Challenging Arbitrary Arbitration Awards in Switzerland
Originally from the Journal of Enforcement of Arbitration Awards
Should an unsuccessful party in arbitral proceedings have the right to apply to a court for setting aside an award which, in this party’s view, is so obviously contrary to the facts of the case or results from manifestly incorrect application of the law by the tribunal to such a degree that it offends the sense of justice and may be considered as arbitrary? This question may be seen as part of a larger debate concerning the admissible degree of judicial control over the arbitral awards and the possibility of their substantive review. Over the last several decades, the legislatures and courts throughout the world have been searching for an optimal degree of court intervention into this process by trying to reconcile the objectives of finality and fairness of arbitral awards. As concerns the first objective, by agreeing to submit the resolution of their future disputes to arbitration instead of litigation before state courts, the parties should be prepared to accept that, unlike ordinary court judgements, the arbitral award should, in principle, be final and not subject to multiple layers of judicial review. At the same time, it may be safely assumed that by entrusting the resolution of their disputes to private individuals instead of state courts, the parties do not intend to give to these individuals carte-blanche to decide the case at their unlimited discretion and, therefore, still shall be entitled to expect that the resulting award is fair (whatever that means to the parties to the dispute). To ensure this second objective, arbitral awards usually are subject to a certain degree of scrutiny by state courts at the seat of arbitration, which, in turn, generally is perceived as promoting efficiency in international arbitration by enhancing the trust of the parties in the process.