Article 62(1) of the Swiss Federal Supreme Court Act (FSCA) provides that the party filing an appeal must, as a rule, pay an advance on the court's costs in the amount of the estimated court's costs.

Article 62(2) FSCA, provides that the respondent to the appeal can request that the party filing the appeal pay security for the respondent's legal fees where the appealing party has become insolvent or does not have a domicile in Switzerland.

In an international arbitration before the Zurich Chamber of Commerce between party X and parties Y and Z, X appealed against a procedural order of the sole arbitrator to the Federal Supreme Court.

The Federal Supreme Court ordered X to pay an advance on court fees in the amount of CHF50,000 which X paid. Upon a subsequent request of Y and Z, the Federal Supreme Court ordered X, in addition, to pay security for the parties' legal costs in the amount of CHF60,000. Subsequently, X informed the Federal Supreme Court that it would not pay CHF60,000 and requested that the court dismiss its appeal without examining the merits.

The Federal Supreme Court dismissed the appeal without examining the merits.

The decision of the Federal Supreme Court is of interest for any party to a domestic or an international arbitration appealing against an award to the Swiss Federal Supreme Court.

The advance on costs is subject to Article 62 FSCA, which also applies to motions to set aside an arbitral award pursuant to Article 190 of the Swiss Private International Law Act (PILA). Article 62(2) FSCA allows the adverse party to request security because the appealing party is not domiciled in Switzerland. However, it should be noted that such security cannot be requested where the appealing party has his/her domicile in a country with which Switzerland has concluded a bilateral or multilateral agreement (for example, The Hague Convention relating to civil procedure of 1 March 1954, Article 17) which excludes any discrimination regarding advances for court costs based on the place of domicile alone.

If the Federal Supreme Court orders a party to pay an advance on court fees or security for legal fees, it will only examine the merits of the appeal after the payment has been made.

The decision shows that the advance on costs requested from a party filing the appeal can be substantial if the amount in dispute is high.

Finally, it is worth pointing out that X appealed against a procedural order. While procedural orders are generally not subject to set aside proceedings, the Federal Supreme Court has held in the past that the title "procedural order" does not necessarily prevent a decision from being deemed to be an interim award, which is subject to set aside proceedings (4A_210/2008 dated 29 October 2008, ann. 2.1). When determining whether or not the set aside proceedings are admissible, the content of the decision – not its title – is decisive (for example, if a "procedural order" contains an implicit decision on the arbitral tribunal's jurisdiction, that part of the "procedural order" constitutes an interim award which can be challenged).