1. Swiss Case Law Series: Deviations from the agreed procedural rules: A Non-issue? The Swiss perspective
ASA below 40 / ICDR Y & I Seminar
15 September 2017
Silvia Iseli-Haffner

2. 4A_405/2016 – Facts
In arbitration proceedings under the Swiss Rules Sole Arbitrator issues Provisional Timetable with agreement of parties
SoC is not submitted within time-limit according to Provisional Timetable, i.e. by 15 February 2016
Sole Arbitrator requests Claimant on 16 February 2016 to file SoC the same day; SoC is filed on 16 February 2016
Respondent requests Sole Arbitrator to terminate the arbitration proceedings with regard to Claimant’s claim based on Art. 28(1) Swiss Rules
Sole Arbitrator rejects Respondent’s request stating that Claimant had been granted an extension of the time-limit to file SoC
Respondent requests Swiss Supreme Court to set aside Final Award due to violation of due process (Art. 190(2) lit. d + e PILA)
ASA below 40 Seminar — 15 September 2017

3. 4A_405/2016
Art. 28 Swiss Rules 1. If, within the period of time set by the arbitral tribunal, the Claimant has failed to communicate its claim without showing sufficient cause for such failure, the arbitral tribunal shall issue an order for the termination of the arbitral proceedings (…). Art. 190 PILA 2 The award may only be challenged: (…) d. if the principle of equal treatment of the parties or the right of the parties to be heard was violated; e. if the award is incompatible with public policy (ordre public).
ASA below 40 Seminar — 15 September 2017

4. 4A_405/2016 - The Supreme Court’s considerations
No violation of principle of equal treatment of Parties Respondent did not argue that its SoD had also been belated but was not considered by the Sole Arbitrator
see also 4A_636/2014 consid. 4, 4A_468/2007 consid. 7.1, 4A_539/ consid
No violation of right to be heard Respondent did not argue that it had not been able to comment on SoC
“The mere fact that a procedural rule [Article 28(1) Swiss Rules] is agreed by the parties and binding on the arbitral tribunal does not make this rule a mandatory procedural principle according to Article 190(2) lit. d PILA”
see also DFT 117 II 346 consid. 1b)aa), DFT 134 III 186 consid. 6.2
ASA below 40 Seminar — 15 September 2017

5. 4A_405/2016 - The Supreme Court’s considerations
No violation of procedural ordre public
“A wrong, or even arbitrary application of procedural rules alone is not considered a violation of the procedural ordre public according to Article 190(2) lit. e PILA”
see also DFT 129 III 445 consid , DFT 126 III 249 consid. 3b, 4A_636/2014 consid. 4.2, 4P.23/2006 consid. 4.2
ASA below 40 Seminar — 15 September 2017

6. Deviations from the agreed procedural rules: A Non-issue…
Conclusion
Deviations from the agreed procedural rules are a “Non-issue” unless they amount to a violation of the parties’ right to be heard, the principle of equality of the parties or the procedural ordre public
Principle of finality of award / discretion of Arbitral Tribunal
see also DFT 130 III 125, DFT 134 III 186 [no violation of due process if Award states no reasons (vs. Art. 32(3) Swiss Rules)] and DFT 117 II 346 [no violation of due process if no oral hearing is held]
ASA below 40 Seminar — 15 September 2017

7. A Non-issue…?
What if…
… the Arbitral Tribunal deviates from a rule that other party has already complied with?
see 4A_468/2007 consid. 7.1: The principle of equality of the parties is not violated even if other party has complied with the time-limits and, hence, had less time to prepare its submission
… SoC is belated for more than one day?
… the proceedings are conducted as expedited proceedings under the revised ICC Rules?
… the Arbitrator does not "lack procedural strictness"?
ASA below 40 Seminar — 15 September 2017

8. When to show procedural leniency? (How) to avoid procedural leniency?
Discretion of the Arbitral Tribunal: Procedural strictness versus procedural leniency
If Arbitral Tribunal disregards evidence request that is not made in accordance with the agreed procedural rules/deadlines it does not violate due process (4A_274/2013; see also DFT 126 III 249)
The Arbitral Tribunal enjoys discretion to show procedural leniency
When to show procedural leniency?
(How) to avoid procedural leniency?
(How) to sanction procedural leniency?
ASA below 40 Seminar — 15 September 2017

9. ...or a No-go? Enforceability
Art. 190(2) lit. d PILA versus Article V(1)(d) New York Convention:
DFT 108 Ib 85 consid. 4b: It follows from Article V(1)(d) NY Convention that the arbitral proceedings are primarily governed by the agreement of the parties -> priority of party autonomy
ASA below 40 Seminar — 15 September 2017

10. Silvia Iseli-Haffner Wartmann & Merker Kirchgasse 48 8024 Zürich
Wartmann & Merker
Kirchgasse 48
8024 Zürich