Due to its political neutrality, Switzerland is one of the preferred countries in the world in international arbitration matters. Switzerland is home to many international institutions and dispute resolution organizations such as the United Nations, the World Trade Organization (WTO) or the World Intellectual Property Organization (WIPO). The main regulatory instrument for arbitration in Switzerland is the International Arbitration Law of the Federal Private International Law Act, Chapter 12 issued in 1987. The Swiss Federal Private International Law Act contains 18 articles that favor arbitration.
The main trait of the arbitration law in Switzerland is that it recognizes the principle of party autonomy. However, there are other characteristics that make Switzerland an international arbitration center:
The Swiss rules of international arbitration, simply known as the Swiss rules, were enabled in 2004 and are based on the UNCITRAL Arbitration Rules of 1976. The Swiss rules represent the outcome of the unification of all arbitration regulations of the Chambers of Commerce of Basle, Berne, Geneva, Lausanne, Lugano, Neuchâtel and Zurich. Articles 176 to 194 are the main legal frame work for international arbitration in Switzerland in Chapter 12 of the Federal Code on Private International Law established in 1987 (Swiss CPIL). Chapter 12 in the Swiss CPIL was customized to meet the international business society for commercial arbitration regulations. Chapter 12 states that parties are allowed to choose the applicable rules in cases of commercial disputes or make their own rules for settling a disagreement.
Domestic arbitration falls under the Federal Civil Procedure Code (CPC), Articles 353 to 399 starting 2011 unless the parties agree to settle their disagreements according to Chapter 12 of the Swiss Rules.
The arbitration agreement in Switzerland has independent substantive regulations in order to abstain from referring to national of foreign rules. According to Article 178, paragraph 1 of the Swiss Code on Private International Law in order to become valid, the arbitration agreement must be written and it must be concluded according to the laws agreed upon by both parties, or according to the Swiss law the contract was signed under. A Swiss arbitration agreement cannot be challenged on the motive of invalidity of the constitutive contract.
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