Switzerland Updates its International Arbitration Law

PILA, international arbitration law

Overview

On 19 June 2020, the Swiss Parliament enacted the revision of Chapter 12 of the Swiss Private International Law Act (PILA), which is expected to enter into force in early 2021. The revision modernizes and clarifies the provisions on international arbitration in specific areas, while retaining the concision and flexibility that has made Switzerland’s international arbitration law so successful. On the one hand, central elements of the case law established by the Swiss Federal Supreme Court in the field of international arbitration will be transferred into the PILA. On the other hand, the user-friendliness of the PILA is further enhanced and party autonomy is strengthened.

 

Key Changes

The key changes and clarifications to Chapter 12 of the PILA are the following:

  • Possibility to file submissions to the Federal Supreme Court in English in setting-aside as well as revision proceedings against arbitral awards and clarification that such challenges can be filed regardless of the amount in dispute;
  • Clarification of the scope of application, according to which Chapter 12 of the PILA applies if at least one party to the arbitration agreement did not have its domicile, habitual residence or seat in Switzerland at the time of conclusion;
  • Possibility of arbitration clauses in unilateral legal instruments such as trust deeds, wills or articles of association;
  • Clarification that emails and other forms of modern communication are means that allow the arbitration agreement to be evidenced by text;
  • If the parties have not agreed on an arbitral institution or the procedure for constituting the arbitral tribunal: (i) a three member panel will be appointed by default (if the number of arbitrators is not agreed on); (ii) state court may appoint all members of the arbitral tribunal in case of a multiparty arbitration; (iii) jurisdiction of the Swiss state court first seized if there is no agreed seat;
  • Granting direct access for an arbitral tribunal seated outside of Switzerland or a party to foreign arbitration proceedings to a state court at the place where an interim measure is to be enforced or at the place where evidence is to be taken.

Conclusion

The update to Switzerland’s international arbitration law must be welcomed as it further enhances the attractiveness of Switzerland as a seat for international arbitrations. With the exception of allowing submissions to the Swiss Federal Supreme Court in English, the revision is not a giant leap forward – but that was not necessary. Rather, it brings about helpful modernizations and clarifications that will lead to an increase in the user-friendliness of Switzerland’s international arbitration law.

July 2020 | Authors: Dr. Jonatan Baier, Corina Moschen

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