Arbitration Newsletter Switzerland: No Reasoning in the Award – no Review of the Award!
In its decision of 12 May 2023 (4A_41/2023), the Supreme Court dismissed an action for annulment against an arbitral award, rendered by a rabbinical arbitral tribunal, that lacked any findings of fact and legal reasoning. The Supreme Court held that, while the arbitral award in question could be challenged at the Supreme Court, it could de facto not be reviewed by the Supreme Court due to the complete lack of information in the decision itself. The fact that the award does not contain any reasoning does not make it void given that both the procedure as well as the form and content of an arbitral award are primarily subject to party autonomy under the Swiss lex arbitri.
The decision of the Supreme Court highlights the importance of an informed decision about the procedural rules and provisions that shall apply on the arbitration: If the parties agree on procedural rules or provisions which foresee or have the consequence that the award is rendered only orally or in writing – but without any reasoning – the award can de facto not be annulled by the Supreme Court, except under very special circumstances. Hence, to put it simple: You better know what you are bargaining for in the arbitration clause – if not, you may be surprised by severe consequences!
Read the full newsletter: 2023-08-28-Arbitration-Newsletter.pdf (pdf 5 MB)