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Frist ver­passt,
Com­men­tary by Simon Gabriel on Swiss Fed­er­al Tri­bunal deci­sion 4A_405/2016 on March 2, 2017

In Swiss Rules arbi­tra­tion pro­ceed­ings, Claimant failed to sub­mit the state­ment of claim with­in the applic­a­ble deadline.

The fol­low­ing day, the arbi­tra­tor – sua sponte – inquired on the sta­tus of the state­ment of claim and extend­ed the dead­line by one day. There­upon, Claimant sub­mit­ted the state­ment of claim with­in the extend­ed dead­line. Respondent’s fol­low­ing objec­tion was dis­missed and the pro­ceed­ings con­tin­ued. Final­ly, an award was rendered.

Respon­dent chal­lenged the award before the Swiss Fed­er­al Tri­bunal and argued in par­tic­u­lar that the arbi­tra­tor had infringed the agree­ment of the Par­ties as reflect­ed in the Swiss Rules which pro­vide in Art. 28.1:

“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”. (Empha­sis added)

Accord­ing to the Respon­dent, Claimant was thus heard in a sit­u­a­tion in which he should not have been heard by the arbitrator.

In the chal­lenge deci­sion, the Swiss Fed­er­al Tri­bunal states: The fact that a pro­vi­sion in the arbi­tra­tion rules was intend­ed to apply by the par­ties and was thus bind­ing on the tri­bunal does not yet mean that such a pro­vi­sion is a manda­to­ry pro­ce­dur­al prin­ci­ple pur­suant to art. 190 para. 2 lit. d PILA (infor­mal trans­la­tion). The Swiss Fed­er­al Tri­bunal also notes that Respon­dent was not denied a sim­i­lar exten­sion of dead­line and, there­fore, no legal­ly rel­e­vant unequal treat­ment occurred. Final­ly, it is not­ed that Respon­dent had an oppor­tu­ni­ty to com­ment on the state­ment of claim and, there­fore, the right to be heard was not infringed either. For these rea­sons in par­tic­u­lar the Fed­er­al Tri­bunal dis­miss­es Respondent’s chal­lenge against the award.

In con­clu­sion, it appears to be rea­son­able that the Swiss Fed­er­al Tri­bunal does in prin­ci­ple not inter­fere with deci­sions of arbi­tral tri­bunals on exten­sions of dead­lines. At the same time, it is ques­tion­able whether the arbi­tral award will be inter­na­tion­al­ly enforce­able as non-com­pli­ance with the agreed pro­ce­dure may hin­der enforce­ment pur­suant to Art. V.1(d) of the New York Convention.

Against this back­ground, the spon­ta­neous exten­sion of Claimant’s dead­line by the tri­bunal could back­fire when Claimant tries to enforce its award under the New York Con­ven­tion. It is thus rec­om­mend­ed that arbi­tral tri­bunals with seat in Switzer­land adhere as close­ly as pos­si­ble to pro­ce­dur­al agree­ments of the par­ties, in order to safe­guard inter­na­tion­al enforce­abil­i­ty of the awards.