On 1 June 2021, two important changes occurred regarding Swiss arbitrations: The Swiss Chambers’ Arbitration Institution became the Swiss Arbitration Centre, and the revised Swiss Rules of International Arbitration entered into force. They are applicable to all arbitrations in which the notice of arbitration is filed on or after the mentioned date. In this blog, we will discuss the changes which are most important in practice.
The Swiss Rules of international Arbitration (“Swiss Rules”) were first adopted in 2004 and then revised in 2012. In 2021, “Swiss arbitration” experiences a new brush up: The Swiss Chambers’ Arbitration Institution (“SCAI”) joined forces with ASA and has become the Swiss Arbitration Centre. At the same time, the Swiss Rules were revised a second time to adapt them to recent developments and best practice in international arbitration. The main changes of these “New Swiss Rules” lie in the strengthening of the institution, the promotion and facilitation of the digitalization of the proceedings, including virtual hearings, and the introduction of a progressive multi-party regime.
From an institutional point of view, SCAI was renamed the Swiss Arbitration Centre, a Swiss company whose current shareholders are the Swiss Arbitration Association (“ASA”) and the Swiss Chamber of Commerce. The Swiss Rules were renamed to the “Swiss rules of International Arbitration of the Swiss Arbitration Centre”. For sake of continuity, the model arbitration clause has been designed so that also arbitration agreements which entered into force before 1 June 2021 and therefore still refer to SCAI remain valid and are recognized and applied by the Swiss Arbitration Centre.
Under the New Swiss Rules, the role of the institution was strengthened by increasing the powers of the Arbitration Court, which is assisted by the Secretariat. From now on, the Secretariat receives electronic copies of all communication in an arbitration and is responsible for notifying the parties with the award. Moreover, the Secretariat fixes cost deposits, which until now was a task of the arbitral tribunal. Accordingly, the arbitral tribunal’s costs are likely to be lower than under the previous Rules, and the administrative fees will be slightly higher (see Annex B of the New Swiss Rules).
The New Swiss Rules further take into account that arbitral proceedings often involve more than two parties. Hence, they contain new and more detailed provisions regarding cross-claims, joinders and interventions. Parties asserting cross-claims or requesting a joinder can submit a notice of claim. Like under Swiss state procedural law, the arbitral tribunal, after having been constituted, will have broad discretion on whether to admit third parties to the proceedings or not.
Moreover, the New Swiss Rules expressly provide for the possibility to request the consolidation of arbitration proceedings. The decisions, however, on whether proceedings shall be consolidated or not, is in the Court’s exclusive discretion, which is in line with the institution’s increased powers.
Further amendments reflect the development of technology and modern trends, which were strongly accentuated by the recent pandemic and the restrictions of physical meetings as well as the presence at work-related premises resulting thereof. In particular, the New Swiss Rules provide that from now on, hearings can be held “remotely by videoconference or other appropriate means" as decided by the arbitral tribunal after consulting with the parties, giving the arbitrators and parties broad discretion in this respect. Of course, issues of data protection and cybersecurity need to be addressed and ensured in a sensible and pragmatic manner. In addition, court filings and all communication regarding the arbitral proceedings can from now on be made exclusively electronically. With this amendment, the New Swiss Rules reflect the positive experience of the arbitration stakeholders during the last twelve months in terms of virtual hearings and take up a strong need voiced by the arbitration community.
Organization of the Proceedings
Another point is of more of housekeeping nature reflecting standing practice in international arbitration: The New Swiss Rules provide that an initial case management conference shall be held at the beginning of each proceeding where, among others, the general conduct of the proceedings and the above-mentioned issues of data protection and cybersecurity are to be addressed. During the proceeding, further organizational conferences can be held if it is deemed appropriate by the parties or the arbitral tribunal. Moreover, arbitration proceedings can be stayed at any time should the parties agree to try to resolve their dispute by mediation (“mediation window”).
Independence of the Arbitrators
In line with a recent decision of the Swiss Federal Tribunal where a decision of the Court of Arbitration for Sport was set aside due to the apparent impartiality of an arbitrator, further provisions were added to the New Swiss Rules to strengthen the independence, impartiality and disclosure of arbitrators. From now on, arbitrators are obliged to disclose any and all circumstances to the Secretariat and the parties which accrued before or arise during the arbitration and which may give rise to justifiable doubts regarding their impartiality.
The revision of the Swiss Rules does not only codify best practices which were already regularly applied in international arbitration, but also include a number of provisions which ensure that Swiss arbitration is up to date, in particular regarding digitalization and multi-party arbitration. Moreover, by strengthening the role of the institution, arbitrators will be relieved from certain administrative duties, the expediency of the arbitration proceeding will be furthered and cost-sensitivity raised. We therefore believe that the New Swiss Rules will further enhance the attraction, the practicability and efficiency of the already well-functioning Swiss arbitration.