Recent Swiss Developments on Exclusion Agreements - SIAR 2008-3
Laurent Lévy, Docteur en droit, Paris; Attorney at the Geneva Bar; Lévy Kaufmann-Kohler.
Tetiana Bersheda, Docteur en droit, Fribourg; LL.M. (Cantab); Attorney at the Geneva Bar; Lévy Kaufmann-Kohler.
Originally from: Stockholm International Arbitration Review (SIAR)
RECENT SWISS DEVELOPMENTS ON EXCLUSION AGREEMENTS
Laurent Lévy and Tetiana Bersheda
During the course of the year 2008, the Swiss Federal Court handed down three decisions concerning exclusion agreement, i.e. an agreement whereby the parties partly or totally exclude the grounds for setting aside an award. Two of these three are the subject matter of this contribution. The third one (decision 4A_224/2008 of 10 October 2008, para. 2.6.2) confirms the same principles. These decisions as well as all the other decisions of the Swiss Federal Court referred to below are available at <www.bger.ch>. Under Swiss law, an exclusion agreement is governed by Article 192 of the Swiss Federal Private International Law Act of 18 December 1987 ("PILA"), which has the following wording:
1. Where neither of the parties has its domicile, its habitual residence, or a place of business in Switzerland, the parties may, by an express statement in the arbitration agreement or by a subsequent agreement in writing, exclude all setting-aside proceedings; the parties may as well only provide for such an exclusion limited to one or several of the grounds listed in Article 190(2).
2. Where the parties have excluded all setting-aside proceedings and where an award is to be enforced in Switzerland, the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards applies by analogy.
One of the reasons why the Swiss law of international arbitration is generally characterized as "arbitration-friendly" is the wide recognition of the final nature of arbitral awards and an extremely limited review by national judges of international awards rendered in Switzerland. The judicial review of arbitral awards is limited in two respects: First, the Swiss Federal Court (i.e. the Swiss supreme court) has exclusive jurisdiction over appeals against international arbitral awards rendered in Switzerland pursuant to Article 191 PILA.