Swiss Rules of International Arbitration Expedited Procedure Emergency Relief Awards and Costs Prague 5 October 2012 Dr Philipp Habegger LLM Walder Wyss AG Member ID: 213020
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Slide1
Workshop
Swiss Rules
of
International Arbitration
Expedited
Procedure
, Emergency Relief, Awards
and
Costs
Prague
, 5
October
2012
Dr. Philipp Habegger
LL.M., Walder Wyss AG
Member
of
the
Arbitration Court
of
the
Swiss Chambers’ Arbitration InstitutionSlide2
1.
Expedited
Procedure
(I)
Applicable if:
Parties so agree (
Art. 42(1)
)
Aggregate of claim, counterclaim (or any set-off defence) does not exceed CHF
1 Mio.
[and Court does not decide otherwise taking into account all relevant circumstances] (
Art. 42(2
)
)Slide3
1.
Expedited
Procedure
(II)
Very
popular due to cost efficiency and speed:
33% of all cases in 2011, 45% in 2010, 30% in 2009
Award to be made within six months from the date of transmission of file to arbitral tribunal [usually a sole arbitrator under the regime of Art. 42(2); cf.
Art. 42(2)(b) and (c)
]Slide4
2
. Emergency Relief (I)
Art
. 43
: availability of interim measures that cannot wait until the arbitral tribunal has been constituted:
Available even before Notice of Arbitration is filed (
Art. 43(1)
)
Parallel competence with state courts (
Art. 43(1)
in conjunction with
Art. 26(5
)
)Slide5
2
. Emergency Relief (II)
General
transitional rule of
Art. 1(3)
applies: applicable to proceedings in which Notice of Arbitration is submitted on or after 1 June 2012, unless the parties have agreed otherwise -> jurisdictional issue to be decided by the emergency
arbitrator
(>< ICC Rules)Slide6
2
. Emergency Relief (III)
Application for emergency relief to include:
Particulars of
Arts. 3(3)(b) to (e)
;
Advisable: when referring to arbitration agreement address jurisdiction and applicability of Art. 43;
Statement of interim measure(s) sought and reasons therefor, in particular the reason for the purported urgency
;Slide7
2
. Emergency Relief (IV)
Application for emergency relief to include:
Comments
on language, seat of arbitration (even if agreed between parties ><
Art. 3(3)(g)
only if not previously agreed);
Comments on applicable law (><
Art. 3(3)(g)
not needed);
Confirmation of payment of Registration Fee of CHF 4,500 and Deposit of CHF 20,000 (
Appendix B Section 1.6
). Slide8
2
. Emergency Relief (V)
If
Notice of Arbitration not yet pending -> to be filed at latest within 10 days after filing of application (
Art. 43(3)
) -> otherwise termination of proceedings (any decision on application already rendered ceases to be binding;
Art. 43(10)
)Slide9
2
. Emergency Relief (VI)
Art. 43(2)
:
Court
to appoint sole emergency arbitrator
“as soon as possible after receipt of the Application”,
unless:
Manifestly no agreement to arbitrate under Swiss Rules (=
Art. 3(12
); test to be stricter (?)); or
More appropriate to proceed with constitution of tribunal and refer application to it (cf.
Art. 2(3)
for acceleration of constitution
).Slide10
2
. Emergency Relief (VII)
Art
. 43(4)
:
Arts. 9 to 12
apply to challenge of emergency arbitrator, but time-limits reduced from fifteen to three days
. If challenge successful: decision stands (
>< ICC
) -> may be modified by tribunal or replacement emergency arbitrator
Art. 43(5)
: Absent agreement by the parties, Court to fix seat of emergency relief proceedings without prejudice to later
determination of seat of arbitration (
Art. 16
).Slide11
2
. Emergency Relief (VIII)
Art. 43(6)
:
wide
discretion
for
conduct of proceedings.
Proceedings should reflect inherent urgency;
Each party to be granted “
reasonable opportunity to be heard on the Application”
;
Neither formal in person hearing, nor full exchange of submissions necessarily required
;Slide12
2
. Emergency Relief (IX)
Decision
to be rendered within fifteen days from the date file was transmitted to emergency arbitrator (
Art. 43(7)
; file will only be transmitted once Registration Fee and Deposit are paid,
Appendix B Section 1.6
). Extensions for rendering of decision may be agreed by the parties or granted by the Court.Slide13
2
. Emergency Relief (X)
Art. 43(8) and (9)
:
Decision
has same effects as a decision pursuant to
Art. 26
, i.e.,
Decision on application may be in form of an award (
>< ICC
);
Emergency arbitrator may issue preliminary orders (
>< ICC and others
);
Decision, if necessary, should rule on emergency arbitrator’s jurisdiction
;Slide14
2
. Emergency Relief (XI)
Art. 43(8) and (9)
:
Decision
has same effects as a decision pursuant to
Art. 26
, i.e.,
Reasons
may be stated in summary form (
Art. 42(1)(e) by analogy
);
Decision is binding on parties (
Art. 15(7)
), but not on subsequent tribunal, which may modify, suspend or terminate it (
Art. 43(8
)
);Slide15
2
. Emergency Relief (XII)
Decision
to determine fees, costs and expenses of emergency arbitrator subject to approval by the Court (
Art. 43(9)
), but not other cost items -> other cost items will be determined later by arbitral tribunal. If later no tribunal constituted -> separate cost award by emergency arbitrator (
>< ICC
) -> enforceability.Slide16
3
. Awards (I):
Few
Changes
Former Art
. 32(2):
duty
of
parties
to
comply
with
award
->
now
Art. 15(7)
Art. 35(1), 36(1), 37(1)
:
Clarification
:
requests
for
correction
,
interpretation
or
additional
award
to
be
addressed
to
Secretariat
.
Art. 35(2
),
37(2)
:
extensions
of
time
for
interpretation
or
additional
award
to
be
granted
by
Court (
only
)Slide17
3
. Awards (II):
what
did
not
change
Art.
31(1)
:
if
no
majority
,
president
may
make
award
alone
Art.
32(1)
:
tribunal
may
make
final,
interim
,
interlocutory
,
or
partial
awards
and
may
award
costs
in
awards
that
are
not final.
Art.
32(1)
:
obligation
to
state
reasons
,
unless
parties
agree
that
no
reasons
are
to
be
givenSlide18
4
. Determination
of
C
osts
(I)
Art. 38
:
„
the
arbitral
tribunal
shall
determine
the
costs
of
arbitration
in
its
award
“
->
„The
award
shall
contain
a
determination
of
the
costs
of
the
arbitration
“
.
Art. 32(1), 40(3), 40(5)
:
Cost
determinations
may
be
made
in final
award
,
award
by
consent
,
termination
order
,
interim
or
partial
awards
. Also in
decisions
on
correction
or
interpretation
of
awards
or
additional
awards
.
Art. 38(a)
:
Determination
of
arbitrator’s
fees
and
expenses
by
arbitral
tribunal
(
Art
.
38(
b+c
)
).Slide19
4
. Determination
of
Costs
(II)
Appendix B
Section
5
:
if
arbitrator
fees
subject
to
VAT
or
other
fiscal
charge
,
parties
have
a
duty
to
pay
such
taxes
or
charges
Art. 41(1)
:
may
tribunal
request
deposit
in
the
amount
of
VAT
likely
to
become
payable
?Slide20
4
. Determination
of
Costs
(III)
Art. 38(a), 38(b)
:
new
[
expressly
states
]:
fees
of
secretary
of
tribunal
falls
under
Art
. 38(a)
->
if
added
to
fees
of
arbitrators
still
to
be
within
range
of
scale
of
Appendix
B
Section
6
->
expression
of
principle
that
total
of
fees
shall
not
be
higher
if
secretary
assists
the
tribunal
.
Costs
of
secretary
may
not
be
qualified
as
„
cost
of
other
assistance
required
by
the
arbitral
tribunal
“
according
to
Art
. 38(c)
!Slide21
4
. Determination
of
Costs
(IV)
Art. 39(1):
both
fees
and
(
new
)
expenses
of
arbitrators
must
be
reasonable
Art. 39(2):
fees
are
to
be
determined
in
accordance
with
Appendix B
. The
scale
for
fees
and
administrative
costs
has
remained
unchanged
compared
to
the
Swiss Rules 2004.Slide22
5
.
Cost
C
ontrol
(I)
Swiss Rules 2004:
mere
consultation
of
the
Chambers
by
the
tribunal
regarding
costs
(
only
amendment
to
Art
. 40 UNCITRAL 1976
).
Costs
only
subject
to
approval
if
amounts
in
scale
exceeded
Art. 41(3)
and
41(4) UNCITRAL 2010
provide
right
to
parties
to
have
fee
proposal
and
cost
determination
by
tribunal
checked
,
approved
,
and
–
if
need
be
–
adjusted
by
‚
appointing
authority
‘
->
increased
cost
control
in ad-hoc
proceedingsSlide23
5
.
Cost
Control
(II)
Art. 40(4)
:
new
: Not
only
awards
, but
as
well
termination
orders
and
decisions
re
correction
,
interpretation
and
additional
awards
must
be
submitted
to
Court
regarding
the
cost
decision
New
: in all
instances
(not
only
if
amounts
in
scale
of
Apppendix
B
exceeded
)
submitted
for
approval
(not
mere
consultation
)
with
competence
of
Court
to
adjustSlide24
5
.
Cost
Control
(III)
Art. 40(4):
„
Any
such
approval
or
adjustment
by
the
Swiss Chambers‘ Court
shall
be
binding
upon
the
arbitral
tribunal
“
Court
approves
or
adjusts
;
and
fixes administrative
costs
(
Appendix B
Section
2.2, Art. 38(f
)
).
No
administrative
costs
if
amount
in
dispute
below
CHF 2 Mio.
No
cost
control
regarding
:
Costs
items
in
Art
. 38(d)
to
38(e
)
(e.g.
witness
and
legal
costs
)
Costs
for
Emergency
Arbitrator
(
prior
approval
/
adjustment
pursuant
to
Art
. 43(9)
) ->
no
review
de
novo
Allocation
of
costs
between
the
partiesSlide25
5
.
Cost
Control
(IV)
Art. 40(4):
approval
or
adjustment
binding
on
arbitral
tribunal
Issue
of
Federal Supreme Court
decision
136
III
597
, 602
cons
.
5.2
not
resolved
! I.e., not
binding
on
and
enforceable
against
parties
.
Still
responsibility
of
tribunals
to
timely
request
deposits
pursuant
to
Art
. 41(1)
and
to
check
that
they
are
paid
Slide26
5
.
Cost
Control
(V)
Appendix B
Section
4
(‘
Guidelines
for
the
accounting
of
expenses
’)
available
on www.swissarbitration.org.
Core
issues
:
Per
diem
allowances
for
days
spent
away
from
place
of
business
Threshold
amounts
for
advances
on
fees
and
expenses
No
advances
on
fees
and
expenses
in
Expedited
Proceedings
and
Emergency Relief
proceedings
Striking
balance
between
adequate
control
and
efficiency
/‘
lean
administration
‘/
avoiding
delay
in
issuing
awardsSlide27
6
.
Deposit
of
C
osts
(I)
Art. 41(4):
new
:
time-limit
for
payment
of
deposits
reduced
to
15
days
->
tribunals
may
suspend
/
terminate
proceedings
sooner
Art
. 41(1)
and
41(3)
:
duty
to
consult
Court
for
deposits
(
approval
if
amounts
in
Appendix
B
Section
6
exceeded
)Slide28
6
.
Deposit
of
C
osts
(II)
Art
. 42(1)(a)
and
App. B
Section
1.4 /1.5 [Art. 5(5)]
:
Provisional
Deposit
of
CHF
5‘000
in
Expedited
Procedures
. Transfer
of
file
subject
to
payment
. Payment
considered
partial
payment
of
deposit
fixed
by
tribunal
(
Art. 41(1)
).
To cover
initial efforts of
sole arbitrator,
such as:
Preparation of provisional timetable in consultation with parties (
Art. 15(3)
);
Issuing of initial procedural directions (
Art. 15(1)
);
determination
of language(s) of proceedings (
Art. 17(1)
: “
promptly after its appointment
”
)Slide29
6
.
Deposit
of
Costs
(III)
Art. 43(1)(c)
and
(2):
deposit
for
Emergency
Arbitrator
in
the
amount
of
maximum
fees
(
CHF
20‘000)
Appendix B
Section
4.2
:
advances
on
fees
for
arbitrators
if
substantial
steps
/
mile-stones
in
proceedings
are
achieved
.
Subject
to
approval
by
Court
->
Guidelines
on
ExpensesSlide30
THANK YOU FOR YOUR ATTENTION
!
Dr. Philipp
Habegger
LL.M.
philipp.habegger@walderwyss.com