No Two-Tier Judicial Review Of Constitution Of Arbitral Tribunal

Introduction

The guarantee to an independent and impartial tribunal is a fundamental tenet of justice (eg, Article 2, Paragraph 3 lit b of the International Covenant on Civil and Political Rights; see Article 6, Paragraph 1 of the European Convention on Human Rights). In the context of arbitration, it requires that national law allow the regularity of the constitution of the arbitral tribunal to be reviewed by a judicial authority (one-tier judicial review). Under Swiss law, such review occurs at a different stage depending on whether the initial determination on the constitution of the tribunal is made by:

a judicial authority in an ancillary proceeding (as is the case for ad hoc arbitration), in which case there will be no further judicial review in this respect – not even against the final award; or a private body (as is usually the case for institutional arbitration (eg, the ICC International Court of Arbitration or the Court of Arbitration for Sport)), in which case the judicial review will be part of the challenge against the award. The Supreme Court confirmed this practice in a recent decision. It declined to hear, in a challenge against the final award, arguments related to the constitution of an ad hoc arbitral tribunal that had already been heard by the lower cantonal court in an ancillary proceeding.1

In the same decision, the Supreme Court made clear that when an award is set aside, there is nothing to prevent the case from being decided by the same arbitrators, as long as the grounds for annulment are not the tribunal's irregular constitution or lack of jurisdiction.

Facts

An ad hoc arbitral tribunal issued a final award in a commercial dispute between two parties. The Supreme Court vacated this award in part, on the grounds that it failed to address – even implicitly – the absolute statute of limitations objection raised by the defendant, which could have led to a different outcome on the merits.2 Thereafter, the arbitral tribunal reconvened on its own motion and invited the parties to file their additional submissions on the statute of limitations argument. The defendant objected:

first, on the grounds of lack of jurisdiction of the arbitral tribunal after the issuance of the previous but cancelled final award, failing any express reference to the arbitral tribunal's jurisdiction in the Supreme Court's decision; and second, on the grounds of the arbitral tribunal's lack of impartiality to decide the matter. The arbitral...