Switzerland enjoys strong position as a traditional arbitration centre

By Christian Oetiker and Wu Fan, VISCHER
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For more than 100 years, Switzerland has been one of the preferred venues for hosting international arbitrations, rendering it one of the pre-eminent arbitration centres and not only for Europe. Parties from all over the world choose to have their disputes decided by arbitral tribunals with their seat in Switzerland.

吴帆 Wu Fan 菲谢尔律师事务所 中国业务部 顾问 Counsel China Desk VISCHER
吴帆
Wu Fan
菲谢尔律师事务所
中国业务部
顾问
Counsel
China Desk
VISCHER

The first reason for Switzerland being such a well-recognised arbitration centre is its political situation. Switzerland is a politically neutral country, and the political situation has been stable for decades. This is also recognised internationally, illustrated by the fact that Switzerland hosts many international organisations or dispute settlement institutions, including the United Nations, the World Trade Organisation, the World Intellectual Property Organisation, the International Federation of Consulting Engineers, the International Air Transport Association, the Court of Arbitration for Sport, the International Olympic Committee and other major international sports organisations such as FIFA (the Federation Internationale de Football Association) and UEFA (the Union of European Football Associations).

Modern law

Second, as early as 1987, Switzerland enacted a very modern international arbitration law (chapter 12 of the 1987 Federal Private International Law Act). It is one of the forerunners of modern arbitration laws worldwide, and has been an inspiration for many jurisdictions. Although the act has been around for almost 30 years now, it is still a modern piece of legislation and an excellent basis for arbitral proceedings. Clear and concise with only 18 articles, the act supports an arbitration-friendly and efficient regime that highlights Switzerland’s strong support for international arbitration.

Christian Oetiker 菲谢尔律师事务所 诉讼业务合伙人 Litigation Partner VISCHER
Christian Oetiker
菲谢尔律师事务所
诉讼业务合伙人
Litigation Partner
VISCHER

The Swiss Federal Court in Lausanne has also been able to build up a very solid base of case law in those years, giving modern answers to numerous issues. The act and the case law are compatible with the arbitration rules of all the major arbitration institutions so that you can choose whatever institutional rules you prefer: Swiss law will support that choice. Any dispute involving a financial interest is arbitrable under the act, which means that the subject matter arbitrability is very far reaching. It has also proven to be an efficient framework for disputes between states (or state enterprises) and companies.

Supportive courts

Third, the Swiss state courts are very supportive of arbitration. They do not take an interventionist attitude. In fact, the act limits any intervention by the state courts to the minimum and provides that they be involved only in support of an arbitration (appointment of the arbitral tribunal, enforcement of arbitral evidentiary orders, etc.), recognising the parties’ choice and autonomy. The courts have accepted this role.

Civil law advantage

Fourth, Swiss contract law is also a good choice for international contracts, such that the parties opting for arbitration in Switzerland can bring the governing law into line with the dispute resolution. Switzerland is a civil law country. The contract law is codified and easily accessible, with a semi-official English translation in addition to the official versions in German, French and Italian. Hence, contrary to the common law jurisdictions originating from England, there is no need for costly research of the case law in order to assess the content of the law.

Contract negotiators and drafters from all over the world are attracted by the clearly defined, liberal and predictable legal framework Swiss law provides. It has been tested in thousands of contracts, including in international litigation and arbitration proceedings.

No restrictions

Having said this, it is obviously also perfectly feasible to submit contracts governed by foreign law for arbitration in Switzerland. On the one hand, there are numerous Swiss arbitration practitioners acting as arbitrators and counsel who are very able and experienced in dealing with such situations. On the other hand, the parties may nominate the arbitrators they think are best suited to deal with their case. There are no restrictions as to nationality, place of residence, profession etc. The only requirements are independence and impartiality. And there is also total freedom to retain the counsel of one’s choice. There are no limits on foreign counsel representing parties in Swiss arbitrations.

Swiss cities have invariably been ranked first or second among the chosen venues for arbitration proceedings of the International Chamber of Commerce worldwide since 2000, the most eminent of all arbitration institutions. Further, in 2004 the Swiss Chambers of Commerce enacted a very viable and modern set of arbitration rules, which were further modernised in 2012, and which are also available in a Chinese translation. The proceedings are administered by the Swiss Chambers’ Arbitration Institution.

Special link to China

In addition to the above-mentioned qualities, Switzerland is a very attractive choice for Chinese parties as an arbitration location, since there has been a special link between Switzerland and China for many years. In 1950, Switzerland was among the first of the Western countries to officially recognise the People’s Republic of China. In 1980, it was a Swiss enterprise that formed the first joint venture with a Chinese state-owned undertaking. And very recently, Switzerland, next only to Iceland, was the first significant Western economy to sign a bilateral free trade agreement with China.

Because all of these features, Switzerland is a first-tier location for arbitration comfortably able to compete with other established places such as London or Paris and live up to all the expectations a Chinese party may have of its ideal arbitration location.

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