The rules will enter into force on 1 January 2023, together with the new Article 697n of the Swiss Code of Obligations (CO).
The Swiss Arbitration Centre recently announced its new Supplemental Swiss Rules for Corporate Law Disputes along with a model statutory arbitration clause. These rules will enter into force on 1 January 2023, together with the new Article 697n of the Swiss Code of Obligations (CO).
The new Article 697n CO states that arbitration agreements for corporate disputes can now be included in Swiss companies’ articles of association. This applies to Swiss companies Limited by Shares, Swiss Partnerships Limited by Shares and Swiss Limited Liability Companies but other entities such as associations may choose arbitration for corporate law disputes as well. The dispute must then be settled by an arbitral tribunal seated in Switzerland.
Unless the articles of association provide otherwise, the statutory arbitration clause is binding for the company, the company’s governing bodies, the member of the governing bodies and the shareholders. Article 697n CO further provides that the articles of association may regulate the specifics of the arbitration proceedings, including by referring to institutional rules of arbitration. In any case, it must be ensured that persons affected by the arbitral award are informed about the commencement and termination of the proceedings and are granted the adequate opportunity to participate in the proceedings.
The new Supplemental Swiss Rules for Corporate Law Disputes implement the requirement stated in Article 697n CO to inform the persons who are affected by the arbitral award and to include them in the proceedings. The Supplemental Swiss Rules contain six articles and suggest a model statutory arbitration clause for companies to include in their articles of association.
The six articles cover the following topics:
To learn more about the Supplemental Swiss Rules for Corporate Law disputes, the Swiss Arbitration Centre also published an explanatory note, which can be found here.
The advantages of resolving corporate disputes by means of arbitration instead of state courts are that disputes can be resolved more efficiently with less options for appeal and are thus likely to be less expensive. The arbitration proceedings may be led by chosen arbitrators with expert knowledge in a specific field. Furthermore, the involved parties are more flexible in selecting their own arbitration rules and schedule. Lastly, arbitration leads to a private resolution with a confidential award. For companies, keeping their sensitive business information out of the public eye, can be of great advantage.
Our team of arbitration experts are happy to advise you on all questions in this area. We look forward to hearing from you.
