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IBA ARBITRATION COMMITTEE Subcommittee on Recognition And IBA ARBITRATION COMMITTEE Subcommittee on Recognition and Enforcement of Arbitral Awards COUNTRY REPORT ON LOCAL REQUIREMENTS FOR THE EXTENSION OF AN ARBITRATION CLAUSE TO, AND ENFORCEMENT OF AN ARBITRAL AWARD AGAINST, A NON-SIGNATORY December 2020 In completing this survey, we ask the respondents to consider the question of non-signatories in a broad manner. That is, please consider situations where (i) a party applies to a court to compel arbitration against a non- signatory, (ii) the arbitral tribunal extended the arbitration clause to a non-signatory, and the non-signatory, or another party to the arbitration, seeks to resist enforcement, or to set aside the award, on the basis that the arbitration clause should not have been extended to the non-signatory, and (iii) where the award creditor attempts to enforce the award against a non-signatory that was not a party to the arbitral proceedings and the award. SWITZERLAND Anna Kosmenko Schellenberg Wittmer, Zurich [email protected] (Yes/ Comments, if any. I. General No /NA) Must international arbitration agreements be in writing under the law of the Yes Pursuant to Art. 178(1) of country for which you are reporting? the Private International Law Act (PILA) as well as Art. 358 of the Swiss Civil Procedure Code (Swiss I.1 CPC), the arbitration agreement “must be made in writing or any other means of communication which permits it to be evidenced by a text.” 290486181.2 1/20 000134-000635 Please describe the basic requirements for a valid international arbitration Under Swiss law, an agreement in the country for which you are reporting and cite the relevant arbitration agreement is legislative, regulatory, or jurisprudential basis for these requirements. valid when the following requirements are met: [Please provide your response in the comments column and limit it to one paragraph.] (i) the parties have legal capacity, the capacity to be a party as well as the capacity to act and to conduct arbitral proceedings (arbitrability ratione personae), (ii) the dispute or legal relationship referred to in the arbitration agreement is capable of settlement by arbitration (arbitrability I.2 ratione materiae), (iii) the parties have reached consent on the essentialia negotii of the arbitration agreement (intention to submit disputes to arbitration and specification of the disputes or legal relationship subject to arbitration [whether the parties also need to designate at least a method to constitute the arbitral tribunal is disputed]), and (iv) the form requirements are met1 (see Section I.1). In the country for which you are reporting, do courts/arbitral tribunals Yes The Swiss Supreme Court generally decide the issue of the scope rationae personae of the arbitration in BGE 129 III 727 E. 5.3 clause (or, in other words, the issue of who are the parties to the arbitration has held that the personal agreement, including the issue of extending the arbitration agreement to a scope of an arbitration non-signatory) on the basis of a specific applicable law or on the sole basis of a agreement is an issue I.3 factual analysis of the case without reference to an applicable law? pertaining to the substance and thus has to be determined in accordance with the law governing the arbitration agreement in terms of Art. 178(2) PILA.2 1 BERGER/KELLERHALS, International and Domestic Arbitration in Switzerland, 2015, p. 115, para. 343. 2 BERGER/KELLERHALS, International and Domestic Arbitration in Switzerland, 2015, pp. 185-186, para. 539; LANDBRECHT/WEHOWSKY, Determining the Law Applicable to the Personal Scope of Arbitration Agreements and its 'Extension', ASA Bulletin 4/2017, p. 848. 290486181.2 2/20 000134-000635 If courts/arbitral tribunals generally decide the issue on the basis of a specific Art. 178(2) PILA lays down applicable law, what law do they apply to decide the issue? an in favorem validitatis conflict of laws cascade [For example, the applicable law could be: designating three alternative connecting factors: "an • The law of the seat of arbitration. arbitration agreement is • The governing law of the contract. valid if it conforms either to • The law of the place where the award might ultimately be sought to be the law chosen by the enforced. parties, or to the law • Transnational norms/international law. governing the subject matter of the dispute, in I.3a • The law reached at through a conflict of laws analysis.] particular the main contract, or to Swiss law." [Please provide your response in the comments column, provide any citation to relevant legislation or jurisprudence, and limit your response to one paragraph.] Thus, the ratione personae scope of an arbitration agreement is determined by these three laws. It is sufficient if one of the applicable laws confirms the validity of the arbitration agreement.3 Does the legislation of your jurisdiction contain any directive in this respect? Yes Swiss arbitration law addresses the substantive [Please provide your response in the comments column and limit it to one validity of the arbitration paragraph.] agreement (which according to the Swiss I.3b Supreme Court includes the question of its personal scope, see Section I.3) in the conflicts of law rule of Art. 178(2) PILA.4 Is the question of whether parties agree to arbitrate ultimately decided by Yes This question is usually arbitrators as opposed to courts in the country for which you are reporting? decided by the arbitrators Please cite the relevant legislative, regulatory, or jurisprudential basis for due to the application of the your answer. Kompetenz-Kompetenz I.4 doctrine under Art. 186(1) [Please provide your response in the comments column and limit it to one PILA, which provides that paragraph.] "the arbitral tribunal shall itself decide on its jurisdiction". 3 See e.g. MEIER in ARROYO (ed), Arbitration in Switzerland: The Practitioner's Guide, 2nd edition, 2018, p. 2506, para. 6. See also BGE 129 III 727 E 5.3.2. 4 MÜLLER/RISKE in ARROYO (ed), Arbitration in Switzerland: The Practitioner's Guide, 2nd edition, 2018, p. 73, para. 11. 290486181.2 3/20 000134-000635 Is there anything in the legislation of the country for which you are reporting No that (i) could preclude the extension of an arbitration clause to non- signatories, or (ii) could permit the extension of an arbitration clause to non- signatories? I.5 [Note that the answer to this question is designed to provide the reader with a quick yes or no answer, plus to flag the key legal criteria. The series of questions in Section II provide the reader with a more detailed discussion of relevant legal theories, jurisprudence, and examples.] If your answer to question I.5 is yes, please cite and describe the applicable rules contained in any relevant legislation or regulations. I.5a [Please provide your response in the comments column and limit it to one paragraph.] Is there anything in the jurisprudence of the country for which you are Yes The Swiss Supreme Court reporting that (i) could preclude the extension of an arbitration clause to non- has long held that while an signatories, or (ii) could permit the extension of an arbitration clause to non- arbitration clause is in signatories? principle only binding on the contracting parties, [Note that the answer to this question is designed to provide the reader with a there are certain situations I.6 quick yes or no answer, plus to flag the key legal criteria. The series of where non-signatories can questions in Section II provide the reader with a more detailed discussion of be bound by an arbitration the relevant legal theories, jurisprudence, and examples.] clause, for instance, in cases of assignment of a claim, the assumption of debt, or the transfer of a contract. See BGE 129 III 727 E. 5.3. If your answer to question I.6 is yes, please cite and describe the applicable tests or There are no general rules applied by the courts of the country for which you are reporting. applicable tests or rules on the extension of an [Please provide your response in the comments column and limit it to one arbitration clause to a non- paragraph.] signatory. Rather, specific case law and legal doctrine I.6a have developed over time different situations where the question of extending the arbitration clause to non-signatories has arisen. See Section II for details on such situations. 290486181.2 4/20 000134-000635 (Yes/ Additional comments, if II. Specific Legal Theories Concerning Non-Signatories No any. /NA) Can the assignment or assumption of a contract containing an international Yes The Swiss case law and arbitration agreement commit the non-signatory assignee to international legal scholars in arbitration in the country for which you are reporting? Or is the legislation Switzerland unanimously and jurisprudence in the country for which you are reporting silent on the agree that an assignee of a issue? claim is bound by, and in turn may also rely on, an arbitration agreement that covers the assigned claim.5 In particular, it is observed that "[t]he arbitration agreement is […] transferred – as an II.1 accessory clause of a procedural nature – to the assignee, subject to an agreement to the contrary. The same is true in the case of an assumption of debt, where a new debtor, by means of a contract with the creditor, agrees to assume […] a pre-existing debt arising of a contract containing and arbitration clause."6 5 BERGER/KELLERHALS, International and Domestic Arbitration in Switzerland, 2015, pp. 187-193, paras. 543-557. 6 BÄRTSCH/PETTI in GEISINGER/VOSER (ed), International Arbitration in Switzerland, 2013, p. 33, para. 3.02 [B][1][d].
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