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What makes a (domestic) arbitral award "arbitrary" in Switzerland

05 March 2014

Authors: Nathalie Voser, James Menz, Angelina M. Petti and Jörn Eschment

In three recent decisions (decisions 4A_214/2013, 4A_50/2013 and 4A_398/2013), the Swiss Supreme Court added important contours to a ground for challenging an award that is only available in Swiss domestic arbitrations. As the disputes were domestic, the challenges arose under the Swiss Code of Civil Procedure (CCP), rather than under chapter 12 of the Swiss Private International Law Act (PILA). However, the cases are also important for international practitioners, because parties to international arbitrations may opt for the domestic framework, and because these cases add to the jurisprudence on the right to be heard, which is a ground for challenge in international arbitrations.
The grounds for attacking a domestic arbitral award under the CCP are largely comparable with, but slightly broader than, those under the PILA. One of the main differences is that under the CCP awards that are "arbitrary in their result" may be challenged. Arbitrariness may result from manifestly erroneous findings of fact or from a manifest violation of the law or equity. Decision 4A_214/2013 primarily considers the manifest violation of the law aspect, whereas in decisions 4A_50/2013 and 4A_398/2013, the challenges were principally based on alleged manifestly erroneous findings of fact.

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Published in Practical Law Arbitration


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