SAA Papers
Hannes Latzel* has written a research paper on “Unreasoned awards under Swiss Law?” for Volume 5 of the Selected Papers on International Arbitration series. Here it is a brief summary of his paper:
Today, it is a universal principle in international arbitration that arbitral awards must state reasons, unless otherwise agreed by the parties. The same rule also applies under Swiss law. While in jurisdictions like the USA unreasoned awards are even referred to as “standard awards”, awards without reasons still remain a rare sight in Swiss arbitrations. This article examines the concept of the unreasoned award from a Swiss perspective and provides a comparative overview of selected foreign leges arbitri in view of this topic.
Furthermore, the Article focuses on the circumstances under which it makes sense for parties to opt for an unreasoned award. As there are advantages and drawbacks to both unreasoned and reasoned awards, it is crucial for parties considering a waiver of a reasoned award to be well aware of what they are signing up for. While an award without reasons can under very limited circumstances be beneficial for the proceedings in terms of costs, efficiency and confidentiality, it might also lead to a de facto waiver of the right to challenge such an award before the Swiss Supreme Court, if the existence of a ground of appeal cannot be ascertained from the operative part of the award.
Finally, the article discusses the scenario in which an arbitrator refrains from giving reasons without the authorization of the parties. A challenge of an unreasoned award solely on the ground that it lacks reasons is not possible under the Swiss Supreme Court’s current case law because an unauthorized unreasoned award constitutes neither a violation of the parties’ right to be heard nor an infringement of public policy. As the absence of reasons indicates that the tribunal has not considered all of the parties‘ arguments and allegations, the concerned party can, however, attempt to challenge the award on the ground that the tribunal has not considered one of its arguments.
Alternatively, a party might request the Supreme Court to order the arbitral tribunal to render an additional award that contains reasons. An action for damages against an arbitrator who issues an unauthorized unreasoned award has only little chance of success as the arbitrator’s liability is dependent on a successful challenge of his award. Yet, a concerned party has the possibility to demand a reduction of the arbitrator’s remuneration and, if need be, to force the arbitrator to give reasons by bringing an action for specific performance before a competent state court.
*Hannes Latzel studied law at the Universities of Lucerne and Bern where he participated in several national and international moot court competitions. After his studies, Hannes Latzel worked at a Cantonal High Court and subsequently in a major business law firm in Zurich. He is currently a Legal Counsel at the Swiss Chambers’ Arbitration Institution (SCAI) in Zurich.
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