New Swiss Rules of International Arbitration in force from 1 June 2012

The Chambers of Commerce and Industry in Switzerland (the Swiss Chambers) have recently published revised Rules of International Arbitration which come into force on 1 June 2012 (the 2012 Swiss Rules).  The 2012 Rules will apply to arbitration proceedings initiated on or after that date unless the parties agree otherwise.

While the amendments are not as substantial as those made to the 2012 ICC Rules (see blog dated 10 October 2011), the Swiss Chambers have followed the general trend amongst the arbitral institutions to seek to promote greater time and cost efficiency in its proceedings.

Key amendments include:

• Greater power given to the newly named Arbitration Court, including extending and shortening time-limits and ruling on arbitrator challenges.
• Requirement that all participants in the arbitral proceedings act in good faith, making every effort to contribute to the efficient conduct of the proceedings and to avoid unnecessary costs and delays.
• Shorter deadlines for the appointment of arbitrators and challenge of arbitrators.
• Requirement that parties serve their evidence with any pleadings.
• Increased flexibility in the consolidation of arbitration proceedings.
• Clarification of joinder provisions.
• Recognition of, and provision for, tribunals to grant interim relief in support of an arbitration, including on an ex parte basis.
• Introduction of new Emergency Arbitrator proceedings.

The Arbitration Institution of the Swiss Chambers was established in 2004 to offer arbitration services under an harmonized set of rules (the Swiss Rules), aiming to provide an alternative to ad hoc arbitration under the UNCITRAL rules and other arbitral institutions which were seen as overly costly in some quarters. In 2004, the Swiss Rules included many forward-thinking provisions which have been adopted subsequently by a number of other institutions. The amendments made in the 2012 Swiss Rules aim to keep the Swiss Chambers at the forefront of  institutional  best practice in international arbitration.

1. Powers of the Swiss Chambers' Arbitration Court

In the 2012 Swiss Rules, the name of the institution of the Swiss Chambers has been amended to the "Swiss Chambers' Arbitration Institution" to better reflect its  actual functions, with the erstwhile named "Arbitration Committee" that administers cases now being called the "Arbitration Court".  The Court is assisted by a Secretariat. The supervisory powers of the Arbitration Court have been extended, giving it greater scope to intervene in the arbitral process (Article 1.4) and in considering costs (Article 41).  The Arbitration Court has the power to decide on a challenge to an arbitrator (Article 11) and to extend or shorter any time-limit it has fixed (Article 2(3)), while the Secretariat is now undertaking administrative tasks previously assigned to the Committee in particular at the outset of the arbitration (Article 3).

2. Speed and Cost Efficiency

The focus of the amendments has been to continue to promote greater efficiency. New Article 15(7) provides a general requirement that all participants in the arbitral proceedings act in good faith and make every effort to contribute to the efficient conduct of the proceedings in order to avoid unnecessary costs and delays.  The 2012 Swiss Rules have not gone as far as the ICC's 2012 revisions and have not introduced an express potential cost consequence on a party who fails to conduct an arbitration in a cost-effective manner. However, there may well still be scope for an arbitral tribunal to consider the parties' conduct as a factor in apportioning costs under Article 40.  Whether tribunals choose to do so will remain to be seen.

The 2012 Swiss Rules also introduce a number of more minor amendments which are aimed at speed and cost efficiency, including (amongst others) the appointment of a party-appointed arbitrator at the same time as the Notice of Arbitration or Answer (Article 3(3)(h) and 3(7)(f)), a 15 day deadline for the challenge of an arbitrator (Article 11), and a requirement that submissions are accompanied by the documents and other evidence on which the parties rely (Articles 18(3) and 19(2)).

3. Consolidation and Joinder

Article 4(1) in the 2012 Swiss Rules has introduced greater flexibility in consolidation. The Arbitration Court has the right to decide (in consultation with the parties and any confirmed arbitrator in all proceedings), that a new case be consolidated with pending arbitral proceedings.  This includes where a Notice of Arbitration is submitted between parties that are not identical to the parties in the pending arbitral proceedings. The Arbitration Court also has the power to revoke the appointment and confirmation of arbitrators and to appoint arbitrators itself if necessary to enable consolidation. The discretion given to the Arbitration Court is greater than that offered under the 2012 ICC Rules, with the Court only being required to "take into account all relevant circumstances, including the links between the cases and the progress already made in the pending arbitral proceedings". However, in practice, it seems likely that the Court will exercise its discretion with restraint, recognising the consensual nature of each arbitration before it.

The amendments to the provisions on joinder are minimal, yet continue to offer more options in this regard than the 2012 ICC Rules, allowing a third party to intervene in proceedings at its own request or be joined where no claim against that third party exists.

4. Interim and Emergency relief

The Interim relief amendments of the 2012 Swiss Rules aim to bring clarity to this much-debated area. Article 26(5) of the 2012 Swiss Rules states expressly that the state courts and arbitral tribunals have concurrent jurisdiction to grant interim relief in support of arbitration and that the parties do not waive any right that they may have to submit a request for interim measures to a judicial authority by agreeing to arbitration. Article 26 now allows for the tribunal to modify, suspend or terminate any interim measures granted and to award compensation for any damage caused by an interim measure which later proves to have been unjustified. An entirely new addition, Article 26(3), allows a tribunal to grant ex parte interim relief in exceptional circumstances, provided that the party against whom that measure is directed is given the immediate opportunity to be heard.

Finally, Article 43 of the Swiss Rules introduces a new emergency relief procedure to address situations where a party needs urgent interim measures before the arbitral tribunal is constituted. In such cases, the Arbitration Court will appoint a sole emergency arbitrator.  The introduction of an emergency arbitrator provision follows that of other institutions with recent rule amendments (such as the ICC) but also allows the emergency arbitrator to grant preliminary orders in exceptional circumstances. It is also open to the Arbitration Court to refuse to appoint an emergency arbitrator and constitute the tribunal where it appears more appropriate.

Please note that this blog post is unable to address all changes made in the 2012 Swiss Rules. Should you wish to discuss any of the issues outlined above, or if you have any questions, please contact a member of our team for more details.