Search for:

Arbitration Yearbook Switzerland

By: Joachim Frick,1Joachim Frick is a partner in Baker & McKenzie’s Zurich office. He regularly represents clients in arbitration proceedings as party counsel. He has written various publications on Swiss and international commercial arbitration proceedings and teaches arbitration as an honorary professor at the University of Zurich. Anne-Catherine Hahn,2Anne-Catherine Hahn is a partner in Baker & McKenzie’s Zurich office. She practises mainly in the area of international commercial arbitration and litigation and also acts as a lecturer at the University of Fribourg. Luca Beffa,3Luca Beffa is a counsel in Baker & McKenzie’s Geneva office. His practice focuses primarily on international arbitration and litigation, as well as sports law. He regularly acts in arbitration proceedings, both as counsel and arbitrator. Urs Zenhäusern4Urs Zenhäusern is a partner in Baker & McKenzie’s Zurich office. He regularly represents clients in arbitration proceedings and also acts as an arbitrator.

A. Legislation, Trends and Tendencies

A.1 Legislation

International arbitration in Switzerland is governed by Chapter 12 of the Private International Law Act 1987, to which no amendment was made in 2015.

A.2 Trends and Tendencies

Since its establishment in 2004, the Swiss Chambers’ Arbitration Institution and the Arbitration Court have handled 836 arbitration cases. Under the Swiss Rules of International Arbitration, a party can challenge an arbitrator if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence. The Swiss Chambers’ Arbitration Institution has recently published statistics for the time period from 2004 to 2014, showing that only 14 challenges have been filed during the first 10 years. Of these 14 challenges, 12 were dismissed, one declared inadmissible, and only one challenge was upheld. The successful challenge concerned a case where the respondent had nominated a co-arbitrator who was a partner in a law firm whose webpage mentioned the respondent’s group and the family owning that group is among the high-profile clients of the law firm.

The use of arbitration to resolve disputes in the financial services sector is widely perceived as lower than it could be. To address this issue, the London Arbitration Club, of which the Swiss Chambers’ Arbitration Institution is a member, issued in April 2015 the Financial Services Expedited Arbitration Procedure, with a view to expediting the resolution of any arbitration between parties. The procedure is substantially inspired by the Expediting Procedure under Article 42 of the Swiss Rules of International Arbitration, which provide an existing procedure framework which the parties may opt into. Also, the Financial Services Expedited Arbitration Procedure drafted by the London Club suggests the amendment of the standard arbitration clause of any arbitration institution by additional provisions aiming for shorter time periods for submitting the Answer to the Notice of Arbitration, for scheduling the hearing or for rendering the award. Likewise, it is proposed to include a waiver of discovery or disclosure as well as a limitation on the size of pleadings, witness statements and expert reports. In addition, the arbitral tribunal may, if so allowed by the parties, state the reasons upon which the award is based in summary form only.

B. Cases

In 2015, the Swiss Federal Supreme Court rendered about 30 decisions in international arbitration matters. The following is a quick overview of the most interesting cases.

B.1 Time Limit to Challenge an Award or Answer a Challenge

In a decision dated 20 February 2015,5Decision No. 4A_609/2014. the Swiss Supreme Court provided important clarifications concerning the calculation of time limits for challenging an award (or to answer a challenge).

On 27 September 2010, an Italian company (A) entered into a sponsorship contract with a Spanish company (B) that was managing a cycling team (C). The contract contained the following arbitration clause: “All disputes arising out of or in connection with the present contract shall be decided in a final manner by an arbitral tribunal to the exclusion of ordinary courts, in accordance with the rules of UCI (i.e., the Union Cycliste Internationale) and Italian law.”

The disputes that arose out of this contract gave rise to two ad hoc arbitrations: the first initiated by B and terminated with a final award rendered on 25 July 2011; and the second initiated by A and terminated with a final award dated 23 September 2014. The decision at hand concerns the second arbitration.

The final award was sent to the parties on 23 September 2014, both by email and by registered letter. In the email, the president of the arbitral tribunal wrote: “Please find attached an anticipated copy of the Arbitral Tribunal’s letter of today with its enclosure (the Final award).” In the registered letter, he noted “Registered letter anticipated by email” above the addresses of the respective counsel and “Please find attached to the present the original copy of the Final award” in the text of the letter.

A moved to set aside the award before the Supreme Court on 24 October 2014. B objected, among other reasons, on the basis that the challenge was belated, since it should have been filed within 30 days from the notification of the Final award by email (i.e., by 23 October 2014) rather than within 30 days from the receipt of the original copy of the Final award by registered letter.

The Supreme Court upheld B’s objection. It recalled that the manner in which an award must be notified depends on the agreement or the rules chosen by the parties, in this case the rules of the UCI, which provide that the original of the award must be signed by the president of the panel and deposited with the Secretariat of the UCI, with the parties receiving a copy of the decision. In other words, contrary to other rules such as the rules of the Court of Arbitration for Sport (CAS) or the WIPO Rules, the rules of the UCI do not require that an original of the award duly signed by the arbitrators be notified to the parties.

The Supreme Court further observed that electronic communications were regularly used between the arbitral tribunal and the parties during the arbitral proceedings. Therefore, the Supreme Court considered that the 30-day deadline to challenge the award started to run when the parties received a copy of the Final award by email, and that, thus, the challenge filed by A was inadmissible.

B.2 Arbitral Tribunals’ Secretaries and External Consultants

In a decision dated 21 May 2015,6Decision No. 4A_709/2014. the Swiss Supreme Court had to deal with a very hot and debated issue nowadays: the appointment and role of arbitral tribunals’ secretaries and external consultants.

The dispute concerned a CHF5 million work contract between a Luxembourg company (B – the principal) and a Swiss company (A – the contractor) for the refurbishment of a building. The contract contained an ad hoc arbitration clause stipulating that disputes would be heard by a sole arbitrator, namely the architect of the project (D), who had previously been hired by B to work on the building, and who should decide ex aequo et bono.

B immediately terminated the work contract and submitted a request for arbitration to D. A challenged D in the arbitration proceedings and before the juge d’appui in Geneva for lack of independence and impartiality, but both challenges were dismissed. Eventually, D rendered an award ordering A to pay CHF2.5 million plus interest and arbitration costs.

A moved to set aside the award before the Supreme Court arguing, among other things, that the arbitral tribunal had been irregularly constituted. A contended that the award had actually been rendered by two arbitrators, D and a Geneva lawyer (E), helped by a secretary (F), whereas the arbitration clause provided for one arbitrator (D) and did not foresee the possibility of nominating a secretary. A alleged in particular that the hearing had been entirely conducted by E.

The Supreme Court confirmed, first of all, that the mission of the arbitrator is eminently personal, the contract with an arbitrator being concluded intuitu personae. This means that the arbitrator cannot delegate his or her mission to a third person, even a colleague working in the same firm. The Supreme Court also held, however, that this prohibition on delegation does not automatically exclude the right of an arbitrator to seek assistance from a third party, such as a secretary or an external consultant, provided that the parties have not agreed to the contrary.

The Supreme Court went on to explain that the tasks of a secretary are comparable to those of a clerk (greffier) in state court proceedings: to organize briefs and hearings, draft the minutes of the hearing, and manage accounts for fees and costs. The secretary can also be involved in the drafting of the award, but only under the instruction and supervision of the arbitral tribunal. He or she can therefore sit in on hearings and deliberations, but cannot be entrusted with judicial powers.

The Supreme Court further confirmed that the same limitations apply to external consultants, who can help the arbitrator deal with specific questions for which he or she does not have the necessary expertise, but always under the instruction and supervision of the arbitral tribunal, and without decision-making powers. The Supreme Court also held in this respect that nothing prevents an arbitrator who lacks the necessary knowledge in legal or arbitration matters from seeking assistance from a legal or arbitration specialist, provided that the above requirements are met.

Applying these principles to the case at hand, the Supreme Court considered that the record did not show that E and F had done more than assist D in dealing with the procedural issues at stake from an administrative and legal point of view. In particular, there was no evidence in support of A’s allegation that the hearing had been entirely conducted by E, nor that D had not decided alone, as sole arbitrator.

B.3 Res Judicata

In a decision dated 29 May 2015,7Decision 4A_633/2014. the Swiss Supreme Court had to deal with the res judicata effects in Switzerland of a foreign arbitral award.

The dispute concerned a Business Combination Agreement between a US firm (A) and a German lawyer (B), pursuant to which the German firm (C) founded by B was to be integrated into A. The Agreement was governed by German law and provided for ICC arbitration in Zurich. It stipulated that A should pay to B an annual “Floor Amount” calculated according to certain conditions set forth in Articles 5.2 and 5.3 of the Agreement.

Differences in the interpretation of those provisions arose between the parties. Eventually, B initiated a first arbitration against A, claiming the difference between the Floor Amount of EUR2 million for the years 2009 and 2010 and the amounts actually paid by A for those two years. The arbitral tribunal, with its seat in Frankfurt as agreed by the parties (the “Frankfurt tribunal”), dismissed B’s claims, holding that the Floor Amount was due only if the partner in question had fulfilled the “prerequisites for activities, devotion and performance” set forth in Article 5.3 of the Agreement. The Frankfurt tribunal held that these prerequisites had not been met by B.

Two years later, B initiated a second arbitration against A, claiming the difference between the Floor Amount calculated according to Articles 5.2 and 5.3 of the Agreement for the years 2011 and 2012 and the amounts actually paid by A for those two years. The arbitral tribunal, with its seat in Zurich (the “Zurich tribunal”), first dismissed the objection of res judicata raised by A in two successive procedural orders (“PO 3” and “PO 5”), holding that it was not bound by the reasoning adopted by the Frankfurt tribunal and could interpret Article 5.3 of the Agreement according to its own understanding. It then held that Article 5.3 should be interpreted by adopting a holistic approach, that is, by considering all the criteria mentioned in it, and not only, nor primarily, the criteria of “billable and total hours” and the “turnover from billable hours,” as the Frankfurt tribunal had done. Adopting such an approach, the Zurich tribunal held that, although he had not met those two criteria, B had met all the other criteria and was therefore entitled, in principle, to the contractual Floor Amounts for the years 2011 and 2012, save for a reduction justified under German law by B’s contributory negligence.

A moved to set aside the award before the Supreme Court, arguing a violation of the principle of res judicata and, thus, of procedural public policy. A admitted that the Zurich tribunal could decide upon B’s claims because these concerned the years 2011 and 2012, whereas the Frankfurt arbitration had involved the years 2009 and 2010. A nevertheless contended that the Zurich tribunal was bound by the factual and legal conclusions drawn by the Frankfurt tribunal, and in particular by the latter’s conclusion that the Floor Amount was only due if the criteria of, notably, “billable hours” and “turnover from billable hours” set forth in Article 5.3 of the Agreement had been met in the relevant year.

In support of its position, A principally argued that a transnational concept rather than a purely domestic concept of res judicata should be applied in international arbitrations. As a consequence, the res judicata effect of a foreign award would not necessarily correspond to that of a judgment rendered by a Swiss court. Indeed, according to A, applying a transnational concept of res judicata should lead an arbitral tribunal to recognize the binding character not only of the operative part of a previous decision, but also of the considerations leading a tribunal to come to such a decision, as recommended by the ILA in its Final Report on Res Judicata and Arbitration, published in 2006.8The Report is available at: http://www.ila-hq.org/en/committees/index.cfm/cid/19.

The Supreme Court started by confirming its case law on the res judicata principle, reaffirming in particular that, unless an international treaty states otherwise, the law of the forum determines whether the claim raised before a foreign state court or arbitral tribunal and the claim submitted to a Swiss court or arbitral tribunal are identical. Therefore, the principles established by the case law of the Supreme Court in this respect are applicable. The Supreme Court found that A had disregarded those principles in its reasoning. It first held that, as already confirmed in previous decisions, the res judicata scope of an arbitral award rendered in Switzerland is the same as that of a Swiss court decision: it is limited to the operative part of the award and does not extend to the reasoning. According to the Supreme Court, the same principle applies also to foreign awards and judgments, which possess the same authority they would have if rendered by a Swiss court or arbitral tribunal.

The Supreme Court further held that there is no legal basis justifying that a different, more international concept of res judicata be applied in Switzerland. It stressed in particular that the recommendations of a private association such as the ILA cannot be considered legally binding.

The Supreme Court also recalled that, in any event, a foreign decision cannot produce greater effects in Switzerland than it has pursuant to the legal order from which it originates. The Supreme Court found that A had not argued that the res judicata effects of the award rendered by the Frankfurt tribunal would extend to its reasoning pursuant to German law.

The Supreme Court finally held that the Zurich tribunal had not violated the principle of res judicata as interpreted in Switzerland. After admitting that the meaning of the operative part of a decision must be interpreted in light of its overall reasoning, the Supreme Court held that the Zurich tribunal had examined the findings of the Frankfurt tribunal before holding that it was not bound by them. The Supreme Court upheld the reasoning of the Zurich tribunal that the two claims were not identical, since they concerned different years, and considered that the interpretation by the Frankfurt tribunal of Article 5.3 of the Agreement was part of a mere subsumption exercise (Glieder des Subsumtionschlusses) which did not enjoy res judicata effects.

The Supreme Court therefore concluded that the Zurich tribunal could review the claims raised by B from scratch, without being bound by the factual and/or legal conclusions drawn by the Frankfurt tribunal. It also held that the Zurich tribunal would actually have violated procedural public policy if it had considered itself bound by the reasoning of the Frankfurt tribunal and had failed to carry out its own interpretation of the Agreement.

B.4 Distinction Between Invalid and Pathological Arbitration Clauses

In a decision dated 3 June 2015,9Decision 4A_676/2014. the Swiss Supreme Court clarified its jurisprudence concerning the distinction between invalid and pathological (but valid) arbitration clauses.

Under an investment agreement, a Dutch foundation (A) granted US$10 million to a US company (B) against the promise by the third party to the agreement (D) to repay this amount plus US$100 million. A did not receive the promised payments.

After obtaining a default judgment from the ordinary courts of California ordering B, D and the CEO of B (C) to pay to A a total of approximately US$44 million, A entered into a Settlement Agreement and Release (the “Agreement”) with B and C pursuant to which, among other things, B and C undertook to pay to A US$65 million. The Agreement contained the following clause: “This agreement shall be interpreted in accordance with and governed in all respects by the provisions and statutes of the ICC in Zürich, Switzerland and subsidiary by the laws of Germany.”

B and C failed to comply with their undertaking; therefore, A initiated arbitration proceedings before the Swiss Chambers Arbitration Institution. B and C did not participate in the proceedings. Eventually, however, the arbitral tribunal dismissed A’s claims for lack of jurisdiction.

After confirming that, when the respondent does not participate in the proceedings, the arbitral tribunal has to examine its jurisdiction ex officio, the arbitral tribunal moved on to examine whether the above clause could be considered as a valid arbitration clause. It found that, although formally valid, the clause did not contain the essential elements of an arbitration agreement. In particular, the clause did not establish, either subjectively or objectively on the basis of its wording, a common intent of the parties to have their dispute settled by arbitration instead of ordinary litigation. According to the arbitral tribunal, the clause seemed to determine the applicable law rather than the jurisdiction of the relevant arbitral or ordinary tribunal.

Upon challenge by A for lack of jurisdiction, the Supreme Court recalled its long-standing case law pursuant to which an arbitration agreement is valid as to its substance if it expresses the intention of the parties to have an arbitral tribunal decide certain disputes rather than a state court, and if the arbitral tribunal is either determined or at least determinable. The Supreme Court also confirmed that pathological arbitration clauses that contain incomplete, unclear or contradictory provisions are not necessarily invalid to the extent that they do not concern mandatory elements of the arbitration agreement, namely the binding submission of the dispute to a private arbitral tribunal.

Applying the above principles to the case at hand, the Supreme Court upheld the objective interpretation of the relevant clause of the agreement made by the arbitral tribunal. While admitting that the fact that the clause did not contain words such as “arbitration,” “arbitral tribunal,” “arbitrator” or “arbitration clause” is not decisive in order to determine the objective meaning of the intent expressed by the parties, the Supreme Court nevertheless held that the clause at hand should be considered a choice of law clause rather than a jurisdiction or arbitration clause. The Supreme Court based its conclusion on the absence of any reference, even indirect, to a dispute to be solved, on the fact that the clause simply dealt with the law applicable to the interpretation of the agreement, and on the fact that, by using the word “subsidiary,” the clause established a link between the ICC in Zürich, Switzerland and the laws of Germany.

The Supreme Court also considered that the mere reference to the ICC in Zürich, Switzerland was not sufficient to hold in favor of an arbitration clause, since it was not established that the parties knew that this institution offered arbitration services. That the parties, all foreign, could have erroneously thought that the rules of the Chamber of Commerce of Zurich qualified as substantive law when agreeing on the specific clause was also not considered as relevant by the Supreme Court.

The Supreme Court concluded that the contractual clause was not only pathological insofar as it did not designate with sufficient precision the arbitral institution that had to appoint the arbitral tribunal, but did not qualify as an arbitration agreement at all, as it did not express with sufficient clarity the objective intent of the parties to waive state jurisdiction in favor of arbitration. That the real meaning of the clause remained relatively vague did not change anything, according to the Supreme Court.

C. Costs in International Arbitration

C.1 Allocation of Costs

Swiss arbitral tribunals normally include in the final award a decision on the costs incurred and how they are to be borne by the parties. While the Swiss law governing international arbitrations (Chapter 12 of the Private International Law Act or PIL) does not expressively foresee this, this reflects the Swiss Rules on International Arbitration and the Swiss practice in general.

If there is an agreement between the parties on the allocation of procedural costs, be it in the arbitration clause, in the chosen institutional rules or in a separate document, this is binding on the arbitrators. There may be also an implicit agreement, in particular, between parties who each ask the arbitral tribunal to impose costs (and/or party compensation) on the other party. If there is no agreement, either explicitly nor by reference to a set of arbitration rules or implicitly, the arbitral tribunal in an ad hoc proceeding does not have the power to impose compensation of procedural costs ex officio, at least according to the majority view in legal doctrine.

The PIL does not determine whether or how a party has to compensate the other for its party expenses. An award on expenses will generally flow with the result of the arbitration; the successful party being entitled to an order for costs against the unsuccessful party. Again, the agreement of the parties is key, which can be concluded by referring to applicable institutional rules. As in the case of procedural costs, if all parties requested compensation of party fees, this can be seen as implicit agreement. In the absence of an express direct or indirect or implicit agreement, the arbitral tribunal cannot, ex officio, order one party to compensate the expenses of the other party.

According to Article 38(e) of the Swiss Rules, the arbitral tribunal must decide on the compensation of legal expenses, to the extent that the arbitral tribunal considers them to be appropriate, and provided that compensation seems to be appropriate in the specific case (Article 40(2) of the Swiss Rules). Before rendering an award, the arbitral tribunal must submit a draft to the secretariat of the court for approval or adjustment by the court of the determination on costs (but not on the costs of legal representation). Any such approval or adjustment is binding upon the arbitral tribunal.

According to the practice of the Swiss Supreme Court (BGE 136 III 597, BGer 4A_254 2013), the decision of an international arbitral tribunal on arbitrator’s fees is only a payment request by the arbitrators to the party and, if disputed, is subject to proceedings in the court of first instance. On the other hand, a decision of the arbitral tribunal on how the parties have to bear and compensate costs is subject to an appeal to the Swiss Supreme Court under the general grounds for appeal, as listed in Article 190(2)(a)-(e) PIL. In particular, it can be appealed for lack of competence of the arbitral tribunal to rule on costs or party compensation, breach of ultra petita rules (for instance, if in an ad hoc proceeding and without a respective request by the parties, compensation of costs had been ordered), or due to a violation of public policy (ordre public).

C.2 Security for Costs

The parties can, expressly or by referring to relevant arbitral rules, agree that the arbitral tribunal is entitled to request security for costs. Even in the absence of agreement, this can be based on the arbitral tribunal’s right to order provisional measures (Article 183(1) PIL). However, a party requesting this from the other party has to establish that its (future) right to get compensation of its legal fees is in danger if no security for costs is rendered. Reasons can include the insolvency of a party, the fact that the party is a special purpose vehicle, that it has disposed of substantial parts of its assets, or that it has moved its domicile into a state where an enforcement of an arbitral award will be very difficult and there is no other reason for such a move. As for the consequences of nonpayment, please see below concerning advances on costs.

C.3 Recovery of Costs

The PIL does not specify what is part of the procedural costs. The agreement between the parties is key, often via the selection of the applicable institutional rules. In the absence of agreement, the arbitral tribunal will consider the following amounts to be relevant: the fees of the arbitrators, expenses of the arbitrators (travel costs, infrastructure costs, costs for translation services, court reporters, etc.), and costs of witnesses, experts and other evidence proceedings. Internal costs of in-house legal departments, loss of management time, loss of productivity and similar costs are, in the absence of an agreement to this effect, not compensated.

Under Article 38 of the Swiss Rules, the arbitral award must contain a determination of the costs of the arbitration. The term “costs” includes only the fees of the arbitral tribunal, to be stated separately for each arbitrator and any secretary; the travel and other expenses incurred by the arbitral tribunal and any secretary; the costs of expert advice; the travel and other expenses of witnesses; the costs for legal representation to the extent that the arbitral tribunal determines that the amount of such costs is reasonable; the registration fee; and the administrative costs. The registration fee has to be paid when submitting a notice of arbitration and amounts to CHF4,500 – CHF8,000, depending on the value in dispute. For the expedited procedure, a provisional deposit of CHF5,000 is requested by the court from the claimant. A party applying for emergency relief has to pay a nonrefundable registration fee of CHF4,500 and a deposit as an advance for the costs of the emergency relief proceedings of CHF20,000 together with the application. If they are not paid, the court will not proceed with the emergency relief proceedings.

The Swiss Rules provide in an appendix a relatively broad scale of arbitrators’ fees, both for sole arbitrators and tribunals of three arbitrators. The fees of an arbitral tribunal consisting of more than one arbitrator correspond to those of a sole arbitrator plus 75 percent for each additional arbitrator. As an example, for an amount in dispute of CHF10 million, the administrative costs will amount to CHF20,000 and the sole arbitrators’ fee to between CHF60,400 and CHF240,000. In the case of a three-member tribunal, the administrative costs are CHF20,000 and the arbitrator fees from CHF151,000 to CHF600,000.

As a rule, the presiding arbitrator receives between 40 percent and 50 percent and each co-arbitrator between 25 percent and 30 percent of the total fees, in view of the time and effort spent by each arbitrator. The fees and expenses of the arbitral tribunal have to be in a reasonable amount, taking into account the amount in dispute, the complexity of the subject matter, the time spent and any other relevant circumstances.

Under the Swiss Rules, the expenses of the arbitral tribunal cover reasonable disbursements such as expenses for travel, accommodation, meals and any other costs. The court has issued general guidelines for the accounting of such expenses (see www.swissarbitration.org). Travel expenses, rental of hearing rooms and equipment, expenses for an interpreter and/or court reporter, courier fees and expenses of any expert appointed by the tribunal are to be reimbursed against receipts. General office expenses and overheads are not to be claimed. Each arbitrator or secretary is entitled to a flat rate daily allowance to cover all personal living expenses for each day spent outside his or her usual place of business (CHF300 per day or, if hotel accommodation is needed, CHF800 per day). All other costs are at the arbitral tribunal’s own expense. Please see also the summary in Baker & McKenzie International Arbitration Yearbook 2014/2015, pages 371 and 372.

The arbitral tribunal usually requests the parties to advance the fees and the expenses of its members, including costs for experts and other expenses. This is based on a relevant agreement, including a choice of arbitral rules containing a provision to this effect, or on statutory law (Article 182(2) PIL, which entitles the arbitrators to decide on procedural issues). The arbitral tribunal has no obligation, however, to request advances in the absence of an agreement to that effect.

Usually, and if the Swiss Rules are applicable, the parties bear equal shares of the advances for fees and expenses of the arbitral tribunal and other expenses for the proceedings (see Article 41(2) of the Swiss Rules). However, the arbitral tribunal can, in specific cases, deviate from this principle at its discretion (see Article 41(2) of the Swiss Rules), for instance if the respondent has filed a counterclaim or declared the set-off of claims, which requires substantial additional work.

If the advances are not paid, it is again for an agreement between the parties or the applicable institutional rules to determine the consequences. If the applicable institutional rules do not state this, the arbitral tribunal must clearly announce to the parties if it intends to impose a prescription of rights if cost advances are not paid on time. Accordingly, in contrast to a state court, an arbitral tribunal is not entitled to render a decision on the merits at the expense of one party simply due to the fact that it did not, in a timely manner, pay the advances for fees or expenses of arbitrators. This would contradict the right to be heard, in particular as there is no right to free legal assistance in arbitral proceedings.

Under the Swiss Rules, the arbitral tribunal must request each party to deposit an equal amount as an advance for the costs of the proceedings (not including the costs of legal representation) (Article 41(1)). If the required deposits are not paid in full within 15 days after the receipt of the request, the arbitral tribunal will notify the parties in order that one or more of them may make the required payment. If such payment is not made, the arbitral tribunal may order the suspension or termination of the arbitral proceedings (Article 41(4)).

  • 1
    Joachim Frick is a partner in Baker & McKenzie’s Zurich office. He regularly represents clients in arbitration proceedings as party counsel. He has written various publications on Swiss and international commercial arbitration proceedings and teaches arbitration as an honorary professor at the University of Zurich.
  • 2
    Anne-Catherine Hahn is a partner in Baker & McKenzie’s Zurich office. She practises mainly in the area of international commercial arbitration and litigation and also acts as a lecturer at the University of Fribourg.
  • 3
    Luca Beffa is a counsel in Baker & McKenzie’s Geneva office. His practice focuses primarily on international arbitration and litigation, as well as sports law. He regularly acts in arbitration proceedings, both as counsel and arbitrator.
  • 4
    Urs Zenhäusern is a partner in Baker & McKenzie’s Zurich office. He regularly represents clients in arbitration proceedings and also acts as an arbitrator.
  • 5
    Decision No. 4A_609/2014.
  • 6
    Decision No. 4A_709/2014.
  • 7
    Decision 4A_633/2014.
  • 8
  • 9
    Decision 4A_676/2014.