Conference Proceedings
Reference
The Swiss rules of international arbitration
KAUFMANN-KOHLER, Gabrielle (Ed.), STUCKI, Blaise (Ed.)
KAUFMANN-KOHLER, Gabrielle (Ed.), STUCKI, Blaise (Ed.). The Swiss rules of international arbitration . Basel : Swiss Arbitration Association, 2004, 310 p.
Available at:
http://archive-ouverte.unige.ch/unige:33476
Disclaimer: layout of this document may differ from the published version.
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ASA Special Series No. 22 May 2004
THE SWISS RULES OF INTERNATIONAL ARBITRATION
ASA Swiss Arbitration Association Conference of January 23, 2004 in Zurich
Edited by Prof. Gabrielle Kaufmann-Kohler and Blaise Stucki
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Schweiz. Vereinigung fUr Schiedsgerichtsbarkeit Associazione svizzera per l'arbitrato
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ASA Secretariat attn. Or. Rainer FOeg Aeschenvorstadt 67 P.O.Box
CH-401 0 Base I Tel: 41 61 270 60 15 Fax: 41 61 270 60 05
Association Suisse de I'Arbitrage Schweiz. Vereinigung fOr Schiedsgerichtsbarkeit Swiss Arbitration Association
E-mail : info@arbitration-ch.org
Website: www.arbitration-ch.org
TABLE OF CONTENTS
Preface... page V Gabrielle Kaufmann-Kohler
Program of the conference ... .
Some observations on the Swiss Rules of International Arbitration ... .. page 1 Wolfgang Peter
Comparison of the Swiss Rules with the UNCITRAL Rules and others... page 17
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Marc Blessing
The expedited procedure under the Swiss Rules of International Arbitration ... page 67 Elliott Geisinger
Management of the proceedings and quality control under the Swiss Rules.. page 87 Daniel Wehrli/B. Gino Koenig/Ciaudius Triebold
Financial aspects: the costs of arbitration ... page 111 Markus Wit1h
The UNCITRAL Rules as applied in the I ran-US Claims Tribunal ... page 119 Lucy Reed/Stephanie Hill Rosenkranz
Annexes:
Swiss Rules of International Arbitration:
English version ... page 131 German version ... page 14 7 French version ... page 165 Italian version ... page 183 Russian version ... page 199 Spanish version ... page 217 Chinese version ... page 235 Appendixes to the Swiss Rules of International Arbitration (in English only):
Appendix A: Addresses of the Chambers of Commerce ... page 253 Appendix B: Schedule of the Costs of Arbitration ... page 255 Appendix C: Arbitrators' fees ... page 259 Chapter 12 of the Swiss Private International Law Act ... page 261 UNCITRAL Arbitration Rules ... page 267 Memorandum on the revision of the UNCITRAL Arbitration Rules ... page 285 Jan Paulsson
Starkung des Schiedsplatzes Schweiz: neue internationale Schiedsordnung in
Kraft ... page 289 Bemhard Meyer-Hauser
List of participants ... page 293
PREFACE
This volume of the ASA Special Series is devoted to an important milestone in Swiss arbitration history: the Swiss Rules of International Arbitration. Launched in January 2004, the Swiss Rules were the topic of the ASA Conference held on January 23, 2004 in Zurich, which had record attendance of 260 people. The papers presented at the ASA Conference are gathered in this volume, together with the text of the Swiss Rules in the different languages available thus far (an Arabic version is in preparation), as well as certain additional materials.
lt has been a long road. These new uniform rules are an achievement for which all Swiss arbitration practitioners can be legitimately proud. This achievement was only possible because of the very significant efforts invested by many groups and individuals. The six Swiss Chambers of Commerce active in the area of arbitration, their chairs, and those in charge of managing arbitrations in each organisation, all made major contributions. In addition, a number of ASA members most of whom contributed to this volume, have
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accompanied the unification process at its various stages. The credit must go to all of them.
While celebrating the launch of the Swiss Rules, one should not forget that there are many different types of arbitration taking place in Switzerland- ad hoc arbitrations and arbitrations under many different sets of rules, including particularly arbitrations administered by the ICC, with which the Swiss arbitration community has very strong links. While supporting the Swiss Rules, ASA will continue to maintain and improve these strong links.
The Swiss Rules are based on the UNCITRAL Arbitration Rules. Since the adoption of the UNCITRAL Rules, which are also reproduced in this volume, many years have passed and there have been various different legal developments and practical experiences. The drafters of the Swiss Rules have endeavoured to take this evolution in the law and practice of arbitration into account. The Swiss Rules thus represent an attempt to update the UNCITRAL Rules. For this reason, it appeared quite natural to broaden the scope of the ASA Conference to cover possible revisions to the UNCITRAL Arbitration Rules. This matter was specifically addressed by Jernej Sekolec, Secretary General of UNCITRAL, as well as by several other speakers. Let us hope that the Swiss Rules and this volume initiate a debate that will be pursued in other fora and within UNCITRAL.
Geneva, May 2004
Prof. Gabrielle Kaufmann-Kohler President of ASA
Association Suisse de I'Arbitrage
Schweizerlsche Vereinigung fur Schiedsgerichtsbarkeit Associazione Svizzera per I'Arbitrato
Swiss Arbitration Association
ASA Conference
January 23, 2004 9:00 a.m. to 5:00 p.m.
The Swiss Rules of International Arbitration
Marriott Hotel Zurich
www .arbitration-eh .org
9.00-9.20 WELCOME ADDRESSES Prof. Gabrielle Kaufmann- Kohler, President of ASA Jean-Luc Strohm, Chairman, Association of Chambers of Commerce and Industry of Switzerland
Chair: Dr. Paolo Michele Patocchi Lenz & Staehelin, Geneva
President, Arbitration Committee of the Swiss Chambers of Commerce
9.20-9.50
9.50-10.15
10.45 - 11.10
11.10- 11.30
11.30 - 12.00
INTRODUCTORY COMMENTS TO THE NEW SWISS RULES
CHANGES AND ADDITIONS TO THE UNCITRAL RULES: AN OVERVIEW
EXPEDITED PROCEDURE
A VIEW FROM UNCITRAL
PANEL AND FLOOR DISCUSSION
Dr. Wolfgang Peter, Python Schifferli Peter & Associes, Geneva
Dr. Marc Blessing, Bar &
Karrer, Zurich, Honorary President of ASA
Elliott Geisinger, Schellenberg Wittmer, Geneva
Dr. Jernej Sekolec, UNCITRAL, Vienna
Dr. Paolo Michele Patocchi
14.15-14.35
14.35- 14.55
15.30 " 15.50
15.50-16.10
16.10-17.00
Chair: Prof. Pierre Lalive Lalive & Partners, Geneva Honorary President of ASA MANAGEMENT OF THE PROCEEDINGS AND QUALITY CONTROL
FINANCIAL ASPECTS
SELECTED ISSUES ABOUT THE APPLICATION OF THE UNCITRAL RULES IN OTHER FORA
A VIEW FROM ABROAD
PANEL AND FLOOR DISCUSSION- CONCLUSIONS
Dr. Daniel Wehrli, Gloor &
Sieger, Zurich
Dr. Markus Wirth, Hamburger, Zurich
Lucy Reed, Freshfields Bruckhaus Deringer LLP, New York
Dr. V. V. Veeder, Essex Court Chambers, London
Prof. Pierre Lalive
Wolfgang Peter·
1. Introduction
Switzerland occupies a far more important rank in international commercial arbitration than its size might suggest. As a matter of fact, parties involved in international transactions quite often wish their arbitration to take place on neutral ground. Many of them opt for the seat of the arbitration to be in Switzerland and quite a number also provide for Swiss law to govern their contracts. In this traditional homeland of international arbitration, an experienced arbitration community has emerged, serving many ad hoc and institutional arbitrations. The observer will, however, note that in matters of legislation and regulation of arbitration, Switzerland has struck an independent course. lt is not the aim of this article to set out the constitutional and historical reasons which gave birth on the one hand to the Concordat intercantonal sur l'arbitrage, which today only applies to internal arbitration, and on the other hand to the Chapter 12 of the Swiss Private International Law Act (hereafter "PILA"), applicable to international arbitrations. May it suffice to observe that international arbitration in Switzerland differs from that in many other countries in that the legislation on arbitration is not based on the UNCITRAL Model Law. However, this choice of an autonomous arbitration statute has not hindered the development of arbitration in Switzerland, since the 20 or so concise provisions of Chapter 12 of the PI LA have now been shown over the last 15 years to constitute a flexible and efficient basis for the entire range of international arbitrations in Switzerland.
There have, however, been delays on the institutional level. In several European countries arbitral institutions offer national-level institutional solutions for users of international arbitration. Switzerland, however, has remained diversified or rather fragmented in respect to its institutions over a long period. Thus, a number of Chambers of Commerce and Industry in various Swiss cities offered institutional arbitration on the basis of often fundamentally varying systems of rules. While this diversity has not prevented the Chambers, namely of Geneva and Zurich, to see a significant increase in the arbitrations that they have administered, the lack of unity and the profound difference between the systems in these cities engendered a lack of transparency especially for foreign users. This diversity prevented the Swiss Chambers of Commerce from harnessing the full potential of cities in Switzerland as arbitral seats. Consequently, the Swiss Chambers of Commerce have now decided to unify their arbitration rules and to create the common institutional instruments in order to administer arbitrations, which adopt the new "Swiss Rules of International Arbitration".
Partner, Python, Schifferli, Peter & Associes, Geneva.
A primary factor in the choice of the content of these unified rules was the desire to provide users of international arbitration in Switzerland, who are predominantly foreign parties, with a system which is familiar and recognised on the international level. it is therefore no surprise that the UNCITRAL Arbitration Rules have been adopted as a basis. The initiators of the project were nonetheless mindful that the UNCITRAL Arbitration Rules go back to 1976 and are outdated on a certain number of issues in light of current international arbitration practice and as compared to more recent arbitration rules such as the WIPO Rules or the revised versions of the ICC and LCIA Rules. Since, however, the UNCITRAL Arbitration Rules are widely used on the international level. the Swiss Chambers of Commerce preferred to take them as a starting point, and make appropriate modifications and adaptations. Thus were born the Swiss Rules of International Arbitration ("SRIA" or "Swiss Rules"), which the Chambers of Base!, Berne, Geneva, Ticino, Vaud, and Zurich have been applying since January 1, 2004.
The Swiss Rules disclose four kinds of modifications and adaptations to the UNCITRAL Arbitration Rules:
(a) Transformation of the ad hoc nature of the rules into institutional arbitration rules;
(b) Adaptation of certain provisions in conformity with modern arbitral practice;
(c) Certain entirely new provisions;
(d) A financial system.
In what follows these are examined in turn.
2. Institutional arbitration
The UNCITRAL Arbitration Rules constitute an ad hoc arbitration system. it was therefore necessary to "institutionalise" these rules with a view to their application by the six Chambers of Commerce in the framework of their administration of international arbitrations. A single Arbitration Committee under the conduct of a chairman was therefore created (described in paragraphs {d) and (e) of the introductory part to the Swiss Rules). The Arbitration Committee is in charge of administrating arbitration proceedings. its internal organisation and working procedures are based on unified internal rules issued by the six Chambers of Commerce. The Arbitration Committee comprises about 30 members, which, in terms of their role, can be divided into three groups:
(a) The legal secretaries- one of whom is employed by each of the six Chambers-, who is in charge of the administrative issues arising in the arbitrations entrusted to that Chamber. These six legal secretaries are lawyers with experience and know-how In the administration of arbitration proceedings.
(b) The "rapporteurs", who are practitioners of international arbitration, assist the arbitral secretaries in respect to legal questions raised by the application of the Swiss Rules.
(c) The members of the Special Committee (one member and one substitute for each Chamber), who are lawyers with important international arbitration experience. The Swiss Rules provide for this Special Committee to render decisions with respect to challenge (Article 11) and revocation of arbitrators (Article 12), as well as issues concerning the designation of the seat of the arbitration (Article 16). lt will also be consulted in respect to complex legal questions, such as possible pathological arbitration clauses (Article 3(6)) or other complex problems that may arise.
Under the direction of its chairman, the Arbitration Committee ensures the follow-up administration and quality of the institutional system, as well as the development of a body of consistent "case law·. The Swiss Rules have been designed to offer a "light" administration although with no sacrifice in quality and efficiency. The Arbitration Committee, which is referred to hereafter as ''the Chambers", in conformity with the terminology of the Swiss Rules, plays a decisive role at the stage of initiation of proceedings and the constitution of the Arbitral Tribunal, as well as in respect to a number of other important matters, including the financial system. The experience of its members, in particular those forming the Special Committee. is a key aspect of the confidence that the system will engender amongst parties.
In the devising of the Swiss Rules much consideration was given to ensuring that only what was strictly necessary was included, the avoidance of any overly-bureaucratic or unduly restrictive regulation, while nevertheless achieving the necessary level of monitoring and administration of procedures. With these goals in mind it was necessary to seek balanced solutions. Thus. for instance. with respect to the remuneration of the arbitrators -a highly sensitive subject-it is left to the Arbitral Tribunal to determine itself its remuneration, within a stipulated range, which varies in accordance with the amount in dispute. The Arbitral Tribunal must, however, first consult the Chambers on this matter. Finally, while it is possible in exceptional cases for the Arbitral Tribunal's remuneration to exceed the maximum amount, this can no longer be achieved upon simple consultation but requires the preliminary approval of the Chambers (Appendix B, Section 2.3).
Anyone sceptical about this system should be reminded that arbitrations were successfully administered and monitored for many years by the various Chambers of Commerce in Switzerland until the end of 2003 on the basis of arbitration rules which were generally less elaborate and by using more modest means than those established under the Swiss Rules.
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2.1 Articles 1 to 14 - Initiation of Arbltral Procedures and Constitution of the Arbitral Tribunal
it should be pointed out that Articles 1 to 14 of the UNCITRAL Arbitration Rules on the initiation of arbitral procedures and the constitution of the Arbltral Tribunal needed particularly to be modernised and adapted to institutional arbitration.
Parties are free to designate the seat of the arbitration. At present. Article 1(2) provides for the parties to choose a seat "anywhere in Switzerland". it is unclear whether this provision is mandatory. In any event, the Chambers of Commerce are considering amending this provision and deleting the words ·anywhere in Switzerland". it is anticipated that this amendment will be effective in the course of 2004. Wherever the seat, Article 16(2) makes it clear that the Arbitral Tribunal may conduct the proceedings at any place it deems appropriate, which allows the hearing of witnesses and the holding of meetings anywhere in Switzerland or abroad.
If the parties choose a seat in Switzerland, the seat may be anywhere, including in a city outside the territory of the six cantons of the Chambers of Commerce, which together have promulgated the Swiss Rules. The Swiss Rules apply equally to arbitrations having their seat in Switzerland but outside of the territory of one of these six cantons.
it is important to note that the Swiss Rules apply to any arbitration in which the Notice of Arbitration was or is submitted on or after 1 January 2004. A more conservative approach would have been to have the Swiss Rules apply only to those disputes arising out of arbitration agreements entered into after January 1, 2004. In practice, that would have deferred the application of the Swiss Rules by several years. This approach has not been adopted. Consequently, all international arbitrations that arise from contracts referring to the previous arbitration rules of one of the six Swiss Chambers of Commerce that promulgated the Swiss Rules will ordinarily be dealt with under the Swiss Rules. By virtue of the principle of autonomy, however, the parties may exclude, by a specific agreement, the application of the Swiss Rules in favour of the arbitration rules previously used by one of the six Chambers of Commerce.
The most important innovation in Article 3 fills a gap in the UNCITRAL system: henceforth, the Respondent will submit an Answer to the Notice of Arbitration. In the UNCITRAL system, the constitution of the Arbitral Tribunal is made without giving the Respondent the opportunity of expressing its views on matters as important as the jurisdiction of the Arbitral Tribunal, the claims made in the Notice of Arbitration and the existence of any possible counterclaim. This disequilibrium and absence of Information important for a proper understanding of the dispute prior to the constitution of the Arbitral Tribunal are now remedied. Article 3 of the
Swiss Rules requires the Respondent to submit within 30 days an Answer to the Notice of Arbitration addressing jurisdiction, the claims made in the request for arbitration and the relief requested by the Respondent. In particular, the Respondent is invited to raise any counterclaim or set-off defence with his Answer to the Notice of Arbitration and to provide its views and suggestions on the constitution of the Arbitral Tribunal. The Respondent must provide these indications "to the extent possible" as the Notice of Arbitration, which may be very concise in the UNCITRAL system, does not always permit Respondents to elaborate in a very precise and complete manner on all above-mentioned points.
The Respondent's obligation in principle to give notice of any counterclaim or set-off defence at the stage of his Answer to the Notice of Arbitration has a particularly important function in cases falling under Article 3(10), a significant innovation of the Swiss Rules: any arbitration where the amount in dispute is below CHF 1 million will in principle be conducted under the expedited procedure and by a sole arbitrator (Article 42(2)). Decisions on the application of the expedited procedure are made in reliance upon the Notice of Arbitration and the Respondent's Answer thereto. Amounts sought in counterclaj!:flS as well as set-off defences are added to amounts sought in claims in the determination of the amount in dispute. If the Notice of Arbitration requests relief in an amount less than CHF 1 million and if the Respondent in its Answer omits to signal its intention to advance a counterclaim or seek set- off, or does not provide any figures in this relation, then the accelerated procedure will apply notwithstanding any amount subsequently counterclaimed or raised as set-off.
lt is important to note that the Chambers are responsible for monitoring the process of the Notice and the Answer, which may occasionally raise complex questions. This stage will be an excellent opportunity to demonstrate the experience and competence of the Chambers.
Article 4(1), which is another important innovation of the Swiss Rules, provides that the Chambers may decide to join a new case with arbitral proceedings already pending and this not only if the new case is between the same parties but also if the new case involves different parties than those in the existing arbitral proceedings. The Chambers must adopt their decision after consultation with the parties to all proceedings and the Special Committee. The Chambers must take into account all circumstances, including the links between the two cases and the state of advancement of the existing proceedings.
Article 4(2) confers upon the Arbitral Tribunal the power to decide upon requests from third parties to participate in arbitral proceedings already pending or requests by parties to the arbitral proceedings seeking the joinder of third parties in the arbitration. The Arbitral Tribunal must consult with all parties and take into account all circumstances it deems relevant and applicable.
As it was not considered practicable to set out in the Swiss Rules a comprehensive designation of all conceivable scenarios, the drafters preferred to simply indicate that consolidation of arbitral proceedings and the participation of third parties may be ordered, thus affording the appropriate bodies (the Chambers. or the Arbitral Tribunal, as applicable) the necessary flexibility in deciding on each individual case.
2.2 Articles 5 to 14-Composition of the Arbitral Tribunal
Article 5(1) provides that the effectiveness of designations of arbitrators is subject to confirmation by the Chambers. The Chambers have no obligation to give reasons when they refuse to confirm an arbitrator. Since the Swiss Rules are based on the principle of party autonomy, such a refusal to confirm will remain extremely rare. As a rule, parties consider the freedom to appoint "their" arbitrator to be a quintessential aspect of arbitration and therefore the Chambers will be slow to exercise their powers in this area. The risk of acting otherwise is that the Swiss Rules become discredited and ultimately abandoned. Article 5(2) provides that where the designation of an arbitrator is not confirmed, either a new designation must be made {according to the arbitration clause in question) by the party/parties or the arbitrators, or the Chambers will proceed directly to make the appointment. This exercise by the Chambers of this direct appointment power is intended in principle to remain exceptional and will mainly be used where it appears necessary to prevent a party from delaying or hindering the efficient course of the proceedings.
Article 6, which deals with the number of arbitrators, is faithful to established principles, but it may be noted that, in certain circumstances, the Chambers are required to advise the parties that, despite the provision in their arbitration agreement for a three-person Tribunal, they should consider agreeing to resolution of their dispute by a sole arbitrator.
Finally, Article 6(4) confirms the application of the expedited procedure {Article 42(2)) providing for a sole arbitrator where the amount in dispute does not exceed CHF 1 million. lt should be noted that, if the arbitration agreement provides for a three-member Arbitral Tribunal, a sole arbitrator cannot be imposed upon the parties. In this event, the dispute is to be decided by three arbitrators applying the expedited procedure. Nonetheless, the arbitrators' remuneration, calculated as in any other arbitration on the basis of the ad valorem scale of Appendix B to the Swiss Rules, shall in no event be less than the fees resulting from the application of the hourly rate of Section 2.8 of Appendix B, presently CHF 350 per hour.
Depending on the amount in dispute and the complexity of the case, the parties may have to pay a multiple of the ad valorem scale of Appendix B. In other words, If the parties insist on having a three-member Arbitral Tribunal, they may pay a high price for this privilege. 11 is hoped that the effect of this will be to convince the parties to accept a sole arbitrator when the amount in dispute is below CHF 1 million. Articles 7 and 8 on the appointment of
arbitrators provide that, in the first instance, it is the parties who are free to decide, and that the intervention of the Chambers only comes in at a fallback level. Beyond this important expression of the autonomy principle, these two provisions also cover the constitution of Arbitral Tribunals in multi-party proceedings, whether in the form of a sole arbitrator or a panel of three arbitrators. In the event of a three-member Arbitral Tribunal (and unless the agreement of the parties provides for a specific appointment procedure), the Claimant(s) and the Respondent(s) will designate, by an internal agreement within each group, their arbitrator, and the two arbitrators thus designated (or in case of disagreement, the Chambers) will appoint the presiding arbitrator. Where a party or group of parties fail(s) to designate an arbitrator in multi-party proceedings, the Chambers may appoint all three arbitrators and shall specify the presiding arbitrator. Furthermore, in the case of a multi- contract multi-party situation, one may combine Article 8 with Article 4 in order to reach in principle a global consolidation, provided that all the arbitration clauses in the various contracts refer to the Swiss Rules.
Articles 9 to 12 treat the independence and challenge of arbitrators. Article 9(1) contains a specific reference to the impartiality of the arbitrator, in addition to the criterion of independence of the arbitrator, while the PILA (Article 180) only explicitly refers to the criterion of independence. lt is also important to note the decisive role of the Special Committee with respect to issues of the challenging and revocation of arbitrators.
Finally, Article 13 on the rep! acement of arbitrators provides that in all cases where an arbitrator ceases to act, for whatever reason, he will be replaced on the basis of a new designation by the party concerned. The drafters of the Swiss Rules were of the view that it would be contrary to the principle of party autonomy to empower the Chambers to proceed directly to the appointment of a replacement arbitrator. If however, the replacement designation made by a party should not be confirmed by the Chambers (Article 5), then the latter may, on the basis of Article 5(2), proceed directly to make the replacement appointment.
As regards the consequences of the replacement of an arbitrator, the Swiss Rules no longer focus primarily on the repetition of hearings. Where the title of Article 14 of the UNCITRAL Arbitration Rules reads "Repetition of hearings in the event of the replacement of an arbitrator", the title of Article 14 of the Swiss Rules is "Consequences of the replacement of an arbitrator" which heralds the new orientation. As a rule, the proceedings shall no longer be repeated but resume at the stage where the arbitrator who was replaced ceased to perform his duties, unless the Arbitral Tribunal decides otherwise. A recent decision of the Swiss Federal Tribunal in relation to an ICC arbitration confirmed that, if the newly appointed arbitrator refuses to participate in the proceedings following a majority decision of the Arbitral Tribunal not to repeat prior steps of procedure, then the Arbitral Tribunal can validly continue
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its activity (ATF 128 Ill 239). If the arbitrator persists in his refusal to participate, then this
"truncated" Tribunal can validly deliberate and make an award. lt should be mentioned that, in some legal writings, the notion of "truncated Tribunal" is reserved to the event of death, resignation, challenge or revocation of an arbitrator. In all these events, the arbitrator in question will be replaced in accordance with Article 13 of the Swiss Rules. If, however, the concept of "truncated Tribunal" is extended also to contemplate a situation where an arbitrator refuses to co-operate (or, to take an extreme case, is impeded from doing so by
"his" party), then it may be contended that the afore-mentioned case law of the Swiss Federal Tribunal forms a basis for the Arbitral Tribunal validly to proceed with the arbitration, provided that the absent arbitrator is regularly informed and may rejoin the panel at any time.
3. Adaptation of certain provisions to modern arbitration practice 3.1 Articles 15 to 30-Arbltral Proceedings
The Swiss Rules have adopted Articles 15 to 30 of the UNCITRAL Arbitration Rules with limited changes and additions. While the drafters of the Swiss Rules wanted, on the one hand, to do justice to modern practice and the comparative law of arbitration, they also wished, on the other hand, to limit modifications to what was deemed necessary, in view of the familiarity of the UNCITRAL Arbitration Rules.
Article 15(1) stresses that the Arbitral Tribunal shall ensure equal treatment of the parties and their right to be heard. While these are public policy concepts, this does not mean that a party may Invoke its right to be heard in order to request from an Arbitral Tribunal endless additional hearings or other procedural steps. This results from the Swiss Federal Tribunal's case law rendered in relation to the principles of equal treatment and the right to be heard enshrined in the PILA.
Article 15(3) now requires that the Arbitral Tribunal shall prepare a provisional timetable for the arbitral proceedings. This fairly frequent feature of international arbitration should contribute to the efficiency of the arbitral process and provide the Chambers with a useful means of monitoring.
Article 15(5) gives the Arbitral Tribunal the right to appoint a secretary after consultation with the parties.
Finally, Article 15(6) requires from all participants in the arbitral proceedings to act in accordance with the requirements of good faith. This provision should not be understood as a routine incantation, but was adopted in order to reinforce the authority of the Arbitral Tribunal to remind the parties that not everything is admissible on the arbitral battlefield.
Article 16(1) on the seat of the arbitration deals with situations where the parties have not designated the seat of the arbitration or where such designation is unclear or incomplete. In
any such event, the Special Committee may itself determine the seat of the arbitration or may require the Arbitral Tribunal to do so.
Article 16(2) reinforces the corresponding formulation in the UNCITRAL Arbitration Rules to the effect that the Arbitral Tribunal may decide where the proceedings shall be conducted without prejudice to the designated seat of the arbitration.
Finally, Article 16(4) makes it clear that the award shall be deemed to be made at the seat of the arbitration. This removes the ambiguity of the present UNCITRAL formulation, which does not state with clarity whether the arbitrators may validly deliberate in a particular venue and thereafter make and sign the award in another venue than the designated seat of the Arbitral Tribunal.
Article 18(3) concerning the Statement of Claim provides that, as a rule, the Claimant shall annex to its Statement of Claim all documents it deems relevant. Under the UNCITRAL Arbitration Rules, the Claimant is under no obligation to attach any exhibit to the Statement but may simply provide a reference list. The drafters of the Swiss Rules did not wish to maintain this total freedom for Claimants but preferred to adapt the present rule so that Respondent and the Arbitral Tribunal receive as soon as possible the documents on which Claimant relies.
Article 19(2) provides that, as a rule, Respondent must equally annex to its Statement of Defence all documents on which it relies.
Article 21(5) introduces an important innovation in conferring jurisdiction upon the Arbitral Tribunal to hear a set-off defence even when the relationship out of which this defence is said to arise is not within the scope of the arbitration clause or is the object of another arbitration agreement or choice of forum clause. Thus, a set-off, which may be invoked up to the amount claimed by Claimant, may result from another contract, which is not governed by the arbitration clause. However, a counterclaim is only admissible if it is governed by the arbitration clause. The drafters of the Swiss Rules wished to draw a distinction between purely defensive set-off lapsing upon the rejection of the main claim, and independent counterclaims, which may be dealt with even if the main claim has been rejected. This differing treatment has generated controversy among legal writers, but it was necessary to strike a balance between, on the one hand, the right of Respondents to raise defences and, on the other hand, respect for other arbitration clauses which, if deemed violated, may compromise the validity of the arbitral award. While the approach of the Swiss Rules falls short of what some would have wished in respect of admission of counterclaims arising out of other contracts, the Swiss Rules are still an important step ahead as compared to the UNCITRAL Arbitration Rules, thus promoting efficiency of proceedings.
Article 25 makes it very clear that any person may be a witness. This therefore expressly excludes the application of the notion found in some rules of civil procedure, and often applied in arbitral proceedings, pursuant to which parties and officers of legal persons (i.e.
companies) cannot be "real" witnesses.
Furthermore, Article 25 specifically introduces the concept of expert witness.
Finally, a new para. 6 to Article 25 makes it clear that it is not improper to interview witnesses or expert witnesses. This provision was introduced in order to neutralise the rules of most systems of civil procedure that prohibit or severely circumscribe contacts with a potential witness for fear of undue influence. Thus. para. 6 now replicates international arbitration practice which permits "preparation" of witnesses, in particular, assisting them in the establishment of their written statements. Article 25(5) specifically provides for the use of written statements.
In respect of interim measures of protection, Article 26 provides that, at the request of either party, the Arbitral Tribunal may order any interim measures it deems necessary or appropriate. By departing from the formulation of the UNCITRAL Arbitration Rules which appeared too restrictive and indeed outdated in view of prevailing International arbitration practice, the drafters of the Swiss Rules wanted to stress the considerable freedom and discretion given to Arbitral Tribunals in respect of the object as well as the nature of interim measures that may be ordered.
3.2 Articles 31 to 41 - The Award
Article 31(1) supplements the text of its UNCITRAL homologue to allow the presiding arbitrator to make the award alone if no majority can be reached on the panel. This principle is in line with Article 189(2) of the PI LA. Even if this provision is not likely to be applied often in practice, it will significantly affect the dynamics of the panel's decision-making. For example, undoubtedly, under the threat of an award made by the presiding arbitrator alone, the eo-arbitrators will strive to reach common ground with him. it should also be noted that this provision is in line with modern practice. Article 33(1) on the applicable law has been decidedly modernised and harmonised with Article 187 of the PI LA: the Arbitral Tribunal must decide the case in accordance with the rules of law agreed upon by the parties or, in the absence of a choice of law, by applying the rules of law with which the dispute has the closest connection.
Article 35 supplements the text of its UNCITRAL homologue on the interpretation of the award by providing that a party may, within a time limit normally not exceeding 30 days, comment on any request for interpretation. A rule of similar effect was Introduced in Article 36 on the correction of the award and Article 37 on additional awards.
4. New provisions: Articles 42 to 44-Expedited Procedure
Vis-a-vis the UNCITRAL Arbitration Rules, the Swiss Rules include a new Section V (Article 42) on expedited procedure.
Para. 1 provides that, with the agreement of the parties, the arbitrai proceedings are to be conducted in accordance with an expedited procedure. The following consequences ensue:
(a) The Chambers may shorten the time-limits for the appointment of arbitrators.
(b) The number of written submissions is reduced.
(c) Awards are made upon either a single hearing or upon documents alone.
(d) Awards must be rendered within six months from the date the Chambers transmitted the file to the Arbitral Tribunal.
(e) The arbitral award may contain only summary reasons, or, if the parties agree, no reasons at all.
As it has already been mentioned above, Article 42(2) provides that, where the amount in dispute is below CHF 1 million, proceedings are in principle to follow the expedited procedure. The Chambers are empowered to make this determination and the agreement of the parties is not necessary. Furthermore, in order to limit the costs of arbitrations where amounts in dispute are low, there will in principle be a sole arbitrator. Where the parties have opted for a three-member panel in their contract, they will not be forced to accept a sole arbitrator but adverse financial consequences may attach, in the form of a minimum hourly rate for the arbitrators of CHF 350 (Section 2.8 of Appendix B to the Swiss Rules). The UNCITRAL Arbitration Rules do not include provisions on confidentiality and exclusion of liability. Based on modern practice, in particular certain more recent arbitration rules. the Chambers decided to deal with these questions by introducing two new provisions (Section VI, Articles 43 and 44).
Article 43(1) determines the conditions under which the parties themselves and all other persons or institutions that have participated in the procedures are bound to keep confidential all awards and procedural orders as well as all materials submitted by another party in the arbitral proceedings.
Furthermore, Article 43 makes it clear that the deliberations of the Arbitral Tribunal are confidential and regulates the conditions under which an arbitral award may be published.
Exclusion of liability (Article 44) is a controversial subject. The Chambers ultimately decided to provide for the immunity of all persons or institutions that participated in the proceedings, unless there was an act or omission, which is shown to constitute deliberate wrongdoing or
extremely serious negligence. This formulation of "extremely serious negligence" was introduced in order to stress that in the analysis of the act or omission the negligence must appear so serious that the exclusion of liability would become intolerable. In order to achieve such a restrictive interpretation of the concept of negligence, the drafters of the Swiss Rules deliberately formulated the test to be "extremely serious negligence" and not "serious negligence" alone. This approach has taken into account the question of the status of the arbitrators. While Swiss law does not explicitly provide for the legal immunity of arbitrators, it was felt that they could not simply be treated as ordinary agents of the parties. The objective of the Swiss Rules is to avoid a situation where a party disappointed by the result of arbitral proceedings, and having only very limited means of recourse against the award, is tempted to sue the arbitrators or the Chambers for liability, as a means of appeal against the award.
Finally, once the award has been made and all possibilities for correction or interpretation have lapsed or have been exhausted, the persons and institutions who participated in the proceedings have no obligation to make statements to any person about any matter concerning the arbitration and the parties may not seek to make any of these persons a witness in any legal or other proceedings arising out of the arbitration.
5. The financial system
5.1 In general
While the basic regulation on costs under Articles 38 to 41 of the UNCITRAL Arbitration Rules has been maintained, a precise cost and fees computation system had to be adopted for the Swiss Rules. it takes into account the position and the interests of the three groups concerned, namely the parties, the arbitrators, and the Chambers.
The parties will not be exposed to arbitrary decisions by the Arbitral Tribunal as to the costs.
An ad valorem system has been defined which permits the parties to anticipate the fees of the arbitrators. While the Arbitral Tribunal may, based on the criteria of Article 39(1), freely determine the amount of its fees, it is nevertheless limited by the minimum and maximum amounts provided for under the scale for a given amount in dispute. Therefore, the Arbitral Tribunal's discretion is only relative and furthermore limited by the obligation to consult the Chambers on any decision as to the assessment and apportionment of the costs. The Chambers in turn are not permitted to provide routine approvals and the arbitrators should proceed to a very serious examination of the circumstances before they depart from the opinion of the Chambers. As a consultation of the Chambers, which would only come at the stage of the draft award, is clearly too late, the arbitrators have to inform the Chambers of any request for an advance on costs, which will permit the Chambers to intervene as necessary from the very beginning of the arbitration.
The Swiss Rules have sought to establish equilibrium between divergent interests. Thus the parties are not exposed to undue pressure by the Arbitral Tribunal while the latter retains a discretion within pre-determined limits which, in principle, are deemed to be sufficient. By way of example, for an amount in dispute of CHF 10 million the scale provides a minimum fee of CHF 151,000 and a maximum of CHF 600,000 in total for three arbitrators. Within these limits, as determined by the amount in dispute, the Arbitral Tribunal is required to apply the further criteria of Article 39 (complexity of the subject matter, time spent by the arbitrators, and any other relevant circumstances of the case) in order to determine the amount which it will submit for consultation to the Chambers. In this respect. it is also important to point out that the Chambers are consulted on the basis of the draft award (Article 40(4)) as it is not possible in the abstract, without reviewing the draft award, to determine if the Arbitral Tribunal has properly applied the criteria of Article 39. Finally, it is important to note that the maximum fees provided for under the Swiss Rules may only be exceeded with the prior approval by the Chambers.
5.2 Analysis of particular points of the financial syste':l:'
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 ambition to compete with the ICC, several Swiss Chambers are looking back on a long- standing tradition of their own in hosting international arbitration.
Q: The Chambers of Commerce in Switzerland, such as the Zurich Chamber and the Geneva Chamber, seem to have 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
Partne;, B~r & Karrer, Zurich
role in East-West arbitrations. and it sUII does. Numerous large-scale disputes in the pharmaceutical sector, the chemical industry, telecommunications, In M & A disputes and in international commercial disputes of any kind (sometimes involving claims of USD one Billion plus} have been referred to the Zurich Chamber. I am less informed about the cases and workload of the Geneva Chamber, but I understand that it has earned a significant recognition as well.
Q: The "outside world" hardly
understood why the Swiss and their Chambers of Commerce entertained half a dozen different systems. In any event, this has been a magnificent confusion!
MB: This is exactly the point, and I have no better answer than to refer to the typical Swiss federalism where each major city (as small as it may be} is proud of its own tradition and identity.
Q: Why has it taken such a long time to harmonize and unify the various different rules of the Chambers of Commerce established in Base/, Bern,
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 expectations. Perhaps the Swiss Rules are now the most modern rules -but this is for the users to evaluate.
Q: What about arbitration agreements entered prior to 31 December 2003 and where parties had agreed to a (for instance) Zurich Chamber of Commerce arbitration precisely because of the well-known Zurich system (under which the chair-person was always designated by the Zurich Chamber from Its approved list of chair-persons)?
MB: I have no doubt that these parties will find it very easy to accept that their case will now be handled under the new Swiss Rules. As the report below will show, the Swiss Rules, based on the most widely known UNCITRAL Arbitration Rules, may claim to provide an indeed excellent procedural framework for international arbitration.
[End of the interview]
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% for the chairperson and 25-30% 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 limited grounds, pursuant to Articles 190 and 191 PlLA, such scrutiny being exercised by the Swiss Federal Tribunal in Lausanne.1
The arbitration clause must be taken to exclude any reference, by the parties signing the same, to any state court for seeking a final determination2 of any subject matter falling under the scope and reach of the arbitration clause.
Unless both parties are non-Swiss and have waived any possibility for setting aside the award pursuant to Article 192 of the PI LA.
As is known and generally accepted, parties may seek temporary remedies (interim relief) from national courts, without thereby waiving the benefit of the arbitration clause or arbitration agreement (see Article 26(3) of the Swiss Rules).
