In October 2009, the Swiss Federal Tribunal granted an order for the revision of a 13 year-old international arbitral award that was influenced by fraud (see Legal update, Federal Tribunal revises international arbitral award influenced by fraud).

Article 123(1) of the Federal Statute on the Federal Tribunal (FSFT) permits a petition for revision (that is, revocation) where "criminal proceedings establish that the decision was influenced to the detriment of the applicant by a felony or a crime, even if no conviction ensued. If criminal prosecution is not possible, proof may be brought in another manner." In the complex facts and circumstances surrounding this case, the Federal Tribunal found that the conditions for revision had been satisfied. Criminal proceedings in France had established that the arbitral award in question had been directly influenced by false testimony designed to mislead the arbitrators. The main perpetrator was not convicted as he died during the course of the investigation. The Federal Tribunal observed that, because this was the only reason there had been no conviction, the "objective conditions" of a crime were met. In particular, under Swiss law misleading a judge to obtain a decision causing pecuniary loss to an opponent can constitute "fraud in the procedure" (Prozessbetrug).

Consistent with prior case law, the Federal Tribunal held that its role was limited to examining whether the conditions for revision were met, and not to retry the case. Having found that those conditions had been met, the Federal Tribunal annulled the award, and remanded the case. While changing little in terms of doctrine, this decision provides an extensive restatement of the law of revision of an arbitral award in Switzerland – a legal mechanism relatively uncommon in other national arbitration laws. This decision is the first time since the entry into force of the FSFT in 2007, and only the second time since the entry into foce of the Private International Law Act in 1989, that the Swiss Federal Tribunal has revised an international arbitral award.

In June 2009, the Swiss Federal Supreme Court held that a law firm was not liable for VAT since the firm's work for an arbitral tribunal (the Claims Resolution Tribunal for Dormant Accounts (CRT)) was covered by Article 17(4) of the former Ordinance of 22 June 1994 on VAT (VATO) and Article 23(1) of the Federal Act of 2 September 1999 on Value Added Tax (VATL) which grant VAT exemptions for charges arising from the "functions of arbitration" (see Legal update, Law firm providing services to an arbitral tribunal is exempt from VAT).

Schellenberg Wittmer (SW) had acted as secretariat to the CRT and had not charged VAT on the basis that its work was an integral part of the arbitral tribunal's exercise of its arbitration functions. The Federal Tax Administration disagreed and ordered SW to pay VAT on all amounts invoiced to the CRT. The Supreme Court granted SW's appeal by a 4 to 1 majority. The Supreme Court held that under Article 17(4) of the VATO arbitration functions qualified as sovereign acts and were exempt from VAT, however, the services rendered by the secretariat did not have to pass this test – the decisive point was the actual nature of the services provided and whether such services qualified as arbitral functions in terms of the legislation on VAT. It further held that the "arbitration functions" consisted in the professional assessment of and decision on complex issues of law and of facts, and that the purely administrative services (for example, typing and clerical work, archiving, accounting) did not qualify as functions of arbitration but only as supporting services to arbitral functions. SW performed both functions of arbitration and administrative services. Its work encompassed the management of contacts with the parties to the proceedings, legal research, the review of evidence, the drafting of orders and decisions, and so on, all of which required legally trained and highly qualified personnel. The arbitral functions performed by SW clearly outweighed the administrative tasks and, therefore, the law firm's services were exempt from VAT as a whole.

The decision is of great importance in that it recognises that arbitrators may have to draw on the support of legal and administrative staff. From a tax perspective, the services rendered by such support staff are treated as being similar to the key functions rendered by arbitrators. The decision further demonstrates the arbitration-friendly environment of Swiss law and practice.

On 31 March 2009, in Vivendi SA and others v Deutsche Telekom AG and others, 4A_428/2008, the Swiss Federal Supreme Court refused to set aside an interim award of an ICC arbitral tribunal, holding that it was correct in discontinuing proceedings against the insolvent co-respondent (see Legal update, Ongoing international arbitration discontinued vis-a-vis insolvent co-respondent). Elektrim SA, a co-respondent Polish company which became insolvent during the arbitral proceedings, had requested the tribunal to discontinue the arbitration against it. It argued that Polish law provided for the invalidity of arbitration agreements to which it was party, relying on Article 142 of the Polish Bankruptcy and Recovery Law (PBRL). The Supreme Court held that Swiss law was silent on the issue of subjective arbitrability of non-state parties and therefore applied general procedural principles to determine legal capacity. It concluded that the legal capacity and thus the capacity of the Polish co-respondent to be a party to international arbitration proceedings were to be determined in accordance with Polish law. Since Article 142 PBRL deprived an insolvent Polish company of its subjective arbitrability, such an insolvent company could not continue to be party to arbitration proceedings.

The decision of the Swiss Federal Court has triggered controversy among arbitration practitioners in Switzerland. Until this decision, the Swiss view was predominantly that the lex arbitri determines the issue of subjective arbitrability. The Supreme Court, however, interpreted Article 142 PBRL as depriving an insolvent party of its subjective arbitrability. It therefore discontinued the arbitration vis-à-vis the insolvent company although the wording of Article 142 does not specifically address the issue of subjective arbitrability, but merely states that the respective arbitration clause would lose its legal effect and therefore any pending arbitration proceedings vis-à-vis the insolvent party would be discontinued. Interestingly, the English Court of Appeal dealt with the same question of whether to discontinue a London arbitration involving the same insolvent Polish company, and, applying Article 15 of the EU Insolvency Regulation (which does not apply in Switzerland), came to the opposite conclusion to the Swiss court (see Legal update, Court of Appeal determines effect of party's insolvency in one EU jurisdiction on arbitral proceedings in another).