With the last 2 years reaching record highs in cross-border M&A activity, international arbitration has never been hotter.  It’s a constantly evolving and dynamic field and it is essential for arbitrators keep up with regional, technological and cultural developments within all of the areas they operate.

Businesses all over the world are increasingly turning towards ADR mechanisms such as arbitration to settle disputes, moving away from the traditional approach of litigation via the courts. Arbitration is time-saving, confidential and cost-effective; it has become a vital means of protecting commercial interests.In a country with such a broad international reach, the Swiss business community has always been—and remains among the primary users and locations for international arbitration. The country is an ideal location for settling international business disputes; it’s politically neutral, has a well-developed legal system, is conveniently located and perhaps most importantly, has what is the most open mind of all in the arbitration community – making it very easy for foreign parties with different values, cultures and perceptions to come and settle disputes.Swiss arbitration law is based on an international recognized standard and as a worldwide leader in the international finance sector; Switzerland is home to a wide range of highly skilled practitioners, who are suitable to act as arbitrators in international arbitrations. Experts for all sectors of the economy are able to provide professional support for arbitral tribunals and parties.
 
Acquisition International speaks to Joachim Frick ,a partner of Baker & McKenzie in Zurich who regularly advises Swiss and international companies as party counsel in arbitration proceedings (under Swiss, ICC, ad hoc and other arbitration rules). In addition, Joachim teaches arbitration as a part time professor of law at Zurich University.
 
The Zurich office of Baker & McKenzie frequently represents Swiss and international clients in national and international arbitration proceedings. It has done so since its foundation in 1958 and under most  relevant rules of arbitration. Lawyers of Baker & McKenzie frequently act also as arbitrators. Switzerland is one of the leading places for arbitration proceedings in the world. The statistical reports of the International Chamber of Commerce (ICC) has repeatedly ranked Switzerland first for place of arbitration, origin of arbitrators and applicable law. With the Swiss Rules of International Arbitration, Switzerland has one of the most recognized and most modern set of arbitration rules in the world. Accordingly, many clients of the 68 office’s of Baker & McKenzie in 40 countries foresee arbitration clauses in favour of arbitration conducted in Switzerland. 
 

While Baker & McKenzie normally represents private Swiss and international clients, it has in a number of jurisdictions also represented governments and states in arbitration proceedings.  

“The main reasons for parties choosing Switzerland as a venue for arbitration are Switzerland’s stability and neutrality, the arbitration friendliness of its legal system for over 100 years, and the fact that many contracts referring to arbitration in Switzerland also provide that they are governed by Swiss substantive law. Swiss law is considered as a neutral, easily accessible and down to earth law, which contract negotiators all over the world consider as providing liberal and predictable rules. The neutrality provided by arbitration in Switzerland is of particular importance in arbitrations where none of the parties is domiciled in Switzerland; Swiss arbitration is then often chosen together with Swiss law to avoid giving preference to the domicile or law of one of the parties. In the past decade, Swiss arbitration was often chosen for instance by German companies in international contracts with non-German parties. This allowed also to some extent to avoid more complicated and less predictable rules of German consumer protection laws.
 
“The legal framework (Lex arbitri) of Swiss international arbitration proceedings is the Swiss Federal Act on Private International Law. It foresees in its chapter 12 the basic, to a large extend non mandatory, rules of arbitration for international arbitration proceedings conducted in Switzerland. For national arbitration proceedings the lex arbitri is since January 1, 2011 set forth in the Swiss Federal Law on Civil Procedure. To the extend there are no mandatory rules, the parties are free to agree on the rules applicable to their arbitration. They can either agree on a set of rules (such as the ICC or Swiss International Arbitration Rules) or design their own ad hoc arbitration proceeding. The problem with ad hoc arbitration is that the parties when entering a contract often do not foresee the issues which may be relevant in a future dispute; however, once the dispute arises they are unable to agree on specific rules. Accordingly, it is often more advisable to simply refer in a contract to standard arbitration rules. An exception may apply in cases where one of the parties is a state or government. 
 

The global downturn did not have an impact on the number or volume of arbitration work conducted in Switzerland. To the contrary, it seems that m&a disputes have become a more important subject.

While in the past boom years m&a parties often refrained from suing each other due to an overwhelming interest in proceeding with transactions, the downturn may have the effect that a party is more willing to initiate arbitration proceedings to review terms of m&a agreements entered into in the boom years, or to raise respective warranty claims. 

The number and volume of documents to be reviewed and handled in large arbitrations significantly increased in the past decades.

This requires the use of document and case management systems to electronically assist party counsels and arbitrators. Also, many arbitral tribunals allow or require parties to submit documents in an electronic form, sometimes requiring that the documents can be electronically reviewed with search requests. Since the time spent for arbitration proceedings is of a growing concern to the parties, arbitral tribunals have become reluctant to allow extensions for deadlines or changes to an agreed timetable. Accordingly, thinking ahead and electronic time tabling programs have become even more important.
 
“We regularly send electronic or hardcopy client alerts. In addition, Baker & McKenzie Zurich publishes its Annual Year Book of Commercial Law which includes a chapter on arbitration authored by Joachim Frick. Baker & McKenzie also publishes its Annual Yearbook on International Arbitration in which Joachim Frick since the first edition co-authors the chapter for Switzerland. Finally, Baker & McKenzie Zurich organizes client seminars and business briefings covering the subject of arbitration on a regular basis (usually two large seminars per year plus additional ad hoc business briefings when there are new developments in the field of arbitration).
 
“This is indeed a growing concern. Parties can limit legal fees, however, by agreeing on a specific set of arbitration rules (for instance on expedited procedures and arbitral tribunals with one instead of three arbitrators). Also, the structuring of evidence proceedings to avoid for instance discovery and similar proceedings which involve large numbers of documents can lower arbitration costs. Case management by the chairmen of arbitration tribunals has become much more important than in earlier years and also allows the limitation of costs. Nevertheless, it appears that in very large disputes the arbitration costs are still only a fraction of what is overall at stake and not the predominant concern of the parties involved.”

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