Opting for choice of forum clause in favour of Swiss state courts

In our March 2014 column in China Business Law Journal, we featured Switzerland as a preferred place for international arbitration. While in our practice we still see a majority of international contracts being subjected to arbitration, an increasing number of parties to international contracts is opting for a choice of forum clause in favour of Swiss state courts for a variety of reasons – even in cases that have no other reference to Switzerland.

Court resolution or arbitration?

Parties usually opt for Swiss arbitration, or a choice of forum in favour of Swiss state courts, because they subjected the contract to Swiss law, mainly because they are well aware of Switzerland’s political neutrality and trust that the Swiss civil law is well balanced. When it comes to the issue of submitting dispute resolution to Swiss arbitration or Swiss state courts, a party familiar with the Swiss state courts’ dispute resolution system may favour state court resolution over arbitration for the reasons discussed below.

Generally, Switzerland is well known for its efficient court system, which is independent from the government, free of corruption and unbiased.