REUTERS | Valentin Flauraud

Arbitration, human rights and due process: recent developments in Switzerland

In Switzerland, the relationship between international arbitration law and human rights has attracted a growing amount of interest over the past few years. However, in practice, human rights issues have been relatively slow to arise in the international arbitration context.

One reason lies in the fact that the most important international instrument for the protection of human rights, the European Convention on Human Rights (ECHR), is not directly applicable in Switzerland. However, much of the case law developed by the Swiss Supreme Court on procedural guarantees, such as due process, reflects the case law of the European Court of Human Rights (ECtHR). That said, the Swiss Supreme Court decided in 1991 that Article 6(1) ECHR could be taken into consideration when examining the grounds to set aside an arbitral award in Switzerland (see ATF 117 Ia 166, confirmed by unreported ATF Hitachi v SMS, 30 June, 1994, 15 Bull. ASA 99 (1997)). As a result, challenges to arbitral awards, based on alleged breaches of Article 6(1) ECHR, have risen substantially. Specifically, this has tended to happen in sports-related disputes, where recourse to arbitration is not usually the fruit of consensus, but follows from mandatory arbitration clauses inserted in the statutes and by-laws of various sports governing bodies.

This contribution will not explore the complex interaction between the ECHR and sports arbitration, but will rather focus on two decisions rendered in 2016 (the first, by the ECtHR in the context of a complaint brought against Switzerland, and the second by the Swiss Supreme Court). These consider, respectively, whether:

  • A waiver of recourse against an international arbitration award is compatible with the ECHR.
  • An arbitral tribunal would violate due process (and more specifically a party’s right to be heard) if it refused to allow the parties to submit further submissions (and adduce additional evidence) in the arbitration, where those same parties had agreed to limit the number of submissions to be exchanged in their arbitration agreement.

In the first decision, dated 1 March 2016 (Tabbane v Switzerland (application no. 41069/12), the ECtHR considered for the first time the compatibility of a waiver of recourse against an arbitral award with article 6(1) ECHR.

In that case, on 2 July 2012, an application was filed with the ECtHR. This followed a decision of the Swiss Supreme Court, which declared inadmissible a petition to set aside an arbitral award. The court had found that a contract provision, which stated that “the decision of the arbitration shall be final and binding and neither party shall have any right to appeal such decision to any court of law”, would constitute a valid exclusion of any right of recourse against the arbitral award. In his application, the petitioner argued that Article 192 of the Swiss Private International Law Act (PILA) (which provides that a party may, in certain circumstances, waive recourse against an arbitral award) was not compatible with Article 6(1) ECHR.

The ECtHR re-stated that, contrary to mandatory or compulsory arbitration, where parties cannot validly waive the guarantees set out at Article 6(1) ECHR, voluntary arbitration would not fall under that provision. As a result, parties should be entitled to waive certain rights guaranteed by the ECHR, if those waivers are freely made, licit and unequivocal. The ECtHR ultimately upheld the findings of the Swiss Supreme Court. In particular it found that:

  • The wording of the waiver of recourse was unequivocal.
  • It was freely made.
  • More importantly, Article 192 PILA followed a legitimate objective, namely to reinforce the attractiveness of Switzerland as a place for international arbitration.

In the second decision (4A_342/2015), the Swiss Supreme Court considered whether, and in which circumstances, an arbitral tribunal could refuse to allow parties to submit further submissions, without violating their rights to be heard, if and when those parties had agreed to limit the number of submissions in the arbitration. Here, the parties had agreed to exchange only one round of written submissions. After the first round of submissions, the claimants sought leave from the arbitral tribunal to file further submissions. The request was ultimately denied by way of a partial award. The claimants filed an application to have the partial award set aside; they complained that the decision of the arbitral tribunal violated their right to be heard and, in particular, they argued that an unconditional right to a written reply submission flowed from the ECHR.

After reiterating that a party could not rely directly on the ECHR, even if the principles deriving from the ECHR may serve to provide guidance on the due process guarantees set out in the PILA, the Swiss Supreme Court made clear that parties to an arbitration agreement are always free to regulate the conduct of the proceedings as they see fit. Further, the court determined that a waiver of the right to serve a written reply contained in an arbitration clause would not affect the very core of the parties’ rights to be heard. The court considered whether decisions based on ECtHR case law, which allowed for parties to respond in writing to any substantive pleadings submitted by opposite parties in national court proceedings, applied in international arbitration. Importantly, in these circumstances, the court determined that they did not.

Schellenberg Wittmer Sebastiano Nessi

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