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Presentation on theme: " Workshop Swiss Rules of International Arbitration Expedited Procedure, Emergency Relief, Awards and Costs Prague, 5 October 2012."— Presentation transcript:

1 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 Institution

2 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))

3 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)]

4 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))

5 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)

6 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;

7 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).

8 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))

9 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).

10 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 (> 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 ).

11 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;

12 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.

13 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;

14 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));

15 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 (> enforceability.

16 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)

17 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 given

18 4. Determination of Costs (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)).

19 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?

20 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)!

21 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.

22 5. Cost Control (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 proceedings

23 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 adjust

24 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 parties

25 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

26 5. Cost Control (V)  Appendix B Section 4 (‘Guidelines for the accounting of expenses’) available on  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 awards

27 6. Deposit of Costs (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)

28 6. Deposit of Costs (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”)

29 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 Expenses

30 THANK YOU FOR YOUR ATTENTION ! Dr. Philipp Habegger LL.M.

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