Swiss Chambers’ Arbitration Institution: a better way to settle business disputes
Geneva has long held a place in the world’s imagination as a city where the hard work of resolving differences peacefully takes place. The Geneva Conventions, treaties negotiated in 1949 to codify treatment of noncombatants in wartime, were ratified by 196 countries and are referenced to this day during armed conflicts.
Therefore, it comes as no surprise that Geneva is where the Swiss Chambers’ Arbitration Institution (SCAI) is located. It is one of the premier forums for arbitrating business disputes and can be accessed by businesses from any country in the world. There are many advantages to choosing to settle disputes through arbitration. It is often quicker and cheaper than litigating a dispute in court. The primary costs are lawyers’ fees, document production and other internal costs of the participants, which can be controlled to a large degree by those participants. In fact, disputes involving amounts of less than one million Swiss francs are subject to mandatory expedited proceedings, which can keep costs down. The parties may also choose expedited proceedings for disputes over $1 million Swiss francs.
The SCAI rules for arbitration were developed by arbitration experts to reflect modern practice and the most up-to-date laws. The first arbitration rules were articulated in 1911, and the current rules were revised in 2012. The SCAI process is open-ended to suit the objectives of the parties involved. The parties in dispute have free choice of arbitrators, law, language, seat, hearing place and counsel. While they can hold the arbitration anywhere in the world, if they hold it in Switzerland they will use the modern and efficient Swiss arbitration law, as well as having access to counsel with experience in the arbitration process
It is the practice of many businesses to include a clause requiring arbitration for business disputes in a contract. This means the parties are required to try to arbitrate the dispute without recourse to other means of resolution like litigation. If a contract does not include such language, the parties can still partake of the arbitration as long as both parties consent to it.
Model arbitration clause:
Any dispute, controversy or claim arising out of, or in relation to, this contract, including the validity, invalidity, breach, or termination thereof, shall be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers’ Arbitration Institution in force on the date on which the Notice of Arbitration is submitted in accordance with these Rules.
The number of arbitrators shall be … (“one”,” three”, “one or three”);
The seat of the arbitration shall be … (name of city in Switzerland, unless the parties agree on a city in another country);
The arbitral proceedings shall be conducted in … (insert desired language).
During proceedings, the arbitrator(s) hear the evidence and determine the admissibility, relevance materiality and weight of the evidence presented. The arbitrators may also require the parties produce further evidence and documents if the evidence presented is deemed insufficient to render a decision. The final arbitration award is communicated to the parties involved in writing and is final and binding on all parties. The arbitrator(s) shall state the reasons for the award, unless the parties in the dispute agreed that no reasons need be given.
Counsel’s knowledge and experience of the SCAI process can be formative in a successful outcome for a given party. It is therefore desirable to hire counsel with deep working knowledge of the SCAI rules and processes. SCAI is ingrained in Swiss business practice and finding Swiss counsel can be the first step to winning an arbitration.