Enter to open, tab to navigate, enter to select
Swiss law on arbitrator's competence to decide jurisdiction amended from 1 March 2007
Practical Law Legal Update 6-225-4006 (Approx. 3 pages)
Swiss law on arbitrator's competence to decide jurisdiction amended from 1 March 2007
by PLC Dispute Resolution
| Published on 28 Feb 2007 • International, Switzerland |
An arbitral tribunal is deemed to have an inherent power to rule on its own jurisdiction (kompetenz-kompetenz). This power is set out in many of the procedural rules (including ICC, LCIA and UNCITRAL) and in certain national arbitration laws. However, in Switzerland, the position was that:
- The tribunal had power to rule on its own jurisdiction under article 186 of the Swiss Private International Law Act 1987 (PILA), which recognises the concept of competence-competence.
- However (following the 2001 "Fomento" case in the Swiss Supreme Court), an arbitral tribunal was obliged to stay any proceedings under the same criteria as a Swiss court would have to apply under article 9 of the PILA. Under that provision, when an action having the same subject matter is already pending between the same parties in a foreign country, the Swiss court must stay the proceedings subject to certain other criteria.
The amendment of Article 186 of the PILA, which takes effect from 1 March 2007, will insert additional wording which provides that a tribunal shall decide on its jurisdiction notwithstanding that an action on the same matter is already pending before a state court or another arbitral tribunal, unless there are serious reasons to stay the proceedings. This amendment (which effectively overrules the "Fomento" principle) has been welcomed by commentators and practitioners. It will provide greater certainty to parties choosing to arbitrate their disputes in Switzerland that the tribunal will be able to decide on its own jurisdiction, even where related court proceedings are already on foot.