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How to Work with the Swiss Rules:
The Counsel's Perspective
by Gabrielle Nater-Bass*
Table of Contents
I.
Institutional arbitration is the preferred choice but competition is high ........2
II.
What matters for counsel ..................................................................................2
A. Enforceability of the award ............................................................................3
B. Professionalism and wide acceptance of the arbitration institute ...................3
C. Flexibility of the arbitration procedure ............................................................4
III.
The key selling point of the Swiss Rules: Efficiency .......................................6
A. Arbitration cases conducted under the Swiss Rules are in general fast .........6
1.
2.
Average length of arbitration proceedings ........................................................... 6
Why Swiss Rules arbitration tends to be faster ................................................... 7
a) "Lighter" Administration ................................................................................ 7
b) Availability of an expedited procedure ......................................................... 9
c) The typical parties' origin and their influence on discovery
proceedings .................................................................................................. 9
B. Possibility of consolidation and participation | joinder of third parties ...........10
C. Set-off possibility .........................................................................................11
IV.
The Swiss Rules: Arbitration counsel's ideal playing field ...........................12
*
Gabrielle Nater-Bass is a partner of Homburger, Zurich. Her practice focuses on international
commercial arbitration and litigation. She wishes to thank Melissa Magliana and René Leuenberger
of Homburger for their valuable assistance and contribution.
2 | 13
I.
Institutional arbitration is the preferred choice but competition
is high
The latest PricewaterhouseCoopers study on international arbitration 2008 has
once again confirmed that international arbitration is the preferred dispute resolution mechanism of corporations for cross-border disputes and that corporations
prefer institutional arbitration to ad-hoc arbitration.1
Competition among the various arbitration institutes is extremely high. The PwC
Study 2008 showed that among the most popular arbitration institutes were the
American Arbitration Association|International Centre for Dispute Resolution
(AAA-ICDR), the International Chamber of Commerce (ICC) and the London
Court of International Arbitration (LCIA). In line with the previous PwC Study
20062, participants reported an increased preference for regional arbitration institutions. Swiss corporations, however, still reported that they submit more disputes to the ICC or AAA-ICDR than to the Swiss Chambers' Court of Arbitration
and Mediation (Swiss Chambers).3
This article concentrates on the question of why counsel should prefer that their
clients be part of an international commercial arbitration governed by the Swiss
Rules. At the very end, counsel must represent the user's perspective. In fact,
unless clients are convinced that arbitration is the preferred dispute resolution
mechanism, we as arbitration counsel have no future. Thus, what matters for the
user should matter for its counsel.
II.
What matters for counsel
There are certain criteria that in any event must be guaranteed by the rules of an
arbitration institution in order for it to participate in the competition for the preferred arbitration institution.
1
2
3
PriceWaterhouseCoopers LLP and Queen Mary, University of London (eds.), International
Arbitration: Corporate attitudes and practices 2008 ("PwC Study 2008") p. 15. This study can be
downloaded from: http://www.pwc.co.uk/eng/publications/international_arbitration_2008.html. The
PwC Study 2008 showed that 86% of awards that were rendered over the last ten years were under the rules of an arbitration institution, while 14% were under ad hoc arbitrations.
PriceWaterhouseCoopers LLP and Queen Mary, University of London (eds.), International
Arbitration: Corporate attitudes and practices 2006 ("PwC Study 2006").
PwC Study 2008, p. 15.
3 | 13
A.
Enforceability of the award
Institutional arbitration rules, without a doubt, must ensure that the arbitration
proceedings are conducted in a manner such that recognition and enforcement
in particular under the New York Convention on the Recognition and Enforcement of Arbitral Awards does not cause a problem in general. As such they must
provide certain guarantees that the dispute will be submitted to competent independent arbitrators who respect the parties' right to due process (i.e. their right to
be heard and their right to equal treatment).
The Swiss Rules meet these requirements: Article 9 para. 1 Swiss Rules provides that the arbitrators have to "remain at all times impartial and independent"
and Article 15 para. 1 Swiss Rules requests the arbitral tribunal to treat the parties equally and to respect their right to be heard. But it is fair to state that what
the Swiss Rules provide for in this respect is not more than what other major institutional arbitration rules do, such as the ICC Rules and LCIA Rules.
B.
Professionalism and wide acceptance of the arbitration institute
Counsel further want an institution that has a strong reputation for managing arbitration proceedings4, meaning that the arbitration institution is known for its
professionalism and is widely accepted.
It would be hard to argue – and even harder to prove – that an arbitration under
the Swiss Rules is handled in a more professional manner than an arbitration
administered by its competitors, or that the Swiss Rules are internationally more
accepted than the rules of other arbitration institutions. Nonetheless, when acting
as counsel in Swiss Rules arbitrations, I have been consistently impressed with
the level of professionalism and efficiency with which the arbitrations were managed. Letters were answered and arbitrators confirmed within days, even when
complex or unusual questions were on the table. Without doubt this is the
achievement of the legal secretaries of the six Swiss Chambers of Commerce
and Industry (the Swiss Chambers). But in my view this success is also furthered
by the two other groups of the Arbitration Committee: the Special Committee and
the "Rapporteurs" (of which I am proudly a member since 2007). While the Special Committee decides or is consulted regarding specific questions allocated to
them under the Swiss Rules5, the "Rapporteurs" assist the Swiss Chambers in
4
5
PwC Study 2006, p. 12. Reputation being the most widely recognised reason for choosing
institutional arbitration as per the PwC Study 2006.
Such as decisions under Articles 11 and 16 of the Swiss Rules on the challenge and revocation of
arbitrators.
4 | 13
the administration and monitoring of the arbitral proceedings in general and this
in an informal and expedient way.
Further, counsel's life is much easier and acceptance of the arbitration
rules|institution enhanced if there is a good and reliable commentary available as
it is the case with the Swiss Rules.6
C.
Flexibility of the arbitration procedure
Flexibility of the arbitration procedure is another top criterion for counsel.7 Here
the Swiss Rules offer a great deal. The Swiss Chambers do not impose any list
or panel of arbitrators on the parties. They give priority to the choice of the parties, which are free not only to designate their arbitrator(s) – provided of course
that the Chambers confirm such choice8 – but also to select the applicable law,
the language and obviously, their legal counsel, from Switzerland or elsewhere.9
Since August 1, 2004, parties are also free to choose the seat of the arbitration
outside of Switzerland.10 But even where the Swiss Rules do not expressly reserve the parties' agreement, the parties (with very few exceptions related to
fundamental features of the Swiss Rules) are free to derogate from the provisions of the Swiss Rules.11 This makes it very easy for counsel to work with the
Swiss Rules. In fact, in my personal career as counsel, I have never come
across a situation in which the Swiss Rules placed any limits on specific requests
of the parties related to the conduct of the arbitration proceedings.
Since September 2007, the Swiss Rules are also available for domestic arbitrations. Originally, the Swiss Chambers administered only international arbitrations.
For domestic arbitrations the parties were previously referred to the former rules
of the Swiss Chambers, as some provisions of the Swiss Rules conflict with the
Swiss Intercantonal Convention on Arbitration of March 27, 1969 (the Concordat)
which governs domestic arbitrations.
However, since the enactment of the Swiss Rules, practitioners and users, in
particular multinational companies, have repeatedly requested that the Swiss
Rules be made available for domestic arbitrations as well. Although disputes by
6
7
8
9
10
11
Cf. ZUBERBÜHLER|MÜLLER|HABEGGER (eds.), Swiss Rules of International Arbitration, Commentary,
Zurich 2005 (hereinafter "Commentary Swiss Rules of International Arbitration").
PwC Study 2006, p. 6.
Article 5 para. 1 Swiss Rules.
Articles 33 para. 1, 17 para. 1 respectively 3 para. 13 Swiss Rules.
Art. 1 para. 2 Swiss Rules.
For more details see BESSON, in: Commentary Swiss Rules of International Arbitration, Introduction
N 30 to 37.
5 | 13
these multinational companies often do qualify as "international arbitrations" as
defined in Article 176 para. 1 of the Swiss Private International Law Act (the PILA), this may not be the case when the relevant dispute involves only the Swiss
entities of such multinational companies. It is not uncommon for two Swiss entities of multinational companies to enter into an agreement having effect outside
Switzerland and for them to wish for international institutional arbitration rules to
govern their disputes.
The Swiss Chambers, therefore, in September 2007, agreed to administer also
domestic arbitrations under the Swiss Rules where the arbitration clause agreed
between the parties expressly provides for the application of the Swiss Rules (as
opposed to the former rules of the Chamber of Commerce which are in principle
still applicable to domestic arbitrations) and where this express selection is not
reversed by the parties when the arbitration is initiated.12 However, the Swiss
Chambers clarified that in the event of any conflict between the Swiss Rules,
which were designed to govern international, not domestic arbitrations, the mandatory provisions of the Concordat will prevail.13
The danger of such conflicts, however, will likely disappear in the future. With the
upcoming revision of the Swiss Code of Civil Procedure, it is expected that several of the provisions of the Concordat will fall away and, as a result, so will the
differences between domestic and international arbitration in Switzerland.
The possibility of using the Swiss Rules also for domestic arbitration is of course
an additional selling point for the Swiss Rules that counsel can explain to their
clients. But again, with respect to the flexibility criteria, the Swiss Rules will not
be able to gain any significant advantage over other preferred institutional arbitration rules such as the ICC Rules which, like many others, provide the parties
comparable flexibility. This is also valid for the possibility of using these institutional arbitration rules for domestic arbitrations. Although pursuant to Article 1
ICC Rules "[t]he function of the Court is to provide for the settlement by arbitration of business disputes of an international character [N]", the ICC Rules are
also available for single-nationality disputes.14 In fact, according to the ICC, the
number of cases involving parties from the same nationality has been increasing
over the last few years.15
12
13
14
15
ASA Bulletin 4|2007, p. 747.
Swiss Chambers Newsletter 2-2007 of October 10, 2007. This Newsletter can be downloaded from
www.sccam.org/sa/en/news.php; ASA Bulletin 4|2007, p. 747.
ICC, International Court of Arbitration, Bulletin Volume 19 No. 1 2008, p. 8.
ICC, International Court of Arbitration, Bulletin Volume 19 No. 1 2008, p. 8.
6 | 13
The same applies for example for the Arbitration Rules of the German Institution
for Arbitration (DIS Arbitration Rules) and the Arbitration Rules of the Arbitration
Institute of the Stockholm Chamber of Commerce (SCC Arbitration Rules).16 The
LCIA and AAA-ICDR Rules, however, are only available for international arbitration.17
III.
The key selling point of the Swiss Rules: Efficiency
There are, however, areas where the Swiss Rules are competitive and can offer
counsel distinctive advantages: arbitration under the Swiss Rules is in general
fast and the Swiss Rules provide for some innovative provisions that even further
enhance the efficiency of arbitration proceedings.
Efficiency is without a doubt a key criterion in evaluating whether one might want
to work within a specific institutional arbitration framework. Efficiency is not only
defined by the possibility of bringing an arbitration proceeding to completion within a relatively short period of time. Rather, efficiency also requires that institutional arbitration rules provide specific tools, where appropriate, to facilitate complex proceedings such as those involving more than two parties.
A.
Arbitration cases conducted under the Swiss Rules are in general
fast
1.
Average length of arbitration proceedings
It is well known that arbitration proceedings have become more and more complex, increasingly simulating court proceedings, and as a result, tend to last too
long. As such it comes as no surprise that the length of arbitration proceedings
has become one of the major concerns for the users.18
Between the enactment of the Swiss Rules in 2004 and May 2009, 335 cases
were submitted to the Swiss Chambers. Of these, 186 cases have already been
concluded.19 Those conducted under the ordinary procedure terminated within an
average period of around 10 months (i.e. 320 days as per the statistics) and as
such in less than one year. Those conducted under the expedited procedure
were even terminated within an average period of around 8 months (i.e. 240
16
17
18
19
PwC Study 2008, p. 15.
PwC Study 2008, p. 15.
Cf. among others PwC Study 2006, p. 7.
This information was kindly provided by Dr. Rainer Füeg, President of Swiss Chambers' Court of
Arbitration and Mediation, and is based on statistics established by the Swiss Chambers.
7 | 13
days as per the statistics).20 In contrast thereto, the average length of an arbitration of general complexity conducted under the ICC Rules and the AAA-ICDR
Rules is around 16 to 24 months (i.e. 486 to 730 days).21
2.
Why Swiss Rules arbitration tends to be faster
The above numbers clearly indicate that arbitration cases conducted under the
Swiss Rules are in general fast. Among the most obvious potential explanations
are the "lighter" administration, the availability of an expedited arbitration process
and the predominance of parties from Western European civil law jurisdictions.
a)
"Lighter" Administration
The founders of the Swiss Rules have paid particular attention to ensure that
arbitration under the Swiss Rules is not burdened by an overly time consuming
administration. This so-called "lighter" administration has the following special
features:
-
20
21
22
23
Articles 5 - 8 Swiss Rules set up the framework for a rapid constitution of
the arbitral tribunal while providing the parties the autonomy regarding the
establishment and composition of the arbitral tribunal. However, in case the
parties are unable to designate an arbitrator, the competent Chamber is
entitled to appoint the arbitrators in order to prevent a party from delaying
the efficient course of the proceedings.22 Based on my personal experience, such an appointment generally takes place within approximately a
week. In contrast, other institutional rules, e.g. the Arbitration Rules of the
Netherlands Arbitration Institute (NAI Rules) provide for a list-procedure in
the event that the parties are unable to agree on a method of appointing
the arbitrator(s) differently (Article 13 para. 1 NAI Rules). This can be a rather lengthy process, taking at least 28 days.23 Under the ICC Rules, which
Swiss Chambers' Court of Arbitration and Mediation, Newsletter – 1|2009. This newsletter can be
downloaded from: www.sccam.org/sa/download/newsletter_2009_1.pdf.
The above estimates are the outcome of inquiries conducted among various lawyers in Switzerland
and comply for the ICC arbitrations with the result Bühler|Schlabrendorff reached; cf
BÜHLER/SCHLABRENDORFF, 10 Jahre ICC Schiedsordnung 1998. Ein Blick zurück, zwei Blicke nach
vorneN, in: SchiedsVZ, Zeitschrift für Schiedsverfahren 1|2009, p. 34. The PwC Study 2006, p. 7,
states as well, that the ICC and the AAA-ICDR institutions claim that the average length of their
cases is 18 months. Unfortunately, there were no statistics available from the LCIA.
PETER, Some Observations on the New Swiss Rules of International Arbitration, in: Jusletter 12
July 2004 N 19.
According to Article 14 para. 1 NAI Rules, the Administrator first communicates to each party an
identical list of names. The parties then have the possibility to delete the names against whom they
have overriding objections and list the others in order of priority (Article 14 para. 2 NAI Rules). For
this the parties are given 28 days (in domestic arbitration 14 days).
8 | 13
in general also provide for the parties' autonomy to nominate their arbitrators, a nomination by the ICC Court in case of the parties' failure to do so
can also take considerable time as the ICC Court then has to go over the
National Committees of the ICC in order to make proposals (Art. 8.3, 8.4
and 9.3 ICC Rules).
-
Contrary to the ICC Rules (Article 18), the Swiss Rules do not request the
arbitral tribunal to draw up Terms of Reference that have to be signed by
the parties, but only request that the arbitral tribunal, in consultation with
the parties, prepare a provisional timetable at an early stage of the proceeding (Article 15 para. 3 Swiss Rules). Although Article 18 para. 2 of the
ICC Rules requires that the signed Terms of Reference have to be submitted to the ICC Court within two months after the file has been forwarded to
the arbitral tribunal, I can well imagine that I am not the only counsel that
could tell a war story or two about when the Terms of Reference were severely delayed or not signed at all by the parties, requiring the approval
process as described in Article 18 para. 3 ICC Rules. In fact, it is not uncommon for defendants to resist signing the Terms of Reference or even
participating in the arbitration proceedings, e.g. if they dispute jurisdiction of
the arbitral tribunal. In such circumstances, the Terms of Reference are of
course a perfect tool for various dilatory tactics to be played. As a consequence, the arbitration may be considerably delayed, as without signed or
ICC Court approved Terms of Reference, the arbitration may not proceed
(Article 18 para. 3 ICC Rules).
-
Except for the decision on costs, an arbitral tribunal under the Swiss Rules
is not requested to first submit the draft award to the Swiss Chambers for
review and approval prior to sending it to the parties. Other institutional
rules, such as the ICC Rules (Article 27 ICC Rules), provide for mandatory
scrutiny and approval of the award by the institution before the award can
be signed by the arbitral tribunal and submitted to the parties. While this
procedure is aimed at enhancing the quality of the award, it clearly prolongs the arbitration process. As counsel, once the evidentiary hearing is
over and the post hearing briefs have been filed, one is interested in receiving the award as soon as possible. In a Swiss Rules arbitration, the arbitral
tribunal is in a position to let counsel know very precisely when they can
expect the award and can - if time is of essence - act very expeditiously.
This is much less the case where the award must first be submitted to an
institution for approval, as the competent authority does not sit all the time,
but only at regular intervals. In addition, I have not experienced awards
rendered under the Swiss Rules to be of an inferior quality. In a sophisti-
9 | 13
cated arbitration community such as Switzerland, quality control by an institution is not absolutely necessary; I am confident that the community would
react to arbitrators not living up to its quality expectations.
b)
Availability of an expedited procedure
As per Article 42 Swiss Rules, if the parties so agree or in case of disputes involving amounts in dispute of less than CHF 1 million, arbitrations are referred to
an expedited procedure.24 Awards in these cases are supposed to be rendered
within six months from the transmission of the file to the arbitral tribunal. While
this time period cannot always be respected, statistics show that this type of proceeding leads to arbitration proceedings terminating within a respectable time
period of 8 months (i.e. 240 days as per the statistics) on average.25
The expedited procedure possibility is widely used. 30% of the cases submitted
to the Swiss Rules to date have followed expedited procedures.26 It is in fact a
very useful tool that renders arbitration also meaningful for smaller amounts in
dispute (in particular up to CHF 5 million), as the distinctive features of the expedited procedure (e.g. use of a sole arbitrator, exchange of only one round of
substantive briefs) allow this type of arbitration to be conducted at very reasonable costs.
My personal experience as counsel with the expedited procedure under the
Swiss Rules has been very positive: It has led to a high level of client satisfaction, both in terms of speed and cost.
c)
The typical parties' origin and their influence on discovery proceedings
70% of the parties involved in arbitration proceedings under the Swiss Rules
come from Western European countries with a civil law system27, whereas in
24
25
26
27
For details thereto see LA SPADA, in: Commentary Swiss Rules of International Arbitration, Article
42.
Swiss Chambers' Court of Arbitration and Mediation, Newsletter – 1|2009. This newsletter can be
downloaded from: www.sccam.org/sa/download/newsletter_2009_1.pdf.
This information was kindly provided by Dr. Rainer Füeg, President of Swiss Chambers' Court of
Arbitration and Mediation, and is based on statistics established by the Swiss Chambers. In 2008,
24% of the new cases followed expedited procedures; cf. Swiss Chambers' Court of Arbitration and
Mediation, Arbitration Statistics 2008 (www.sccam.org/sa/download/statistics_2008.pdf).
According to information provided by Dr. Rainer Füeg President of the Swiss Chambers' Court of
Arbitration and Mediation, between 2004 and 2008 only 10% of the Western European parties
forming the largest percentage of parties (i.e. 54%) came from the UK. Together with the 21%
Swiss parties, Western European parties with a civil law background account for almost 70%; cf.
also Swiss Chambers' Court of Arbitration and Mediation, Newsletter – 1|2009.
10 | 13
arbitrations conducted under the LCIA Rules28 and the AAA-ICDR Rules29 the
parties are more often from a common law country such as the UK or the US. It
is no secret that arbitration proceedings are shaped by the parties' expectations
which are influenced by their legal and cultural background. As such, parties with
a common law background tend to much more complex discovery proceedings
resulting among others in lengthier evidentiary hearings, without doubt the driving time and cost factor in any arbitration. Besides, the Swiss Rules were not
designed to provide for U.S.- style discovery, so that irrespective of the parties'
origin the arbitral tribunal in exercising its discretion should place limits to unreasonable discovery requests of the parties.30
B.
Possibility of consolidation and participation | joinder of third parties
Article 4 para. 1 Swiss Rules allows for the consolidation of several proceedings.
According to this Article, any new case may be consolidated with an already
pending and related arbitration under the Swiss Rules. Consolidation is even
possible where the parties are not identical to the parties in the already pending
arbitration. Pursuant to this provision, "the Chambers may decide, after consulting with the parties to all proceedings and the Special Committee, that the new
case shall be referred to the arbitral tribunal already constituted for the existing
proceedings." While the Swiss Rules grant the Chambers great discretion when
rendering a decision, the Swiss Rules provide guidelines for such a decision:
"[w]hen rendering their decision, the Chambers shall take into account all circumstances, including the links between the two cases and the progress already
made in the existing proceedings."31
According to Article 4 para. 2 Swiss Rules, joinder|participation of third parties is
also allowed under certain circumstances. Pursuant to this provision, (i) a third
party may request to participate in arbitral proceedings that are already pending,
or (ii) a party to the arbitral proceedings may request to cause a third party to
participate. This time it is the arbitral tribunal, after consulting with all parties and
28
29
30
31
Cf. Director General's Report on Casework, November 2008. This report was downloaded on April
29, 2009 from: www.lcia.org (heading "News"). According to the report, in 2007, 33% of the parties
came from US, UK and British Virgin Islands.
As per statistics provided by Mandy Sawier, Regional Manager - EMEA, ICDR.
NATER-BASS, in: Commentary Swiss Rules of International Arbitration, Article 24 N 12.
For further information on the possibility of consolidation, cf. GILLIÉRON|PITTET, in: Commentary
Swiss Rules of International Arbitration, Article 4 N 1 to N 8.
11 | 13
taking into account all relevant and applicable circumstances, that decides on
such requests.32
While it was precisely these important innovations of the Swiss Rules that provoked some criticism and suspicion at the beginning33, they provide a solution for
a widely recognized concern in the arbitration community, namely the usual lack
of third party mechanism in institutional arbitration rules.34 As such, since the
enactment of the Swiss Rules, counsel have made frequent use of these possibilities and no major problems have been noted by the Swiss Chambers. Besides, these tools applied in a reasonable manner as per the Swiss Rules allow
counsel to handle multi-party arbitration cases and multi-contract arbitration cases in an efficient manner and as such provide them with more flexibility and a
distinctive advantage compared to other institutional rules.35
C.
Set-off possibility
Another possibility for counsel to enhance the efficiency of arbitration proceedings is provided by Article 21 para. 5 Swiss Rules. Pursuant to this provision,
"[t]he arbitral tribunal shall have jurisdiction to hear a set-off defense even when
the relationship out of which this defense is said to arise is not within the scope
of the arbitration clause or is the object of another arbitration agreement or forum-selection clause." While Article 19 para. 3 of the United Nations Commission
on International Trade Law Arbitration Rules, effective as from December 15,
1976 (the UNCITRAL Arbitration Rules) require that a set-off defense arise out of
the same contractual relationship, the Swiss Rules implemented a much more
liberal trend in legal doctrine according to which a set-off defense is admissible
without limitation.36 Accordingly, a cross-claim for the purpose of a set-off defense is admissible under the Swiss Rules irrespective of whether it falls within or
outside the scope of the arbitration agreement and|or results from the same legal
32
33
34
35
36
For further information, cf. GILLIÉRON|PITTET, Commentary Swiss Rules of Arbitration, Article 4 N 9
to N 18.
Winston & Strawn LLP, Swiss Arbitration Update: First Amendments of International Arbitration
Law, p. 4 (downloaded from www.winston.com/siteFiles/publications/SwissArbitrationUpdate.pdf).
Cf. PwC Study 2006, p. 7 identifying that the difficulty of joining third parties to proceedings is a
major concern associated with international arbitration.
Article 4 para. 6 ICC Rules do also provide the possibility to join or consolidate arbitral proceedings, but their scope is very limited, cf. DERAINS|SCHWARTZ, A Guide to the ICC Rules of Arbitration,
nd
2 edition, The Hague 2005, p. 58 – 62. Further, Article 22.1 lit. h LCIA Rules provide for a possibility to join third parties. But again, Article 4 para. 2 Swiss Rules has a much wider scope, as the
LCIA Rules require the consent of the third party as well as the consent of one of the parties to the
arbitration, cf. GILLIÉRON|PITTET, op.cit., Article 4 N 11.
PETER, Some Observations on the New Swiss Rules of International Arbitration, in: KAUFMANNKOHLER|STUCKI (eds.), ASA Special Series No. 22, p. 9; BERGER, in: Commentary Swiss Rules of
International Arbitration, Article 21 N 31 to 33 with further references.
12 | 13
relationship. On the other hand, however, a cross-claim that is merely put forward as an independent offensive counterclaim will not be heard if it falls outside
the scope of the arbitration agreement unless the parties have subsequently provided their approval or if the Respondent to the counterclaim has unconditionally
entered into the merits of the counterclaim and as such is deemed to have
waived any jurisdictional objections.37
Another possibility is that the Respondent initiates a second arbitration proceeding and asks as per Article 4 para. 1 Swiss Rules for a consolidation of the proceeding with the one already pending.38
With this innovative provision, the Swiss Rules create legal certainty and prevent
lengthy discussions regarding jurisdiction over set-off claims.39Allowing all set-off
defenses to be raised is also in the parties' best interest as it avoids the need to
have two separate proceedings and allows them to obtain clarity with regard to
such set-off defenses in a single proceeding.40 For counsel, the set-off provision
of the Swiss Rules, if applied reasonably, allows them to satisfy corresponding
expectations of their parties and to explore all potential defense possibilities in
one proceeding.
IV. The Swiss Rules: Arbitration counsel's ideal playing field
Being based on the UNCITRAL Arbitration Rules, one of the most popular and
widely used sets of rules for international arbitration, and having been fine-tuned
to take into account newer trends and developments, the Swiss Rules are an
ideal playing field for international arbitration counsel. In addition, they are userfriendly and accessible to counsel from all legal backgrounds. As such, counsel
feel comfortable and are satisfied with the Swiss Rules.
The Swiss Rules, as explained above, also take care of some of the major concerns of the users, all of which can be summarized under the key term "efficiency". Enhancing efficiency means saving time. Saving time means saving money
and with that addressing the most frequently cited disadvantages associated with
37
38
39
40
As per Article 21 para. 3 Swiss Rules and Article 186 para. 2 PILS.
BERGER, in: Commentary Swiss Rules of International Arbitration, Article 21 N 34 to N 37;
KELLERHALS|BERGER, Widerklage und Verrechnung nach den Swiss Rules of International Arbitration, in: BOHNET|W ESSNER, Mélanges en l'honneur de François Knoepfler, Basel 2005, p. 218.
KELLERHALS|BERGER, op.cit., p. 217.
ALTENKIRCH|BALLAND|CHO|REINLEIN, DSJV-Jahrestagung 2004: Die neuen Regeln der Internationalen Schiedsordnung der Schweizerischen Handelskammern, in: SchiedsVZ, op.cit., Heft 3|2005, p.
155.
13 | 13
international arbitration.41 As such the Swiss Rules contribute in enhancing client
satisfaction thereby securing the future of arbitration as the preferred dispute
resolution mechanism and the future of the international arbitration counsel.
41
PwC Study 2006, p. 6 and 7.