Summary Contents

Authors’ preface ...... V Contents ...... XV Bibliography ...... XXXIX List of Abbreviations LXXIII

Chapter 1 Introduction and Basic Principles ...... 1

Chapter 2 The Arbitration Agreement and the of the Arbitral 73

Chapter 3 The Arbitral Tribunal ...... 173

Chapter 4 The Arbitral Procedure ...... 243

Chapter 5 Conditions of Admissibility ...... 339

Chapter 6 The Applicable to the Merits of the Case ...... 391

Chapter 7 The Award ...... 423

Chapter 8 Recognition and Enforcement of Arbitral Awards ...... 521

Chapter 9 Treaty-based Investment Arbitration...... 575

Chapter 10 Sports Arbitration ...... 613

Table of Cases ...... 663

Index ...... 703

XIII Contents

Authors’ preface ...... V Summary Contents ...... XIII Bibliography ...... XXXIX List of Abbreviations LXXIII

Chapter 1 Introduction and BasicPrinciples ...... 1

A. The concept of arbitration ...... 3 I. The fundamental features of arbitration and the main differences from state litigation ...... 3 1. Definition...... 3 2. Arbitration as an alternative means of ...... 3 3. The arbitration agreement - foundation of every arbitration ...... 3 4. The arbitral tribunal ...... 4 5. The parties choose the place/seat of the arbitration ...... 6 6. The arbitration procedure is determined and controlled by the parties ...... 7 7. The arbitral tribunal renders a final, binding and enforceable decision ...... 7 8. Arbitrability ...... 8 II. Other forms of alternative dispute resolution ...... 8 1. What does alternative dispute resolution (ADR) mean? ...... 8 2. Mediation and conciliation ...... 9 3. Expert determination ...... 13 4. Judicial conciliation in Switzerland ...... 15

B. Types of arbitration ...... 17 I. Ad hoc arbitration vs. institutional arbitration ...... 17 1. Introductory comments ...... 17 2. Ad hoc arbitration ...... 17 a) Advantages ...... 17 b) Disadvantages ...... 19 c) Proper drafting of the arbitration agreement in ad hoc arbitration ...... 21 3. Institutional arbitration ...... 22 a) Overview ...... 22 b) Advantages ...... 24 c) Disadvantages ...... 25 d) Choice of the arbitral institution ...... 25 e) Drafting the arbitration agreement in institutional arbitration ...... 27

XV II. Domestic arbitration vs. international arbitration ...... 28 1. Introductory comments ...... 28 2. International arbitration ...... 28 a) Focus on the parties to the dispute ...... 28 b) Focus on the nature of the dispute ...... 29 c) A combined approach ...... 30 3. Domestic arbitration ...... 30 4. Difficulties resulting from the different concepts of “international” and “domestic” ...... 31

C. Advantages and disadvantages of arbitration ...... 32 I. Advantages of arbitration ...... 32 1. Opportunity to choose the place of arbitration ...... 32 2. Opportunity to choose the members of the arbitral tribunal ...... 32 3. Arbitration leads to an enforceable arbitral award ...... 33 4. Flexibility of arbitral proceedings ...... 35 5. Confidentiality...... 36 6. Time ...... 37 II. Disadvantages of arbitration ...... 38 1. Costs ...... 38 2. Limited powers of arbitrators ...... 40 3. Conflicting awards ...... 40

D. Regulatory framework of arbitration ...... 41 I. Introductory comments ...... 41 II. Regulatory framework of domestic arbitration ...... 41 1. Comparative overview ...... 41 2. Switzerland ...... 41 III. Regulatory framework of international arbitration ...... 45 1. Introductory comments ...... 45 2. Supranational law ...... 45 a) The New York Convention ...... 45 b) The Geneva Protocol and the Geneva Convention ...... 46 3. National law ...... 47 a) The lex arbitri ...... 47 b) UNCITRAL Model Law...... 49 c) Chapter 12 of the SPILA ...... 50 aa) General characteristics of Chapter 12 SPILA ...... 50 bb) Conditions for the application of Chapter 12 SPILA ...... 52 (i) First condition: Seat of arbitration in Switzerland ...... 53

XVI (ii) Second condition: One of the parties has its domicile, habitual residence or corporate seat outside Switzerland ...... 53 (iii) Third condition: No opting-out ...... 55 d) The 2020 revision of Chapter 12 SPILA ...... 55 4. Non-national law: Rules established by the parties or chosen arbitration rules 57 a) Introductory comments ...... 57 b) Ad hoc and institutional arbitration rules ...... 57 c) A few important and well-known institutional arbitration rules ...... 58 aa) International Chamber of Commerce Arbitration Rules ...... 58 bb) London Court of International Arbitration Rules ...... 60 cc) International Centre for Dispute Resolution Procedures ...... 61 dd) Swiss Chambers’ Arbitration Institution (in 2021 renamed: “Swiss Arbitration Centre”) Arbitration Rules ...... 62 ee) China International Economic and Trade Arbitration Commission Arbitration Rules ...... 63 ff) Singapore International Arbitration Centre Arbitration Rules ...... 64 gg) Hong Kong International Arbitration Centre Arbitration Rules .... 65 hh) Arbitration Institute of the Stockholm Chamber of Commerce Arbitration Rules ...... 66 ii) German Institution of Arbitration Rules ...... 67 d) Specialized arbitration institutions ...... 67 aa) Court of Arbitration for Sport ...... 67 bb) International Centre for Settlement of Investment Disputes ...... 68 cc) World Organization ...... 69 5. Best practice standards ...... 70

Chapter 2 The Arbitration Agreement and the Jurisdiction of the Arbitral Tribunal 73 A. Introductory comments ...... 75 I. Definition and purpose of the arbitration agreement ...... 75 IL Key elements of the arbitration agreement...... 75

B. Validity of the arbitration agreement ...... 77 I. Comparative overview ...... 77 1. Introductory comments ...... 77 2. Form of the arbitration agreement ...... 78 3. Substantive validity of the arbitration agreement ...... 79 a) Consent to refer the dispute to arbitration (essentialia negotii 1) ...... 80 aa) Interpretation of the parties’ consent ...... 80 bb) Degree of specificity required ...... 81 cc) Pathological arbitration clauses ...... 82

XVII dd) Arbitration clauses incorporated by reference ...... 82 ee) Asymmetrical clauses ...... 83 ff) Arbitration clauses in unilateral legal acts and articles of association 84 b) Designation of the legal relationship (essentialia negotii 2) ...... 84 4. Who is bound by the agreement to arbitrate? ...... 85 5. Subject matter covered by the parties’ consent ...... 88 a) Introductory comments ...... 88 b) Counterclaim ...... 89 c) Set-off...... 89 6. Arbitrability of the subject matter of the dispute ...... 90 7. Capacity of parties to enter into an arbitration agreement ...... 92 IL Swiss Law ...... 94 1. General comments ...... 94 2. Form of arbitration agreement ...... 94 a) General comments ...... 94 b) Requirements under Art. 178(1) SPILA ...... 96 c) Special issues regarding the form of the arbitration agreement ...... 98 d) Art. 11(2) New York Convention ...... 99 3. Substantive validity of the arbitration agreement ...... 100 a) The principle of favor validitatis (Art. 178(2) SPILA) ...... 100 b) Scopeof Art. 178(2) SPILA ...... 102 c) Law governing the substantive validity of the arbitration agreement .... 103 aa) Choice of a specific law by the parties to govern the arbitration agreement ...... 103 bb) The law applicable to the merits of the dispute (lex causae) ...... 104 cc) Swiss law ...... 104 d) Consent of the parties with regard to the essential elements of the arbitration agreement (essentialia negotii) ...... 104 aa) Consent to refer the dispute to arbitration (essentialia negotii 1) ... 105 (i) Introductory comments ...... 105 (ii) Interpretation of the arbitration agreement with regard to consent ...... 105 (iii) Arbitration clauses incorporated by reference...... Ill (iv) Corporate disputes ...... 112 (v) Arbitration clauses in unilateral acts ...... 116 (vi) Asymmetrical arbitration clauses ...... 117 bb) Designation of the legal relationship (essentialia negotii 2) ...... 117 4. Who is bound by the agreement to arbitrate? ...... 118 a) General principles ...... 118 b) Extension as issue of substantive validity ...... 119 c) Situations considered by the Swiss Supreme Court ...... 120

XVIII 5. Subject matter covered by the parties’ consent ...... 124 a) Introductory comments ...... 124 b) Counterclaim ...... 125 c) Set-off...... 125 6. Arbitrability of the subject matter of the dispute ...... 127 a) Introductory comments ...... 127 b) Special issues regarding arbitrability ...... 129 aa) Competition and anti- ...... 129 bb) Family and succession law matters ...... 130 cc) Intellectual property ...... 131 dd) Non-enforceable claims ...... 131 ee) Bankruptcy law ...... 131 ff) Consumer disputes ...... 132 gg) Employment disputes ...... 132 hh) Company disputes ...... 133 7. Capacity of the parties to enter into an arbitration agreement ...... 134 8. Ineffective arbitration clauses under Swiss law ...... 136 a) Formal deficiencies ...... 136 b) Invalidity due to defect in the conclusion of the arbitration agreement .. 137 c) Deficiencies regarding content ...... 138

C. Content of an arbitration agreement ...... 139 I. Introductory comments ...... 139 II. Content of a properly drafted arbitration agreement ...... 139 1. Ad hoc or institutional arbitration ...... 139 2. Seat of arbitration ...... 140 3. Composition of the arbitral tribunal ...... 141 4. Applicable substantive and ...... 141 5. Language of the arbitration ...... 141 6. Agreement to exclude the right to challenge the award ...... 141 7. Provisions for multi-party proceedings ...... 142 D. Effects of the arbitration agreement ...... 142 I. Comparative overview ...... 142 1. Positive effects ...... 142 a) The parties’ obligation to submit disputes to arbitration ...... 142 b) Enforcement of the obligation to arbitrate ...... 143 c) The arbitral tribunal has jurisdiction ...... 144 2. Negative effect ...... 144 IL Swiss law ...... 145 1. Enforcement of an obligation to submit to arbitration ...... 146

XIX 2. Review of the arbitral tribunal’s jurisdiction by state ...... 147 a) Swiss Supreme Courts approach ...... 148 b) Arguments in favor of a limited (prima facie) review ...... 150 c) Arguments against a limited (prima facie) review ...... 151

E. Termination of the arbitration agreement ...... 152 I. Comparative overview ...... 152 1. Introductory comments ...... 152 2. Ways and reasons for termination ...... 153 a) Mutual consent to terminate the arbitration agreement ...... 153 b) Waiver ...... 153 c) Unilateral termination by one of the parties ...... 153 d) Purpose fulfilled by the rendering of a final award ...... 154 e) Purpose becomes impossible ...... 155 3. Effects of the termination of the arbitration agreement ...... 155 II. Swiss law ...... 155 1. Mutual consent to terminate the arbitration agreement ...... 155 2. Unilateral termination by one of the parties ...... 156

F. Theory of “separability”/“severability” ...... 158 I. Comparative overview ...... 158 II. Swiss law ...... 159

G. Principle of “competence-competence” ...... 160 I. Comparative overview ...... 160 1. Introductory comments ...... 160 2. The positive and the negative effect of “competence-competence” ...... 160 3. Practical relevance of the principle of “competence-competence” ...... 162 4. Combined effect of “separability” and “competence-competence” ...... 162 II. Swiss law ...... 163 1. Introductory comments ...... 163 2. The arbitral tribunal’s ruling on its own jurisdiction ...... 163 3. Jurisdiction of the arbitral tribunal and the principle of lis pendens ...... 166

H. Complex arbitration ...... 166 I. Comparative overview ...... 166 1. Multi-party arbitration ...... 167 2. Joinder...... 167 3. Consolidation ...... 169 4. Group of ...... 170 II. Swiss Law ...... 171

XX Chapter 3 The Arbitral Tribunal...... 173

A. Seat of the arbitral tribunal ...... 175 I. Comparative overview ...... 175 1. Definition of the seat of the arbitral tribunal ...... 175 2. Legal consequences of the seat of arbitration ...... 175 3. Designation of the seat of arbitration ...... 177 4. Transfer of the seat of arbitration ...... 177 II. Swiss law ...... 178 1. Legal consequences of the seat of arbitration ...... 178 a) The seat determines the lex arbitri ...... 178 b) The seat of arbitration and state court assistance ...... 178 c) The seat defines the jurisdiction of local state courts to review the award 179 d) The seat determines the “nationality” of the arbitralaward ...... 179 2. Designation of the seat of arbitration ...... 180 a) Designation of the seat by the parties ...... 180 b) Designation of the seat by an arbitral institution or by the arbitral tribunal 181 aa) General comments ...... 181 bb) Designation of the seat by an arbitral institution ...... 181 cc) Designation of the seat by the arbitral tribunal ...... 182 3. Transfer of the seat of the arbitral tribunal ...... 182

B. of the arbitral tribunal ...... 183 I. Comparative overview ...... 183 1. Introductory comments ...... 183 2. Number of arbitrators ...... 184 3. Qualifications of the arbitrator(s) ...... 186 4. Impartiality and independence ...... 187 a) Disclosure ...... 189 b) IBA Guidelines on Conflicts of Interest ...... 189 c) Violation of duty of impartiality and independence ...... 192 5. Appointment of arbitrators ...... 192 a) Appointing mechanism ...... 192 b) Multi-party arbitration and the constitution of the arbitral tribunal...... 194 6. Administrative secretary ...... 195 II. Swiss law ...... 198 1. Number of arbitrators ...... 198 2. Qualifications of arbitrator(s) ...... 198 3. Impartiality and independence ...... 199 a) Art. 180(l)(c) SPILA ...... 200

XXI b) Duty of disclosure ...... 200 c) Challenge/setting aside ...... 201 d) Guidelines on conflicts of interest ...... 201 e) Practice of the Swiss Supreme Court ...... 202 4. Appointment of arbitrators ...... 204 a) Autonomy of the parties to agree on the appointment of arbitrators .... 204 b) Appointment of arbitrators by an institution or a third person ...... 205 c) Appointment of arbitrators by a state court ...... 205 d) The right to appeal an appointment decision ...... 208 aa) Cantonal level ...... 208 bb) Federal level ...... 208 e) Appointment decisions issued by private institutions ...... 209 5. Administrative secretary ...... 209

C. Challenging an arbitrator ...... 211 I. Comparative overview ...... 211 1. Introductory comments ...... 211 2. Grounds for challenge ...... 211 3. Procedure ...... 211 4. Limitations to the right to challenge an arbitrator ...... 213 5. Replacement of the challenged arbitrator ...... 214 II. Swiss law ...... 214 1. Grounds for challenge ...... 214 a) Art. 180(l)(a) and (b) SPILA ...... 214 b) Art. 180(l)(c) SPILA ...... 215 2. Procedure ...... 215 3. Limitations to the right to challenge an arbitrator ...... 216 4. Appeal against a challenge decision ...... 219

D. Dismissal, removal, resignation and replacement of an arbitrator ...... 221 I. Comparative overview ...... 221 1. Introductory comments ...... 221 2. Dismissal of an arbitrator ...... 221 3. Removal of an arbitrator ...... 222 4. Resignation of an arbitrator...... 223 5. Replacement of an arbitrator ...... 224 a) Replacement procedure ...... 224 b) Truncated arbitral ...... 225 c) Consequences of a replacement ...... 226 II. Swiss law ...... 227 1. Dismissal of an arbitrator ...... 227

XXII 2. Removal of an arbitrator ...... 228 3. Resignation of an arbitrator...... 230 4. Replacement of an arbitrator ...... 231 a) Replacement procedure ...... 231 b) Suspension of the arbitral proceedings ...... 231 c) Consequences of a replacement ...... 232

E. Relationship between the arbitrators and the parties...... 232 I. Comparative overview ...... 232 1. The arbitral ...... 232 2. Obligations and rights of an arbitrator ...... 233 a) The obligation to render an award ...... 234 b) The obligation to complete the mandate ...... 234 c) The obligations after rendering the award ...... 234 d) The obligation to remain independent and impartial and the obligation to disclose possible conflicts of interest ...... 235 e) The duty of confidentiality ...... 235 f) The arbitrators civil liability ...... 236 g) The arbitrator’s fees ...... 237 3. Beginning and end of the legal relationship between the arbitrators and the parties ...... 238 II. Swiss law ...... 239 1. The arbitral contract ...... 239 2. Obligations and rights of an arbitrator ...... 240

Chapter 4 The Arbitral Procedure ...... 243 A. Commencement of arbitration ...... 245 I. Comparative overview ...... 245 1. Introductory comments ...... 245 2. Legal consequences of the commencement of arbitral proceedings...... 245 3. Date of commencement ...... 246 4. Initiating documents ...... 247 IL Swiss law ...... 248 1. Pendency of the arbitration proceedings ...... 248 a) Arbitrators named in the arbitration agreement ...... 249 b) Arbitrators not named in the arbitration agreement...... 249 c) Exact date of the pendency of the arbitration ...... 250 2. Legal consequences of the pendency of the arbitral proceedings ...... 251 a) Inadmissibility of other proceedings ...... 251

XXIII b) Compliance with time limits under Swiss law ...... 251

B. Determining the arbitral procedure ...... 253 I. Comparative overview ...... 253 1. The parties’ freedom to agree on the procedure ...... 253 2. The arbitral tribunal’s power to determine the procedure in the absence of an agreement by the parties ...... 254 3. Limitations to the procedure adopted: compliance with the parties’ right to equal treatment and right to be heard ...... 255 a) Introductory comments ...... 255 b) Right to equal treatment ...... 256 c) Right to be heard ...... 256 II. Swiss law ...... 257 1. The parties’freedom to agree on the procedure ...... 257 2. The arbitral tribunal’s power to determine the procedure in the absence of an agreement of the parties ...... 258 3. Limitations to the procedure adopted: compliance with the parties’ right to be heard and their right to equal treatment ...... 259 a) Right to be heard ...... 259 b) Right to equal treatment ...... 261

C. Organization of the arbitral procedure ...... 262 I. Comparative overview ...... 262 1. Procedural rules established by the arbitral tribunal ...... 262 2. Timing ...... 262 3. Preliminary meetings and case management conference ...... 263 4. Content of the procedural rules ...... 264 5. Form of procedural rules ...... 265 6. Terms of reference and terms of appointment ...... 266 7. Language of the arbitration ...... 267 8. Representation of the parties...... 268 9. Deposit of costs ...... 270 10. Procedural timetable ...... 270 11. Multitude of approaches ...... 270 II. Swiss law ...... 271 1. Procedural rules established by the arbitral tribunal ...... 271 2. Selected issues ...... 272

D. Written submissions ...... 273 I. Comparative overview ...... 273 1. Introductory comments ...... 273

XXIV 2. Exchange of written submissions ...... 273 3. Content of written submissions ...... 274 II. Swiss law ...... 275

E. Taking of ...... 275 I. Comparative overview ...... 275 1. Introductory comments ...... 275 2. Determination of the rules relating to the taking of evidence ...... 277 3. Admissibility and probative value ...... 278 4. Burden of proof...... 279 5. Evidentiary means ...... 280 a) Production of documents ...... 280 b) Witness testimony ...... 284 c) Expert witness testimony ...... 287 aa) Party-appointed experts ...... 287 bb) Tribunal-appointed experts ...... 288 d) Inspection ...... 289 6. Assistance of state courts in relation to the taking of evidence ...... 290 II. Swiss law ...... 292 1. Introductory comments ...... 292 2. Admissibility and probative value ...... 293 3. Burden of proof...... 293 4. Evidentiary means ...... 294 a) Witness testimony ...... 294 b) Expert witness testimony ...... 294 5. Assistance of the Swiss state courts in relation to taking of evidence ...... 296

F. Hearings ...... 299 I. Comparative overview ...... 299 1. Introductory comments ...... 299 2. Organization of hearings ...... 300 3. Ex parte hearings and default proceedings in general ...... 303 4. Procedure after the hearing ...... 305 II. Swiss law ...... 305

G. Interim measures ...... 306 I. Comparative overview ...... 306 1. Introductory comments ...... 306 2. Jurisdiction of the arbitral tribunal to order interim measures ...... 306 3. Jurisdiction of the state courts to order interim measures ...... 308

XXV 4. Relationship between the state court’s jurisdiction and the jurisdiction of the arbitral tribunal ...... 309 5. Conditions for ordering interimmeasures ...... 311 a) General comments ...... 311 b) Ex parte measures ...... 313 6. Content of interim measures...... 315 7. Form of orders for interim measures ...... 317 8. Recognition and enforcement of interim measures ordered by arbitral tribunals ...... 317 a) Introductory comments ...... 317 b) Penalties for non-compliance with interim measures ordered by the arbitral tribunal ...... 318 c) Enforcement of interim measures by state courts or with the assistance of state courts ...... 319 9. Liability for unjustified measures ...... 320 10. Emergency arbitrator ...... 320 IL Swiss law ...... 323 1. Jurisdiction of the arbitral tribunal to order interim measures ...... 323 2. Jurisdiction of the state courts to order interim measures ...... 324 a) Concurrent jurisdiction ...... 324 b) The risk of conflicts and the prohibition of using parallel jurisdiction in the absence of any change in the circumstances ...... 325 3. Conditions for obtaining interim measures from an arbitral tribunal ...... 325 4. Content of interim measures...... 327 5. Recognition and enforcement of interim measures ordered by arbitral tribunals ...... 328 a) General comments ...... 328 b) Penalties for non-compliance with interim measures ordered by the arbitral tribunal ...... 328 c) State court assistance pursuant to Art. 183(2) SPILA ...... 328 d) Other issues concerning the enforcement of decisions on interim measures ...... 330 aa) Interim measures ordered by an arbitral tribunal ...... 330 bb) Interim measures ordered by state courts ...... 332 6. Emergency arbitrator ...... 333

H. State court support for arbitration proceedings ...... 334 I. Comparative overview ...... 334 IL Swiss law ...... 335

I. Termination of the arbitration proceedings ...... 336 I. Comparative overview ...... 336 II. Swiss law ...... 337

XXVI Chapter 5 Conditions of Admissibility ...... 339

A. Introductory comments ...... 341

B. (Positive) conditions of admissibility ...... 342 I. Valid arbitration agreement ...... 342 IL Legal interest worthy of protection ...... 342 1. Introductory comments ...... 342 2. Comparative overview ...... 342 3. Swiss law ...... 343 III. Arbitrability ratione materiae ...... 345 1. Introductory comments ...... 345 2. Comparative overview ...... 345 3. Swiss law ...... 346 IV. Capacity of the parties to initiate and conduct arbitral proceedings ...... 347 1. Introductory comments ...... 347 2. Comparative overview ...... 349 3. Swiss law ...... 350 a) Different aspects of capacity ...... 350 b) Capacity to initiate and conduct arbitration proceedings ...... 350 V. Proper constitution of the arbitral tribunal ...... 353 1. Comparative overview ...... 353 2. Swiss law ...... 353 VI. Payment of advance on costs ...... 354 1. Introductory comments ...... 354 2. Comparative overview ...... 354 3. Swiss law ...... 355 VII. Meeting of time limits regarding the mandate of arbitrators, cooling-off period and pre-arbitral steps ...... 356 1. Introductory comments ...... 356 2. Comparative overview ...... 357 a) Time limits regarding initiation of arbitration proceedings or the mandate of the arbitral tribunal ...... 357 b) Cooling-off period and pre-arbitral steps...... 358 3. Swiss law ...... 358 a) Time limits regarding initiation of arbitration proceedings ...... 358 b) Cooling-off period and pre-arbitral steps...... 358 c) Time limits regarding mandate of the arbitral tribunal ...... 360

XXVII VIII. Expert determination or pre-arbitral dispute boards as a prerequisite for arbitration ...... 360 1. Comparative overview ...... 360 2. Swiss law ...... 360

C. Negative conditions of admissibility...... 361 I. Res judicata ...... 361 1. Introductory comments ...... 361 2. Comparative overview ...... 362 a) Applicable law ...... 362 b) Recognition (or enforceability) of the prior decision ...... 366 c) Identity of the dispute ...... 367 3. Swiss law ...... 368 a) Introductory comments ...... 368 b) Applicable law ...... 369 c) Types of awards with res judicata effects ...... 370 d) Scope and limits of the effect of res judicata ...... 370 e) Awards rendered in Switzerland ...... 371 f) Prerequisites for the res judicata effect of a foreign or award .. 372 aa) Recognition or enforceability of the prior decision ...... 372 bb) Identity of the dispute ...... 374 g) Conclusion ...... 376 II. Lis pendens ...... 377 1.. Introductory comments ...... 377 2. Comparative overview ...... 378 a) Lis pendens between state courts and arbitral tribunals and vice versa ...... 378 b) Lis pendens between arbitral tribunals ...... 379 c) Lis pendens with regard to interim or provisional measures ...... 380 3. Swiss Law...... 381 a) Overview of the situation in Switzerland ...... 381 b) State court proceedings commenced prior to arbitration ...... 381 c) Arbitration commenced prior to the commencement of another arbitration ...... 384 III. Insolvency of a party ...... 386 1. Introductory comments ...... 386 2. Comparative overview ...... 386 3. Swiss law ...... 387 IV. Anti-arbitration injunctions ...... 389 1. Introductory comments ...... 389

XXVIII 2. Comparative overview ...... 389 3. Swiss law ...... 390

Chapter 6 The Law Applicable to the Merits of the Case ...... 391

A. Choice of law by the parties ...... 393 I. Comparative overview ...... 393 1. Introductory comments ...... 393 2. Application of the conflict of rule of the lex arbitri ...... 393 3. Party autonomy as the most prominent and widely accepted international rule ...... 393 4. Choice of a national law ...... 396 5. Choice of non-national rules of law as governing law ...... 399 6. Timing of the choice of law by the parties ...... 401 7. Limitations on party autonomy regarding choice of law ...... 401 a) “Lois de ” or “lois d'application immediate” ...... 401 b) International public policy ...... 404 II. Swiss law ...... 405 1. Introductory comments ...... 405 2. Party autonomy ...... 405 a) General comments ...... 405 b) Formal validity...... 406 c) Limitations on party autonomy regarding choice of law ...... 408

B. Determination of the applicable law by the arbitrators ...... 413 I. Comparative overview ...... 413 1. Arbitrators choose the conflict of laws rules they deem appropriate ...... 413 2. Specific conflict of laws rule provided for by the lex arbitri itself...... 414 3. “Voie directe” ...... 414 4. National law or non-national rules? ...... 415 II. Swiss law ...... 416 1. Art. 187(1) SPILA ...... 416 2. The closest-connection test ...... 416

C. Proof of the applicable law ...... 418 I. Comparative overview ...... 418 II. Swiss law ...... 418

XXIX D. Arbitration ex aequo et bono and “amiable compositeur” ...... 419 I. Comparative overview ...... 419 1. Arbitration ex aequo et bono ...... 419 2. “Amiable compositeur” ...... 420 II. Swiss law ...... 421

E. Sanctions for violation of the rules regarding the applicable law ...... 421 I. Comparative overview ...... 421 II. Swiss law ...... 422

Chapter 7 The Award ...... 423

A. Types of awards ...... 425 I. Comparative overview ...... 425 1. Introductory comments ...... 425 2. Distinction of preliminary awards and procedural orders ...... 425 3. Types of awards ...... 426 a) Final award ...... 426 b) Partial award ...... 426 c) Preliminary award ...... 427 d) Default award ...... 428 e) Award on agreed terms (consent award) ...... 428 f) Additional award...... 429 II. Swiss law ...... 430 1. Final award ...... 430 2. Partial award ...... 430 3. Preliminary award ...... 431 4. Default award ...... 432 5. Additional award ...... 432

B. Making of an award ...... 433 I. Comparative overview ...... 433 1. The arbitrators’ deliberations ...... 433 a) Introductory comments ...... 433 b) Form of the deliberations ...... 433 c) Confidentiality of the deliberations and voting ...... 434 2. Voting: unanimous or majority decisions ...... 434 3. Failure or refusal of an arbitrator to participate in the deliberations and/or voting...... 434 4. Time limits for the making of an award ...... 435

XXX 5. Dissenting and concurring opinions ...... 436 IL Swiss law ...... 437 1. Party autonomy ...... 437 2. The arbitrators’ deliberations ...... 438 a) Introductory comments ...... 438 b) Form of the deliberations ...... 438 c) Confidentiality of the deliberations and voting ...... 438 3. Voting: unanimous or majority decisions ...... 439 4. Failure or refusal of an arbitrator to participate in the deliberations and/or voting...... 439 5. Time limit for rendering the award ...... 440 6. Dissenting opinions ...... 440 7. Deposit of the award andcertification by the arbitral tribunal ...... 441

C. Form, content and notification of the award ...... 442 I. Comparative overview ...... 442 1. Written form requirement ...... 442 2. Typical elements of the award ...... 442 a) Introductory comments ...... 442 b) Signature ...... 443 c) Place and date ...... 443 d) Reasoning ...... 444 e) Costs ...... 444 f) Operative Part ...... 446 3. Notification of the award ...... 447 II. Swiss law ...... 447 1. Written form requirement ...... 447 2. Typical elements of the award ...... 448 a) Signature ...... 448 b) Date of the award ...... 449 c) Reasoning ...... 449 d) Costs ...... 451 e) Operative (or “Dispositive”) Part...... 452 3. Notification of the award ...... 452

D. Correction and interpretation of the award and rendering of an additional award 453 I. Comparative overview ...... 453 1. Introductory comments ...... 453 2. Correction ...... 453 3. Interpretation ...... 454 4. Additional awards ...... 455

XXXI II. Swiss law ...... 455 1. Introductory comments ...... 455 2. Correction and interpretation ...... 456 3. Additional awards ...... 457

E. Confidentiality and publication of awards ...... 457 I. Comparative overview ...... 457 II. Swiss law ...... 459

F. Challenging an award ...... 459 I. Comparative overview ...... 459 1. Introductory comments ...... 459 2. Jurisdiction of the state court at the seat of arbitration ...... 460 3. Time limits ...... 460 4. Decisions which can be challenged ...... 461 5. Grounds for challenge ...... 461 6. Effects of a successful challenge ...... 462 7. Exclusion and waiver of the right to challenge ...... 463 a) Exclusion ...... 463 b) Waiver ...... 465 8. Appeal against the award before a second instance arbitral tribunal ...... 466 II. Swiss law ...... 467 1. Jurisdiction of the Swiss Supreme Court ...... 467 2. Time limit ...... 468 3. General requirements of an application tochallenge ...... 470 4. Effect of challenge on enforceability ...... 473 5. Decisions that can be challenged ...... 474 6. Procedure before the Swiss Supreme Court ...... 477 7. Effects of a challenge ...... 479 a) Successful challenge ...... 479 b) Unsuccessful challenge ...... 481 8. Grounds for challenge pursuant to Art. 190(2) SPILA...... 482 a) Introductory comments ...... 482 b) Irregular constitution of the arbitral tribunal (Art. 190(2)(a) SPILA) .... 484 c) Wrong ruling on jurisdiction (Art. 190(2)(b) SPILA) ...... 487 d) Ultra, infra or extra petita (Art. 190(2)(c) SPILA) ...... 488 e) Violation of right to be heard and equal treatment (Art. 190(2) (d) SPILA) 490 aa) Right to be heard ...... 490 bb) Right to equal treatment ...... 497 f) Violation of public policy (Art. 190(2)(e) SPILA) ...... 498 aa) Substantive public policy ...... 499

XXXII bb) Procedural public policy ...... 504 9. Likelihood of success ...... 505 10. Exclusion of the right to challenge pursuant to Art. 192 SPILA ...... 506 a) Introductory comments ...... 506 b) Requirements of a valid exclusion ...... 507 c) Effects of a valid exclusion ...... 509

G. Revision of the award ...... 511 I. Comparative overview ...... 511 IL Swiss law ...... 512 1. Grounds for revision ...... 512 2. Jurisdiction of the Swiss Supreme Court ...... 516 3. Revisable decisions ...... 516 4. Time limits ...... 516 5. General requirements for an application for revision ...... 518 6. Consequences of a successful revision ...... 519 7. Exclusion of the right to request a revision ...... 519

Chapter 8 Recognition and Enforcement of Arbitral Awards ...... 521 A. Introduction ...... 523

B. The New York Convention of 1958 ...... 525 I. Scope of application of the New York Convention ...... 525 1. Existence of an “arbitral award” ...... 525 2. Existence of a “foreign” or “non-domestic” arbitral award ...... 528 3. Existence of an arbitral award “arising out of differences between persons, whether physical or legal”...... 530 II. Formal requirements ...... 531 III. Grounds for refusing recognition and enforcement under the New York Convention ...... 533 1. Introductory comments ...... 533 2. Grounds which must be invoked by a party...... 535 a) Art. V(l)(a) New York Convention: incapacity and invalidity of the arbitration agreement ...... 535 aa) Incapacity of a party to the arbitration agreement ...... 535 bb) Formal and substantive invalidity ...... 536 cc) Subject matter arbitrability ...... 538 b) Art. V(l)(b) New York Convention: violation of due process ...... 539 c) Art. V(l)(c) New York Convention: award dealing with a difference not contemplated or not falling within the scope of the arbitration agreement 542

XXXIII d) Art. V(l)(d) New York Convention: arbitral tribunal not properly consti­ tuted or arbitral procedure not in accordance with the arbitration agreement ...... 543 e) Art. V(l)(e) New York Convention: award not yet binding, set aside or suspended ...... 545 3. Grounds which the state court considers on its own motion ...... 550 a) Introductory comments ...... 550 b) Art. V(2)(a) New York Convention: lack of subject matter arbitrability .. 550 c) Art. V(2)(b) New York Convention: violation of publicpolicy ...... 551

C. Recognition and enforcement of arbitral awards in Switzerland ...... 552 I. Introductory comments ...... 552 1. Foreign awards ...... 553 2. Swiss awards ...... 554 IL Recognition and enforcement of foreign arbitral awards ...... 555 1. Application of New York Convention ...... 555 2. Particularities of Swiss law and Swiss ...... 555 a) Art. 1(2) New York Convention: existence of arbitral award ...... 555 b) Art. V(l)(a) and Art. II New York Convention: valid arbitration agreement 556 c) Art. V(l)(b) New York Convention: violation of due process ...... 557 d) Art. V(l)(d) New York Convention: arbitral tribunal not properly consti­ tuted or arbitral procedure not in accordance with the arbitration agreement...... 558 e) Art. V(l)(e) New York Convention: arbitral award not yet binding, set aside or suspended ...... 559 f) Further conditions necessary for the recognition of a foreign arbitral award ...... 560 g) Art. V(2)(a) New York Convention: lack of subject matter arbitrability .. 562 h) Art. V(2)(b) New York Convention: violation of public policy ...... 562 3. Discrepancies between the grounds for setting aside under the SPILA and the grounds for refusal of recognition under the New York Convention ...... 564 4. Formal requirements ...... 565 5. Enforcement ...... 566 a) Enforcement of foreign monetary arbitral awards ...... 566 b) Enforcement of foreign non-monetary arbitral awards in Switzerland .. 570 III. Recognition and enforcement of Swiss arbitral awards ...... 570 1. Certificate of enforceability ...... 570 2. Monetary arbitral awards ...... 572 3. Non-monetary arbitral awards ...... 573

XXXIV Chapter 9 Treaty-based Investment Arbitration ...... 575 A. Introduction ...... 577 I. General purpose of investment treaties ...... 577 II. Definition and main characteristics ...... 577

B. Background, development and particularities ...... 579 I. Good offices, diplomatic protection and international disputes ...... 579 II. Investment treaties ...... 579 III. Arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) ...... 580 IV. Influence of ...... 581 V. Intra- investment treaty arbitration ...... 582 1. Context ...... 582 2. The Achmea Judgment ...... 583 3. The consequences of Achmea for intra-EU arbitrations seated in the EU ... 584

C. Arbitration clause and jurisdiction ...... 586 I. Definition, purpose and form ...... 586 II. Validity, form and standard of interpretation and sources of 587 III. Consent to refer the dispute to arbitration (essentialia negotii 1) ...... 589 IV. Designation of the legal relationship (essentialia negotii 2) ...... 590 1. Treaty breaches by the host state ...... 590 2. Disputes in connection with investments ...... 590 3. Standards of protection ...... 592 4. Disputes under an umbrella clause ...... 593 V. Additional requirements for an arbitral tribunal’s jurisdiction ...... 594 VI. Subject matter covered by the parties’ consent ...... 594 VII. The constitution of the arbitral tribunal ...... 595 1. Introductory comments ...... 595 2. In ICSID arbitration ...... 595 VIII. Designation of the seat ...... 596

D. Arbitral procedure ...... 597 I. Introductory comments ...... 597 II. Confidentiality and transparency ...... 598 1. Basic principles ...... 598 2. Access to information...... 598 III. Third-party submissions ...... 599

E. Applicable law ...... 600 I. Introductory comments ...... 600

XXXV IL Choice of law by the parties ...... 600 III. Choice of law in the absence of the parties’ agreement ...... 600

F. The arbitral award ...... 601 I. Annulment of the award ...... 601 II. Recognition and enforcement of investment awards ...... 602

G. Treaty-based investment arbitration and Switzerland ...... 603 1. Legal framework ...... 604 2. Review of the main decisions rendered by the Swiss Supreme Court in investment treaty arbitrations ...... 605 a) Only one award partially set aside in twenty years ...... 605 b) Conditions for a valid waiver of the right to seek annulment of an award (Art. 192(1) SPILA) ...... 606 c) Jurisdiction (Art. 190(2) (b) SPILA) ...... 607 d) Equal treatment and right to be heard (Art. 190(2)(d) SPILA) ...... 609 e) Public policy (Art. 190(2) (e) SPILA) ...... 610 3. Effects of Achmea on intra-EU BIT arbitrations seated in Switzerland ...... 611

Chapter 10 Sports Arbitration ...... 613 A. Introduction ...... 615 I. Characteristics ...... 615 II. Background ...... 615 III. The importance of Switzerland in sports arbitration ...... 616 IV. The role of the EU and the case law of the European Court of in the development of sports law ...... 617 V. Sports-related disputes ...... 619 VI. Arbitration in sport ...... 620 1. Sport dispute resolution organizations ...... 620 2. Internal dispute resolution of sport organizations ...... 621 a) The need for internal mechanisms ...... 621 b) Special internal dispute mechanisms ...... 623

B. The Court of Arbitration for Sport ...... 623 I. Background ...... 623 II. Organization ...... 625 III. CAS sports case law ...... 627 IV. The CAS Code and the CAS ADD Rules ...... 627 1. Overview of the CAS Code ...... 627 2. Overview of the CAS ADD Rules ...... 630 3. Agreement to arbitrate ...... 631

XXXVI a) Application of the CAS Code and the CAS ADD Rules ...... 631 b) Consent ...... 632 c) Separability ...... 634 d) Competence-competence ...... 634 4. Arbitral tribunal ...... 634 a) Seat ...... 634 b) Constitution ...... 635 aa) Formation of the Panel ...... 635 bb) Challenge ...... 637 c) Impartiality and independence ...... 637 5. Arbitral procedure ...... 639 a) Ordinary arbitration ...... 639 b) CAS Anti-Doping Division arbitration ...... 640 aa) Direct reference to the CAS Anti-Doping Division ...... 640 bb) Commencing the arbitration ...... 641 cc) Procedure before the panel ...... 641 dd) Award ...... 641 c) Appeals arbitration...... 642 aa) Direct reference to the CAS ...... 642 bb) Appeal against a decision or award ...... 642 cc) Exhaustion of internal remedies ...... 643 dd) Statement of appeal ...... 643 ee) Time limits ...... 644 ff) Other procedural issues ...... 644 d) Standing in CAS appeals ...... 645 e) Scope of review ...... 646 f) Hearings ...... 646 6. Costs ...... 647 7. Law applicable to the merits ...... 648 a) Choice of applicable law ...... 648 b) Evidence ...... 648 8. The arbitral award ...... 649 V. Setting aside ...... 650 1. Admissibility...... 650 2. Grounds for setting aside an award ...... 654 a) Improper constitution ...... 654 b) Wrong acceptance or denial of jurisdiction ...... 654 c) Decision beyond claims submitted or failure to decide ...... 655 d) Violation of equal treatment/right to be heard ...... 655 aa) Equal treatment ...... 655 bb) Right to be heard ...... 656

XXXVII e) Public policy ...... 657 3. Revision ...... 660 VI. Enforcement ...... 660

Table of Cases ...... 663 Swiss Supreme Court Decisions ...... 663 Arbitral Awards ...... 685 Court Decisions ...... 695

Index ...... 703

XXXVIII