In Switzerland, international arbitration is governed by the provisions of Chapter 12 of the Swiss Private International Law Act (“PILS”) whereas domestic arbitration is governed by the Concordat which will be replaced, as from 1 January 2011, by Part 3 of the Swiss Code on Civil Procedure (“CCP”). The distinctive criterion is whether, at the time when the arbitration agreement was entered into, at least one of the parties had his/her domicile or his/her habitual residence or - in the case of a corporate party - its seat outside Switzerland (art. 176.1 PILS). Accordingly, an arbitration agreement between three parties (A in a foreign country, B and C in Switzerland) will, at first sight, be qualified as international. However, should exclusively B and C be the parties to the actual arbitral proceedings, the arbitration must be deemed as domestic according to a decision rendered by the Swiss Federal Tribunal in 2002. Therefore, the qualification may remain uncertain until the parties to the actual proceedings are known. Since the CCP (art. 353.2), in contrast to the Concordat, grants the parties the possibility to submit domestic arbitration to Chapter 12 of the PILA, such uncertainty may be avoided by the parties’ explicit declaration to exclude the application of Part 3 of the CCP-CH and to agree on the application of Chapter 12 of the PILS.
ASA Bulletin