The idea for launching the process for revising the Swiss arbitration law (that is, Chapter 12 of the Swiss Private International Law Act (PILA)) goes back to a parliamentary initiative submitted by National Councillor Christian Lüscher in March 2008 (Lüscher initiative). He proposed to change the Swiss provision regarding the scrutiny of the Swiss courts when faced with the objection of a valid arbitration agreement. Currently, a Swiss court will only make a summary analysis of the validity and refer the case to arbitration if the seat of the arbitration is in Switzerland. If, however, the seat is abroad, the Swiss courts carry out a full review of the validity of the arbitration agreement, based on the application of the New York Convention. This has been considered by some as an unjustified distinction and also as not being in line with the principle of the negative effect of kompetenz-kompetenz.

Although the Lüscher initiative was generally well received, the question of whether or not it should be supported has been a matter of some discussion among Swiss practitioners. The National Council has now decided to put a decision on that initiative on hold, because the Committee for Legal Affairs of the National Council has proposed a new initiative which aims to review the Swiss arbitration law as a whole (see Initiative of the National Council regarding the revision of Chapter 12 of the PILA). This new initiative was accepted by the National Council. If, as is expected, the Council of States takes the same view (presumably in the autumn), the Federal Council will be asked to prepare a bill for a revised Chapter 12 of the PILA.

There seems to be a general consensus among Swiss arbitration practitioners that it is a good idea not to continue with the practice of isolated amendments of the Swiss arbitration law whenever the need arises and to take the Lüscher initiative as an opportunity to consider more generally what needs to be changed. Such thoughts were also spurred by the enactment in January 2011 of a modern law for domestic arbitration and by the recent revisions of the UNCITRAL Model Law and various institutional arbitration rules.

Although it is an appropriate time to consider the revision of Chapter 12 of the PILA, it should not be forgotten that it was, at the time of its enactment in 1989, an extraordinarily progressive piece of legislation which still works perfectly well. Thus, it would be a mistake to succumb to the temptation of "over activism" and to change it without any obvious need. Rather, it should essentially be kept as it is, that is, as a well drafted, short and concise law.

That said, it is not surprising for a law that will be 25 years old in 2014 and that deals with a very dynamic area that there is some need for amendment: this is in particular the case where the text of the law is not in line with the current practice of the Swiss Supreme Court (which is only the case with regard to the standard of conflicts of interest). Further, amendment may be needed where the law lacks the necessary transparency for users who are not insiders in Swiss arbitration (for example, the lack of an explicit provision on revision). Finally, there might also be a potential need where the reality of arbitrations today has changed in a way that had not been anticipated at the time of the drafting of Chapter 12 (in particular regarding complex arbitration).

Markus Wirth, an eminent Swiss arbitrator, launched the discussion as to the possible content of a revision last autumn in the context of the autumn Neuchâtel Arbitration Conference (see "Chapter 12 PILA - Is it Time for Reform? If Yes, What Shall Be its Scope?, in Ch. Müller/A. Rigozzi (HSG), New Developments in International Commercial Arbitration 2011 (Schulthess Editions Romandes 2011)).

The discussion will be continued this autumn with a broad number of participants on the occasion of the Annual ASA Conference in Bern on 28 September 2012.