Workshop Swiss Rules of International Arbitration Expedited Procedure , Emergency Relief, Awards ...
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WorkshopSwiss Rules of International Arbitration
Expedited Procedure, Emergency Relief, Awards and Costs
Prague, 5 October 2012Dr. Philipp Habegger LL.M., Walder Wyss AGMember of the Arbitration Court of the Swiss Chambers’ Arbitration Institution
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1. Expedited Procedure (I)Applicable if:
– Parties so agree (Art. 42(1))– Aggregate of claim, counterclaim (or any set-
off defence) does not exceed CHF 1 Mio. [and Court does not decide otherwise taking into account all relevant circumstances] (Art. 42(2))
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1. Expedited Procedure (II)Very popular due to cost efficiency and speed:
– 33% of all cases in 2011, 45% in 2010, 30% in 2009
– Award to be made within six months from the date of transmission of file to arbitral tribunal [usually a sole arbitrator under the regime of Art. 42(2); cf. Art. 42(2)(b) and (c)]
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2. Emergency Relief (I)Art. 43: availability of interim measures that cannot wait until the arbitral tribunal has been constituted:
– Available even before Notice of Arbitration is filed (Art. 43(1))
– Parallel competence with state courts (Art. 43(1) in conjunction with Art. 26(5))
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2. Emergency Relief (II)- General transitional rule of Art. 1(3) applies:
applicable to proceedings in which Notice of Arbitration is submitted on or after 1 June 2012, unless the parties have agreed otherwise -> jurisdictional issue to be decided by the emergency arbitrator (>< ICC Rules)
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2. Emergency Relief (III)Application for emergency relief to include:
– Particulars of Arts. 3(3)(b) to (e);– Advisable: when referring to arbitration
agreement address jurisdiction and applicability of Art. 43;
– Statement of interim measure(s) sought and reasons therefor, in particular the reason for the purported urgency;
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2. Emergency Relief (IV)Application for emergency relief to include:
– Comments on language, seat of arbitration (even if agreed between parties >< Art. 3(3)(g) only if not previously agreed);
– Comments on applicable law (>< Art. 3(3)(g) not needed);
– Confirmation of payment of Registration Fee of CHF 4,500 and Deposit of CHF 20,000 (Appendix B Section 1.6).
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2. Emergency Relief (V)- If Notice of Arbitration not yet pending ->
to be filed at latest within 10 days after filing of application (Art. 43(3)) -> otherwise termination of proceedings (any decision on application already rendered ceases to be binding; Art. 43(10))
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2. Emergency Relief (VI)Art. 43(2): Court to appoint sole emergency arbitrator “as soon as possible after receipt of the Application”, unless:
– Manifestly no agreement to arbitrate under Swiss Rules (= Art. 3(12); test to be stricter (?)); or
– More appropriate to proceed with constitution of tribunal and refer application to it (cf. Art. 2(3) for acceleration of constitution).
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2. Emergency Relief (VII)Art. 43(4): Arts. 9 to 12 apply to challenge of emergency arbitrator, but time-limits reduced from fifteen to three days. If challenge successful: decision stands (>< ICC) -> may be modified by tribunal or replacement emergency arbitratorArt. 43(5): Absent agreement by the parties, Court to fix seat of emergency relief proceedings without prejudice to later determination of seat of arbitration (Art. 16).
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2. Emergency Relief (VIII)Art. 43(6): wide discretion for conduct of proceedings.
– Proceedings should reflect inherent urgency;– Each party to be granted “reasonable
opportunity to be heard on the Application”;– Neither formal in person hearing, nor full
exchange of submissions necessarily required;
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2. Emergency Relief (IX)- Decision to be rendered within fifteen days from
the date file was transmitted to emergency arbitrator (Art. 43(7); file will only be transmitted once Registration Fee and Deposit are paid, Appendix B Section 1.6). Extensions for rendering of decision may be agreed by the parties or granted by the Court.
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2. Emergency Relief (X)Art. 43(8) and (9): Decision has same effects as a decision pursuant to Art. 26, i.e.,
– Decision on application may be in form of an award (>< ICC);
– Emergency arbitrator may issue preliminary orders (>< ICC and others);
– Decision, if necessary, should rule on emergency arbitrator’s jurisdiction;
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2. Emergency Relief (XI)Art. 43(8) and (9): Decision has same effects as a decision pursuant to Art. 26, i.e.,
– Reasons may be stated in summary form (Art. 42(1)(e) by analogy);
– Decision is binding on parties (Art. 15(7)), but not on subsequent tribunal, which may modify, suspend or terminate it (Art. 43(8));
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2. Emergency Relief (XII)- Decision to determine fees, costs and expenses
of emergency arbitrator subject to approval by the Court (Art. 43(9)), but not other cost items -> other cost items will be determined later by arbitral tribunal. If later no tribunal constituted -> separate cost award by emergency arbitrator (>< ICC) -> enforceability.
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3. Awards (I): Few Changes– Former Art. 32(2): duty of parties to comply with award -
> now Art. 15(7)– Art. 35(1), 36(1), 37(1): Clarification: requests for
correction, interpretation or additional award to be addressed to Secretariat.
– Art. 35(2), 37(2): extensions of time for interpretation or additional award to be granted by Court (only)
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3. Awards (II): what did not change– Art. 31(1): if no majority, president may make award
alone– Art. 32(1): tribunal may make final, interim, interlocutory,
or partial awards and may award costs in awards that are not final.
– Art. 32(1): obligation to state reasons, unless parties agree that no reasons are to be given
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4. Determination of Costs (I)- Art. 38: „the arbitral tribunal shall determine the costs of
arbitration in its award“ -> „The award shall contain a determination of the costs of the arbitration“.
- Art. 32(1), 40(3), 40(5): Cost determinations may be made in final award, award by consent, termination order, interim or partial awards. Also in decisions on correction or interpretation of awards or additional awards.
- Art. 38(a): Determination of arbitrator’s fees and expenses by arbitral tribunal (Art. 38(b+c)).
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4. Determination of Costs (II)- Appendix B Section 5: if arbitrator fees subject to VAT or
other fiscal charge, parties have a duty to pay such taxes or charges
- Art. 41(1): may tribunal request deposit in the amount of VAT likely to become payable?
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4. Determination of Costs (III)- Art. 38(a), 38(b): new [expressly states]: fees of
secretary of tribunal falls under Art. 38(a) -> if added to fees of arbitrators still to be within range of scale of Appendix B Section 6 -> expression of principle that total of fees shall not be higher if secretary assists the tribunal.
- Costs of secretary may not be qualified as „cost of other assistance required by the arbitral tribunal“ according to Art. 38(c)!
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4. Determination of Costs (IV)- Art. 39(1): both fees and (new) expenses of arbitrators
must be reasonable- Art. 39(2): fees are to be determined in accordance with
Appendix B. The scale for fees and administrative costs has remained unchanged compared to the Swiss Rules 2004.
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5. Cost Control (I)- Swiss Rules 2004: mere consultation of the Chambers
by the tribunal regarding costs (only amendment to Art. 40 UNCITRAL 1976). Costs only subject to approval if amounts in scale exceeded
- Art. 41(3) and 41(4) UNCITRAL 2010 provide right to parties to have fee proposal and cost determination by tribunal checked, approved, and – if need be – adjusted by ‚appointing authority‘ -> increased cost control in ad-hoc proceedings
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5. Cost Control (II)- Art. 40(4): new: Not only awards, but as well termination
orders and decisions re correction, interpretation and additional awards must be submitted to Court regarding the cost decision
- New: in all instances (not only if amounts in scale of Apppendix B exceeded) submitted for approval (not mere consultation) with competence of Court to adjust
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5. Cost Control (III)- Art. 40(4): „Any such approval or adjustment by the
Swiss Chambers‘ Court shall be binding upon the arbitral tribunal“
- Court approves or adjusts; and fixes administrative costs (Appendix B Section 2.2, Art. 38(f)). No administrative costs if amount in dispute below CHF 2 Mio.
- No cost control regarding:- Costs items in Art. 38(d) to 38(e) (e.g. witness and legal costs)- Costs for Emergency Arbitrator (prior approval/adjustment
pursuant to Art. 43(9)) -> no review de novo- Allocation of costs between the parties
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5. Cost Control (IV)- Art. 40(4): approval or adjustment binding on arbitral
tribunal- Issue of Federal Supreme Court decision 136 III 597,
602 cons. 5.2 not resolved! I.e., not binding on and enforceable against parties.
- Still responsibility of tribunals to timely request deposits pursuant to Art. 41(1) and to check that they are paid
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5. Cost Control (V)- Appendix B Section 4 (‘Guidelines for the accounting of
expenses’) available on www.swissarbitration.org.- Core issues:
- Per diem allowances for days spent away from place of business
- Threshold amounts for advances on fees and expenses- No advances on fees and expenses in Expedited Proceedings
and Emergency Relief proceedings- Striking balance between adequate control and
efficiency/‘lean administration‘/avoiding delay in issuing awards
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6. Deposit of Costs (I)- Art. 41(4): new: time-limit for payment of deposits
reduced to 15 days -> tribunals may suspend/terminate proceedings sooner
- Art. 41(1) and 41(3): duty to consult Court for deposits (approval if amounts in Appendix B Section 6 exceeded)
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6. Deposit of Costs (II)- Art. 42(1)(a) and App. B Section 1.4 /1.5 [Art. 5(5)]:
Provisional Deposit of CHF 5‘000 in Expedited Procedures. Transfer of file subject to payment. Payment considered partial payment of deposit fixed by tribunal (Art. 41(1)).
- To cover initial efforts of sole arbitrator, such as:• Preparation of provisional timetable in consultation
with parties (Art. 15(3));• Issuing of initial procedural directions (Art. 15(1));• determination of language(s) of proceedings (Art.
17(1): “promptly after its appointment”)
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6. Deposit of Costs (III)- Art. 43(1)(c) and (2): deposit for Emergency Arbitrator in
the amount of maximum fees (CHF 20‘000)- Appendix B Section 4.2: advances on fees for arbitrators
if substantial steps/mile-stones in proceedings are achieved. Subject to approval by Court -> Guidelines on Expenses
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THANK YOU FOR YOUR ATTENTION !
Dr. Philipp Habegger LL.M.