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Swiss Supreme Court sets aside domestic arbitral award on grounds of arbitrariness

29 October 2014

Authors: Nathalie Voser, Benjamin Moss

In a German-language decision dated 23 July 2014 but only recently published, the Swiss Supreme Court accepted an application to have a domestic arbitral award set aside on grounds of arbitrariness. It specifically found that the sole arbitrator, in awarding interest on damages, had grossly misapplied Swiss legal provisions on default interest by opting to grant interest for periods of time during which the relevant amounts had not yet become due.
As the Swiss Private International Law Act (PILA) permits parties to an international arbitration to "opt-out" and proceed in accordance with the CCP, which governs domestic arbitration, the availability of the "arbitrariness" challenge in domestic arbitration should be on the mind of any party that is considering opting out of or into the PILA and may even be a reason in itself for doing so. (Decision 4A_117/2014.)

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Published in Practical Law Arbitration


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