of the arbitral tribunal “shall be final and binding on the parties who exclude all and any rights of appeal from all and any awards insofar as such exclusion can validly be made.”

Where the parties exclude all grounds for annulment, enforcement of the arbitral award in Switzerland will be governed by the New York Convention (Article 192 Para. 2 CPIL). Thus there will be a judicial review by the court enforcing the award in accordance with Article IV and V of the New York Convention.

Domestic awards
Each party may, at its own expense, deposit a copy of the arbitral award with the State Court at the seat of the arbitral tribunal. Upon request by a party, the State Court will issue a declaration of enforceability. Alternatively, at the request of a party, the arbitral tribunal will certify that the arbitral award was made in accordance with the provisions of Chapter 12. Such a certificate has the same effect as depositing the arbitral award with the State Court (Article 193 CPIL).

Subject to the aforementioned Article 192 Para. 2 CPIL, any arbitral award issued by an arbitral tribunal having its seat in Switzerland will be enforced anywhere in Switzerland (Article 122 Para. 3 of the Swiss Constitution).

Foreign awards
Pursuant to Article 194 CPIL, the 1958 New York Convention governs the recognition and enforcement of all foreign arbitral awards in Switzerland. By including an express reference to the New York Convention in Article 194 CPIL, the Swiss legislature broadened the applicability of the Convention unilaterally, in that it now applies regardless of whether the country of origin of the award is a signatory of the Convention; any and all foreign arbitral awards will therefore be recognised and enforced in Switzerland pursuant to the provisions of the New York Convention.

If a foreign State Court exercises jurisdiction over a particular dispute despite the existence of a valid arbitration agreement in accordance with Article II of the 1958 New York Convention, the foreign State Court’s decision will not be recognised in Switzerland by virtue of Article 25 lit. a CPIL (BGE 124 III 83).

With its rules on international arbitration in Chapter 12 of the Swiss Code of Private International Law and the new Swiss Rules of International Arbitration, Switzerland affirms its position as a leading location for international commercial arbitration.

Switzerland’s arbitration law combined with its neutrality, political stability, geographical position, arbitration institutions and the expertise of its legal profession make it uniquely suitable for resolving international arbitration disputes.

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