The newly-revised 2021 Swiss Rules of International Arbitration (“2021 Swiss Rules”) took effect on 1 June 2021 and apply to all arbitrations commencing on or after that date, superseding the 2012 version previously in force, unless the parties otherwise agree.
Originally enacted on 1 January 2004, and having undergone only one revision in 2012, the 2021 Swiss Rules are now again revised, but only slightly, with the aim to streamline the procedures and to align with current technological trends. We discuss the key 2021 changes below.
“SCAI” Is Renamed to “Swiss Arbitration Centre”
As mentioned in the Introduction of the 2021 Swiss Rules, in 2021, the Swiss Chambers’ Arbitration Institution (“SCAI”), i.e., an association created by the Chambers of Commerce and Industry of Basel, Bern, Geneva, Ticino, Vaud, Zurich and later Neuchâtel and Central Switzerland (the “Chambers of Commerce”) in order to administer arbitrations, was converted into a Swiss company and renamed Swiss Arbitration Centre Ltd. (“Swiss Arbitration Centre”).
Arbitration agreements that refer to the SCAI or the Chambers of Commerce will continue to be valid and binding and will be applied by the Swiss Arbitration Centre as the legal successor of the SCAI (Introduction, para. c of the 2021 Swiss Rules).
Model Arbitration Clause
As in the case with other arbitral institutions, the Swiss Arbitration Centre offers its own model arbitration clause to interested parties for adoption in their commercial contracts. The model arbitration clause was slightly updated in 2021 to reflect the name change of the arbitral institution (from SCAI to Swiss Arbitration Centre), as follows:
Any dispute, controversy, or claim arising out of, or in relation to, this contract, including regarding the validity, invalidity, breach, or termination thereof, shall be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Arbitration Centre in force on the date on which the Notice of Arbitration is submitted in accordance with those Rules.
The number of arbitrators shall be … («one», «three», «one or three»);
The seat of the arbitration shall be … (name of city in Switzerland, unless the parties agree on a city in another country);
The arbitration proceedings shall be conducted in … (insert desired language).
Under the 2021 Swiss Rules, the default rule is that hard copies are no longer required and it suffices for a Notice of Arbitration and an Answer to such Notice to be submitted to the Secretariat only electronically, unless the Secretariat requests otherwise or the claimant requests that the Secretariat notify a hard copy to the other party or parties (Articles 3(1) and 4(1) of the 2021 Swiss Rules).
Under Article 3(1) and (7) of the 2012 Swiss Rules, a Notice of Arbitration and an Answer to such Notice had to be submitted to one of the several designated physical addresses of the Secretariat.
Article 27(2) of the 2021 Swiss Rules now expressly provides that hearings may be held “remotely by videoconference or other appropriate means, as decided by the arbitral tribunal after consulting with the parties.” This change is in line with the shift from physical to virtual hearings accelerated by the COVID-19 pandemic.
Article 25(4) of the 2012 Swiss Rules already provided that witnesses and experts may be examined by videoconference (“The arbitral tribunal may direct that witnesses or expert witnesses be examined through means that do not require their physical presence at the hearing (including by videoconference)”). This possibility is preserved in what is now Article 27(5) of the 2021 Swiss Rules.
Cross-claims, Joinder, Intervention
The 2021 Swiss Rules introduce new detailed provisions regarding cross-claims, joinder and intervention, aiming to accommodate increasingly common multi-party and multi-contract arbitrations.
In particular, Article 6 of the 2021 Swiss Rules provides that a party asserting a claim against another party other than a claim in the Notice of Arbitration or a counterclaim in the Answer to the Notice of Arbitration (cross-claim), or a party asserting a claim against an additional party (joinder), or an additional party asserting a claim against an existing party (intervention) shall do so by submitting a notice of claim to the Secretariat or, if already constituted, to the arbitral tribunal.
Upon consultation with all other involved parties, the Court or the tribunal shall then make a decision on the cross-claims, joinder or intervention, taking into account all relevant circumstances.
The possibility for a party to request the consolidation of arbitration proceedings is now expressly provided for in Article 7(1) of the 2021 Swiss Rules (“Upon request of a party and after consulting with all parties and any confirmed arbitrator, the Court may consolidate arbitration proceedings pending under these Rules.”).
Article 4(1) of the 2012 Swiss Rules merely provided that “the Court may decide, after consulting with the parties and any confirmed arbitrator in all proceedings, that the new case shall be consolidated with the pending arbitral proceedings”, meaning that it was not immediately apparent whether a party could request the Court to do so.
The updated wording of the 2021 Swiss Rules is more felicitous, aptly clarifying this issue.
Appointment of Arbitrators
Under the 2012 Swiss Rules, when the parties had not agreed upon a procedure for the constitution of the arbitral tribunal in multi-party proceedings, it was provided that a 30-day time limit would be set by the Court for claimants to designate an arbitrator and a subsequent 30-day period for respondents to do so (Article 8(4) of the 2012 Swiss Rules).
Article 11(4) of the 2021 Swiss Rules now dispenses with the two 30-day time periods and simply provides that “the Court shall set a time limit for the Claimant and for the Respondent (or group of parties) to each designate an arbitrator.” It, thus, now remains in the Court’s discretion to determine what is a reasonable time limit for the parties to designate arbitrators under the specific circumstances of each case.
Independence and Impartiality of Arbitrators
Article 12 of the 2021 Swiss Rules imposes a slightly enhanced duty on arbitrators to disclose to the Secretariat and the parties any circumstances likely to give rise to justifiable doubts as to their impartiality or independence, be it prior to their appointment or confirmation (Article 12(2)) or during the course of the arbitration proceedings (Article 12(3)).
To compare, Article 9(2) of the 2012 Swiss Rules provided that prospective arbitrators had to disclose such circumstances to those who approached them in connection with a possible appointment and, once designated or appointed, to all parties, unless they have already been so informed.
While this change is minor, it does highlight the need for arbitrators to remain impartial and independent during the whole course of an arbitration, as well as keeping the Secretariat informed.
Appointment of New Representatives
A newly-inserted provision in Article 16(4) of the 2021 Swiss Rules now provides that “[p]roof of authority of a representative may be requested at any time. The arbitral tribunal may oppose the appointment of a new representative where this would risk jeopardising the impartiality or independence of the arbitral tribunal.” Such a provision was not found in the 2012 Swiss Rules.
There is, in principle, no need for parties to be represented by lawyers in international arbitration, even though it is prudent that they do so.
In line with common arbitral practice and provisions of other institutional rules, Article 19(2) of the 2021 Swiss Rules now states that “[a]s soon as practicable after receiving the file from the Secretariat, the arbitral tribunal shall hold an initial conference with the parties to discuss the organisation of the arbitration proceedings”. Article 19(4) then provides that the tribunal may also hold further organisational conferences as appropriate throughout the proceedings.
A novel provision in Article 19(6) of the 2021 Swiss Rules also stipulates that at any time during the arbitration proceedings, the parties may decide to resolve their dispute by mediation, and during such period, the arbitration will be stayed unless the parties agree otherwise.
Under the 2021 Swiss Rules, there are various modifications to administrative costs, as well as the minimum and maximum fees of the arbitrators, both of which are calculated based on the amount in dispute. Generally, administrative costs are increased (such costs are charged only where the amount in dispute exceeds CHF 300,000 and capped at CHF 75,000 for disputes above CHF 250 million), yet counterbalanced by slightly reduced fees for arbitrators.
For instance, for a case with a sole arbitrator and an amount in dispute of between CHF 2,000,001 and CHF 10,000,000, the administrative costs under the 2012 Swiss Rules were CHF 4,000 (+ 0.2% of any amount over CHF 2,000,000). Under the 2021 Swiss Rules, fixed costs more than doubled, rising to CHF 10,000, but, at the same time, the percentage was also lowered to 0.125% of any amount over CHF 2,000,000.
For the same amount in dispute (CHF 2,000,001 to CHF 10,000,000), a sole arbitrator’s fees, under the 2012 Swiss Rules, would range from a minimum of CHF 30,000 (+ 0.38% of any amount over CHF 2,000,000) and a maximum of CHF 120,000 (+ 1.5% of any amount over CHF 2,000,000), whereas, under the 2021 Swiss Rules, they now range from a minimum of CHF 32,800 (+ 0.32% of any amount over CHF 2,000,000) and a maximum of CHF 107,200 (+ 1.14% of any amount over CHF 2,000,000).
Online Cost Calculators
The Swiss Arbitration Centre provides an online cost calculator for cases administered under the 2021 Swiss Rules, which provides an estimate of institutional administrative costs and the arbitrators’ fees (excluding any expenses) that may be charged for an arbitration based on the amount in dispute, the number of arbitrators (one or three) and the desired currency (USD, EUR or CHF).
An online cost calculator for cases administered under the 2012 Swiss Rules is also, at the time of writing, still available on the website of the Swiss Arbitration Centre.
The Swiss Arbitration Centre may also be designated as an appointing authority, upon a request submitted to its Secretariat, not only for disputes administered under the 2021 Swiss Rules and the Swiss Rules of Mediation, but also for UNCITRAL, ad hoc or any other arbitration or mediation proceedings.
Since 2021, the Swiss Arbitration Centre is also acting as a repository of published information under the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration.
While the 2021 Swiss Rules do not introduce radical changes, they do contain welcome additions geared towards enhancing the efficiency of arbitral proceedings, for instance, with respect to multi-party and multi-contract arbitrations, as well as aligning with recent arbitral practice, such as the holding of virtual hearings and paperless submissions.