Arbitration: Switzerland to update its international arbitration law moderately

PILA, international arbitration law

The Swiss Federal Council has issued a draft proposal for a revision of Chapter 12 of the Swiss Private International Law Act ("PILA"), the Swiss international arbitration law. The proposed update is a moderate one. It aims at implementing the key elements of the Swiss Federal Supreme Court's jurisprudence developed in the field of international arbitration and improving the user- as well arbitration-friendliness of the Swiss international arbitration law in general.

The draft proposal contains the following key amendments to the PILA:

  • explicit statutory provisions regarding corrections and revisions of arbitral awards (the Swiss Federal Supreme Court already accepted these remedies in its case law);
  • simplified form requirement for arbitration agreements (sufficient that only one party fulfills the form requirements for an arbitration agreement to which the other party consents in some way);
  • changes of the parties' habitual residence, seat, or place of business after the conclusion of the arbitration agreement does not change the applicability of the PILA;
  • explicit statutory provision on arbitral tribunal’s power and duty to render a decision on arbitration costs (PILA is currently silent with respect to the issue of costs and compensation);
  • filings to the Swiss Federal Supreme Court shall also be possible in English (how-ever, the decision of the Federal Supreme Court itself will be in an official language of Switzerland, and not English).

Chapter 12 PILA has proven its value over the years. Its short, pragmatic and arbitration-friendly approach is one of the reasons why Switzerland has been in the past and remains a key place for international arbitration. The draft proposal for a revision with moderate adaptations does not change this approach and must be welcomed.

The Swiss Federal Council invited interested parties to comment on the draft proposal until the end of May 2017. Depending on the outcome of this consultation procedure, the draft proposal might undergo slight adaptations before it is discussed and voted on in the Swiss Parliament.

* Dr. Jonatan Baier

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