Article 39(1) provides, inter alia, that in case of a discontinuation of the arbitral proceedings, the fees of the Arbitral Tribunal may be less than the minimum amount resulting from the Schedule of the costs of arbitration (Appendix B).
Article 39(3) provides that, as a rule, the Chairman shall receive between 40% and 50% and each eo-arbitrator between 25% and 30% of the total fees in view of the time and effort spent by each arbitrator. The Arbitral Tribunal shall itself decide on the apportionment of the fees among its members. However, Article 38(a) of the Swiss Rules, which reflects the UNCITRAL Arbitration Rules, requires that the fees of the Arbitral Tribunal be stated separately for each arbitrator. This means that the Arbitral Tribunal will have to proceed to an internal apportionment at the very latest by the time of signing the award.
Under Article 41(2), the Arbitral Tribunal may, under certain circumstances, request separate deposits from the parties, thus departing from the principle that each party has to deposit an equal amount as an advance on costs.
The Schedule of the costs of arbitration (Appendix B. which is based on Article 39(2)) sets forth the scale of costs of the arbitration and is divided into four sections. Of particular importance are the first two sections concerning the registration fee, the arbitrators' fees and the Chambers' administrative costs.
The registration fees must be paid when a Notice of Arbitration or a counterclaim has been submitted. The registration fees are not refundable and vary between CHF 4,500 and CHF 8,000, depending on the amount in dispute.
In addition to the registration fees, the Chambers receive administrative costs when the amount in dispute exceeds CHF 2 million. The calculation of these administrative costs follows the same ad valorem principle as the fees of the arbitrators, reaching their maximum level of CHF 50,000 for an amount in dispute of CHF 100 million.
The arbitrators' fees are computed on the basis of a scale with a minimum and maximum for a given amount in dispute.
lt should be noted that the Swiss Rules provide that a sole arbitrator will receive 40% of the total fees that would apply if there had been a three-member Arbitral Tribunal. This rule reflects the Important role and responsibility of the sole arbitrator.
Section 2.4 of Appendix B provides that combined value of claims and counterclaims is taken as the figure for the amount in dispute. This approach also applies to set-off defences, unless the Arbitral Tribunal concludes that such set-off claims will not require significant additional work.
Finally, it should be pointed out that any income earned on deposits made by the parties is credited in the final computation of the costs of arbitration in favour of the party that made the deposit.
6. Conclusion
The Swiss Rules, as any other set of arbitration rules -especially those newly adopted, are the subjects of ongoing critical review. For some, the modifications to lhe model of the UNCITRAL Arbitration Rules go too far and include too many concessions to Anglo-Saxon concepts. Others disagree with positions that the Swiss Rules adopt as to particular issues.
Critical remarks have been made in respect to the provision on exclusion of liability or joinder of different arbitral proceedings. Some consider that the arbitrators' fees are too low (particularly if compared with the hourly rates of counsel to the parties). Others feel that the fees are too high. Some have expressed the feeling that the Swiss Rules are far too detailed.
Other consider that the Rules should have been more detailed and should, for instance, not have been limited to the principle enunciated in Article 15 ("Subject to these Rules, the Arbitral Tribunal may conduct the arbitration in such manner as it considers appropriate, provided that the Arbitral Tribunal shall ensure equal treatment of the parties and their right to be heard"). These critics consider that the hearings of the witnesses, requests for production of documents, the sequence, number and organisation of submissions and many other procedural Issues should have been regulated in further detail.
Considering that critics are of different origin and of different legal cultures, thus implying different practices and expectations, it is impossible to consider all positions, which are often exclusive of each other. On the other hand, it bears reminding that the Chambers wanted to
maintain to a reasonable extent the UNCITRAL Arbitration Rules, particularly in view of their widespread familiarity. lt would have been possible to radically revise the UNCITRAL Arbitration Rules, leaving in the end only the name itself, but this would have been an exercise of doubtful value. Even completely new arbitration rules would not have been sheltered from criticism. since there will always be a difference of views over a vast number of procedural options.
The Swiss Rules remain close to the UNCITRAL Arbitration Rules but have been, on the one hand, "institutionalised" and, on the other hand, modernised on the points considered necessary by the drafters. These rules are furthermore not written in stone but will have to be adapted on the basis of future practical experience and certainly also when UNCITRAL itself will undertake a revision of its rules. Presently, it should be stressed for the benefit of all users - those who have already in the past expressed their trust by adopting one of the former arbitration rules of a Swiss Chamber of Commerce as well as first-time users -that the Swiss Rules represent a new and modern product, based on principles which have proven their efficiency in international arbitration. Beyond the~§) considerations it is important to note that the Swiss Rules will be applied by a large corpus of experienced persons from the Swiss and foreign arbitration community, be it at the level of the Arbitration Committee or the lawyers or the arbitrators involved in the proceedings. lt is ultimately their competence and experience that are the best guarantors of the efficiency of the Swiss Rules.
COMPARISON OF THE SWISS RULES WITH THE UNCITRAL ARBITRATION RULES AND OTHERS Marc Blessing'
1. Imaginative Q & A
Q: ICC, LCIA, WIPO and some 200 other arbitral institutions around the globe praise their Rules. Why on earth do we need the Swiss Rules?
MB: Switzerland has a long-standing tradition for hosting international arbitration under several institutional rules, foremost under those of the ICC. However, without an had little visibility in the international arena, with almost no marketing efforts.
How to explain the success of their arbitration systems?
MB: This is true. The reputation, for instance of the Zurich Chamber's hosting of international arbitration, is built on the "word of mouth" of many parties (and indeed major enterprises from all continents} who have been involved in a Zurich Chamber of Commerce arbitration during the past decades, and had been particularly satisfied by the procedure (even though they may have
"lost• their case).
Hence, already in the 1960s/1970s, the Zurich Chamber, for instance, played an important (sometimes involving claims of USD one Billion plus} have been referred entertained half a dozen different systems. In any event, this has
Geneva, Lausanne, Ticino and Zurich?
MB: A first attempt to unify the systems was undertaken in the 1980s by Professor Pierre Lalive, then President of the Swiss Arbitration Association (ASA). When taking over the presidency from him, I started a second initiative, but the ground was not as yet ripe.
The difficulty is that, in contrast to France and England, Switzerland - as small as it is · is proud of having not only one centre, but several ones, and this had to be fully recognized. The Swiss Rules now provide for the various different Chambers of Commerce, six in total, to administer the cases according to the seat chosen, but combining their
"wisdom" and experience, and under the
"roof" of the same Rules.
Q: The Swiss are innovative people;
why building the Rules on the model of an
"old-timer", such as the UNCITRAL Arbitration Rules?
MB: The UNCITRAL Arbitration Rules are fit, fair and robust, and tested in thousands of arbitrations with no shipwrecks or other disasters. Their format is perfect. They could relatively easily be converted into institutional rules. Nevertheless, each part of the model has been carefully reconsidered and overhauled so as to meet the most modern
2. The UNCITRAL Arbitration Rules: A veteran? Or fit tor the 21st century?
Hardly any arbitration rules have played a more significant role than those drafted by UNCITRAL. For two decades. in the 1960s/70s, the UN ECE Rules (UN Economic Commission for Europe Rules) had enjoyed wide recognition, particularly for settling disputes in East-West relationships under the area of the cold war. And the succeeding UNCITRAL Arbitration Rules drafted in the mid-1970s and approved in 1976 have, beyond doubt, marked one of the most successful sets of rules for the settlement of disputers arising in the framework of worldwide trade. They have served as models for numerous institutional arbitration rules promulgated after 1976. And they served as the guideline for worlking out (during 1978-1985) the UNCITRAL Model Law; among many others, they also served as the guideline for multinational conventions such as the lnter-American Convention.
Since the early 1980s, the UNCITRAL Arbitration Rules stood their test of time when serving as the rules governing the proceedings of the I ran-US Claims Tribunal and, since then, an uncounted number of arbitrations have been successfully conducted under the UNCITRAL Arbitration Rules.
The positive experience has shown: The rules are sound, robust and fair.
This statement, however, does not mean that, benefiting from the most impressing development of international arbitration during the past 30 years, there would not be room for certain improvements.
As the following discussion will show, the UNCITRAL Arbitration Rules may also serve as an almost perfect model lending themselves to be converted from an ad hoc procedure into an institutional procedure, i.e. an arbitration procedure under the aegis of an arbitral institution, such as the Swiss Chambers.
3. Over the time, some modifications to the UNCITRAL Arbitration Rules became desirable: The Swiss Rules already incorporates them!
Several arbitration specialists, among them Professor Pieter Sanders and Freshfields' Jan Paulsson, have recently reflected on a modernisation of the UNCITRAL Arbitration Rules.
However, when writing up their reports, they may not as yet have been aware that the Swiss Rules, already in their earlier drafts, had incorporated most of the points touched upon by them, and even more aspects have been considered for improvement. The table below will refer to some of the major points.
Aspects that should be carefully The aspects are dealt with by the Swiss reviewed for making the UNCITRAL Rules as follows:
Arbitration Rules fit for the 21•1 Century:
More modern approach to the "in writing- (See hereto the comments to Article 1 (1 )).
requirement" regarding the arbitration agreement.
Consider the use of more modern means of (See comments to Article 2(1) below).
communication.
Providing for the filing of an Answer prior to This was fully implemented and constitutes constituting the Arbitral Tribunal. a significant improvement of the
UNCITRAL Arbitration Rules.
Providing for instltutional support in setting This is fully catered for and, indeed, may be up the Arbitral Tribunal. seen as one of the most significant advantages of an institutional arbitration (see Articles 5 to 14 ).
Consolidation and joinder are particularly Article 4 of the Swiss Rules provides for a delicate topics, which were not covered by very sound solution.
the UNCITRAL Arbitration Rules.
Avoiding unnecessary costs regarding small The Swiss Rules properly solve the matter, claims: the UNCITRAL Arbitration Rules providing for a sole Arbitrator for small offer no particular solution. claims and, equally importantly, providing
for an expedited procedure.
Improving the procedure in case of a The Swiss Rules provide a sophisticated challenge or in case of the replacement of and modern solution in Articles 11, 12, 13 an arbitrator: The UNCITRAL Arbitration and 14.
Rules are not ideal where such problems arise.
Limiting abusive procedural requests would Articles 15(1) and 15(2) provide more seem desirable. powers to the Arbitral Tribunal to preserve the integrity of the arbitral proceedings (see the comments hereto below).
Aspects that should be carefully The aspects are dealt with by the Swiss reviewed for making the UNCITRAL Rules as follows:
Arbitration Rules fit for the 2151 Century:
The UNCITRAL Arbitration Rules do not The Swiss Rules require such timetable require a provisional timetable to be (see Article 15(3)); this requirement will established early on in the proceedings. also encourage the Arbitral Tribunal and the parties to conduct a proper organizational meeting or conference right at the start of the proceedings.
There is no provision regarding the use of a Article 15(5) of the Swiss Rules do cater for
secretary. that
There is no reflection of a general duty to The Swiss Rules reflect this in Article 15(6);
proceed in good faith. although this is a somehow "programmatic Article", it nevertheless is the true "centre-piece" of arbitral proceedings and of each party's duty.
The determination of the seat of the Arbitral This problem is solved through the Tribunal may raise problems under the authority given to the institution in Article UNCITRAL Arbitration Rules. 16(1); nevertheless, arbitral proceedings may be conducted at any other place deemed appropriate.
More clear reference regarding the duty, The rather soft rule contained in the incumbent on the parties, to submit the UNCITRAL Arbitration Rules is clearly documents in support of legal briefs. reinforced by Article 18(3) of the Swiss
Rules.
The handling of set-off has been the subject This matter is now very clearly solved by matter of very intensive debate and Article 21(5) of the Swiss Rules; the controversies, and radically different importance of this can not be under-approaches have been advocated under estimated.
different legal systems.
Aspects that should be carefully The aspects are dealt with by the Swiss reviewed for making the UNCITRAL Rules as follows:
Arbitration Rules fit for the 21"1 Century:
The UNCITRAL Arbitration Rules do not The Swiss Rules, wisely so, have not been contain specific solutions for the taking and burdened by an additional set of rules; this reception of evidence through documents would no longer seem necessary, given the
and witnesses. fact that the 1999 IBA Rules have received
such a world-wide recognition; arbitrators and parties may find it useful to take additional guidance from these IBA Rules.
if deemed necessary; they fully harmonize with the Swiss Rules.
The UNCITRAL Arbitration Rules do not The Swiss Rules address this very clearly clarify that interviewing potential witnesses in Articles 25(2) and 25(6).
is proper in international arbitration (in contrast to the rules of a certain number of local bar associations).
Interim measures, their requirements and The Swiss Rules do not anticipate any their enforcement, have been a subject change as may ultimately be proposed by matter of most intensive debate during the UNCITRAL; Article 26, however, provides last few years, in connection with Article 17 all the flexibility; the particular requirements of the UNCITRAL Model Law. to be satisfied are not fixed; the measures which may be considered by the Tribunal are in no way limited; security for any measure may be asked for and the Tribunal may immediately make a cost decision.
The UNCITRAL Arbitration Rules do not The Swiss Rules do provide for that in authorize an Arbitral Tribunal to determine Article 32(1 ); this is certainly welcome; the and award costs in connection with an provision is broader than that of Article interim award or partial award. 31(2), last sentence, of the 1998 ICC
Rules.
Aspects that should be carefully The aspects are dealt with by the Swiss reviewed for making the UNCITRAL Rules as follows:
Arbitration Rules fit for the 2151 Century:
The UNCITRAL Arbitration Rules, on the This, as discussion has shown, is too determination of the law(s) applicable, narrow; the arbitrators should be authorized absent a choice by the parties, only refers to to determine the "rules of law" (see the
"the law", which is too limitative. comments to Article 33(1) below).
Consider to provide for the authority of a This is not yet reflected in the Swiss Rules.
truncated Arbitral Tribunal.
The UNCITRAL Arbitration Rules lack clarity The Swiss Rules provide for a schedule;
and foreseeability in respect of fees and however, they leave the authority to the
costs. arbitrators to determine their own fees, but
this determination is subject to the scrutiny by the Chambers (see Articles 38 and 40(4)).
The UNCITRAL Arbitration Rules provide The Swiss Rules provide a bracket of 40-for no particular repartition of fees between 50% 40-for the chairperson and 25-30% 40-for the chairperson and the eo-arbitrators. each eo-arbitrator; the widened bracket (as compared to the 40:30:30 rule in ICC proceedings) is certainly appropriate.
The UNCITRAL Arbitration Rules have the The Swiss Rules contain a more clear disadvantage to request both parties to provision regarding advances and also advance 50% of the costs, which may not provide for the flexibility to fix separate be appropriate in some cases, particularly deposits (similar to the practice of !CC and where there is a substantial counterclaim or other institutions); this is certainly an
set-off claim. improvement (see Article 41 (2)).
A majority award should no longer be The Swiss Rules empower the chairperson
required. to decide alone, should there be no
majority, in harmony with Article 189(2) of the Swiss Private International Law Act ("PILA").
Awards need not necessarily be signed at This problem is clearly solved (see the the place of arbitration. comments to Article 32(4) and footnote 34).
Aspects that should be carefully The aspects are dealt with by the Swiss reviewed for making the UNCITRAL Rules as follows:
Arbitration Rules fit for the 21'1 Century:
The UNCITRAL Arbitration Rules do not The Swiss Rules provide for the adequately deal with small claims. appointment of a sole arbitrator and for an expedited procedure to deal with small claims (see the comments to Article 42}.
The UNCITRAL Arbitration Rules do not The Swiss Rules have adopted carefully adequately address matters of considered provision in Article 43.
confidentiality.
The UNCITRAL Arbitration Rules do not The Swiss Rules address this matter by adequately protect the Arbitrators and the providing immunity except in case of very institution from unjustified suits. serious breaches of incumbent duties (see
Article 44 }.
4. Model Arbitration Clause
it has become standard practice for institutional rules to suggest a model arbitration clause for use by the parties. The clause, on purpose, is broad and contains the "magic" words -the significance of which have been discussed in an uncounted number of arbitral awards around the globe, legal writings and court judgments- such as "any", "dispute, controversy or claim", "arising out of', "or in relation to", "including ... ".
However, the expression "finally settled ... "was avoided, using only the word "settled'. The background is that in accordance with Article 190(1) of the PI LA, any arbitral award is deemed to be final, but nevertheless will be subject to a "one-shot" judicial scrutiny on very
However, the expression "finally settled ... "was avoided, using only the word "settled'. The background is that in accordance with Article 190(1) of the PI LA, any arbitral award is deemed to be final, but nevertheless will be subject to a "one-shot" judicial scrutiny on very