Switzerland is among the most preferred seats for arbitration, as revealed by an international Survey from 2018. Its attractivity stems from factors such as its political neutrality, the well-established legal framework, the qualified arbitration practitioners, and its efficient institutions.
Some key points relevant to the choice of Switzerland as a seat of arbitration will be discussed below.
Legal Framework in Switzerland
Swiss law provides a comprehensive and modern legal framework for international arbitration procedures. International arbitration in Switzerland is governed by the 12th Chapter of the Federal Act on Private International Law (“PILA”), which came into force on 18 December 1987.
The most recent revisions aim to modernise and facilitate comprehension of the rules it provides for.  They include, for example, assistance from Swiss courts in support of arbitration, codified legal remedies against arbitral awards, and the replacement of textual references to the Swiss Civil Code of Procedure by corresponding provisions for more clarity.
In the same spirit of modernisation, since 1 January 2023, Article 697n of the Swiss Code of Obligations (“CO”) allows Swiss companies to include arbitration clauses for corporate law disputes in their articles of association. This only applies to domestic arbitration, however. Article 697n reads:
1 The articles of association may provide that disputes under company law be adjudicated by an arbitral tribunal that has its seat in Switzerland. Unless the articles of association provide otherwise, the arbitration clause is binding on the company, the corporate bodies of the company, the members the corporate bodies and the shareholders.
2 The procedure before the arbitral tribunal is governed by the provisions of Part 3 of the Civil Procedure Code; Chapter 12 of Federal Act of 18 December 1987 on Private International Law does not apply.
3 The articles of association may regulate the details, in particular by reference to arbitration regulations. They shall in any event ensure that persons who may be directly affected by the legal consequences of the arbitral award are notified of the instigation and conclusion of the proceedings and may participate in appointing the arbitral tribunal and in the proceedings as an intervening party.
This arbitration-friendly framework largely contributes to Switzerland’s attractivity as a seat of arbitration.
Arbitral Institutions in Switzerland
The two leading institutions are:
First, the Swiss Arbitration Centre, formerly known as the Swiss Chamber’s Arbitration Institution (“SCAI”). It is an arbitration institution based in Geneva, Switzerland, and offers dispute resolution services based on the revised Swiss Rules of International Arbitration (the “Swiss Rules”) and the Swiss Rules of Commercial Mediation.
The new Swiss Rules took effect on 1 June 2021 and apply to all arbitrations commencing on or after that date. This set of rules provides, among others, for paperless submissions, virtual hearings, a new cost provision (see tables of costs under the 2021 Swiss Rules) and an easy-to-use online cost calculator for cases administered under the 2021 Swiss Rules.
The Swiss Arbitration Centre is also putting into effect “Supplemental Swiss Rules for Corporate Law Disputes”, according to the specificities of the aforementioned corporate law disputes under Article 697n of the Swiss Code of Obligations.
Second, the International Chamber of Commerce, known as the “ICC“. The ICC is the world’s leading arbitration institute, with a Swiss association based in Zurich, offering dispute resolution on the basis of the ICC Rules of Arbitration.
Expedited Procedures in Switzerland
Switzerland is known to be efficient in the administration of small and mid-size disputes. In this respect, the new Swiss Rules provide for an expedited procedure if the amount in dispute does not exceed CHF 1,000,000  or upon the parties’ agreement.
This procedure includes, for example, the appointment of a sole arbitrator, a limited number of written submissions and only one hearing. In this case, the award will be rendered within six months of receiving the file.
Some of these provisions were already provided for in the previous versions of the Swiss Rules but have been restructured for clarity.
Setting Aside an Arbitral Award in Switzerland
In Switzerland, only very limited reasons can give ground for an arbitral award to be set aside. The parties can challenge an arbitral award by way of annulment proceedings on the basis of one of the grounds exhaustively listed in Article 190(2) of the PILA. These grounds are the following:
- the tribunal was irregularly constituted or the sole arbitrator was improperly appointed;
- the tribunal wrongly accepted or declined jurisdiction;
- the tribunal’s decision went beyond the claims submitted to it or failed to address one of the items of the claim;
- the principle of equal treatment of the parties or the right of the parties to be heard was violated; or
- the award is incompatible with Swiss public policy.
To set aside an award, the application must be filed within 30 days of the communication of the award. Only the Swiss Federal Tribunal (the highest Swiss judicial authority) is competent to hear such a case. There is even the possibility to exclude any challenge proceedings.
Overall, this ensures that arbitration awards are effectively secured after they are rendered.