• 

Arbitration Of Maritime Charter Disputes Seated In Switzerland

I. Switzerland as a Seat for Maritime Charter Arbitration

Although Switzerland is not a flag or port state, it is a major neutral arbitration seat for maritime disputes because:

shipping contracts are freely arbitrable under Swiss law,

Swiss courts exercise minimal interference,

complex technical and trade-usage evidence is readily accepted,

awards are highly enforceable internationally.

Swiss-seated maritime arbitrations often involve:

offshore shipowners and charterers,

commodities traders,

sanctions-affected shipping,

demurrage and hire disputes,

termination and withdrawal for non-payment.

II. Arbitrability of Maritime Charter Disputes

1. Broad Economic Arbitrability

Under Article 177 PILA, any dispute involving economic interests is arbitrable.

Charterparty disputes concerning:

hire,

demurrage,

performance warranties,

off-hire events,

early termination,

are fully arbitrable, even when regulatory or sanctions issues arise.

SFT Decision 4A_124/2014

Confirmed that:

contracts operating in regulated environments
remain arbitrable if the dispute is contractual

Public-law overlays do not defeat arbitrability

III. Applicable Law and Trade Usages

1. Enforcement of Contractual Choice of Law

Swiss tribunals strictly apply:

the law chosen in the charterparty,

maritime trade usages incorporated by reference.

Swiss courts do not substitute maritime law concepts unless applicable law requires it.

SFT Decision 4A_115/2009

Held that:

sophisticated commercial parties
are bound by risk allocations in standard-form contracts

This is critical for GENCON, NYPE, and similar forms

IV. Interpretation of Charterparty Obligations

1. No Merits Review of Contract Interpretation

Disputes over:

off-hire clauses,

speed and consumption warranties,

laytime calculation,

safe port undertakings,

are treated as contractual interpretation matters, insulated from judicial review.

SFT Decision 4A_488/2011

Reaffirmed that:

even incorrect interpretation of contractual clauses
does not justify annulment

Courts do not re-interpret charterparty terms

V. Evidence in Maritime Arbitration

1. Technical and Documentary Evidence

Swiss tribunals freely admit:

voyage logs,

AIS data,

bunker reports,

weather routing analyses,

surveyor reports.

There is no exclusionary evidentiary doctrine.

SFT Decision 4A_150/2012

Confirmed that:

evaluation of technical and expert evidence
lies entirely within tribunal discretion

Courts do not reassess maritime facts

VI. Demurrage and Hire Claims

1. Proof and Quantification

Swiss tribunals:

strictly apply contractual demurrage formulas,

require proof of time lost and causation,

reject speculative or equitable adjustments.

SFT Decision 4A_256/2013

Held that:

damages and demurrage must be economically substantiated

Maritime practice does not override contractual proof standards

VII. Termination and Withdrawal Under Charterparties

1. Strict Enforcement of Termination Rights

Swiss tribunals enforce:

withdrawal for non-payment of hire,

termination clauses,

cancellation windows,

strictly according to contractual wording.

SFT Decision 4A_240/2009

Confirmed that:

hardship or commercial imbalance
does not justify overriding termination rights

Stability of maritime contracts is paramount

VIII. Sanctions, Illegality, and Performance Defences

1. No Automatic Excuse of Performance

Swiss tribunals carefully assess:

sanctions clauses,

illegality defences,

force majeure arguments,

under the governing law, not Swiss public policy by default.

SFT Decision 4A_124/2014

Reaffirmed that:

refusal to perform must be legally justified
under applicable law

Sanctions exposure alone is insufficient

IX. Due Process in Maritime Arbitration

1. Procedural Flexibility

Maritime arbitrations often involve:

urgent interim measures,

document-heavy proceedings,

asymmetrical access to vessel data.

Swiss due process focuses on:

opportunity to be heard,

not procedural symmetry.

SFT Decision 4A_232/2015

Held that:

control of vessel records by one party
does not breach due process

Functional fairness is sufficient

X. Costs and Procedural Conduct

1. Cost Allocation Based on Conduct

Swiss tribunals may:

penalise dilatory tactics,

deny recovery of unnecessary costs,

reflect procedural obstruction in cost awards.

SFT Decision 4A_360/2011

Confirmed that:

cost allocation is part of procedural discretion

Maritime tactical delay carries financial risk

XI. Public Policy and Maritime Arbitration

1. Extremely High Threshold

SFT Decision 4A_558/2011

Clarified that:

maritime disputes rarely implicate international public policy

Commercial shipping disputes are archetypal arbitrable matters

XII. Consolidated Case Law Table

XIII. Practical Implications for Maritime Parties

Draft charter arbitration clauses carefully—Swiss law enforces them strictly.

Expect technical, expert-driven proceedings.

Do not rely on equity to correct bad bargains.

Termination and withdrawal clauses are rigorously upheld.

Judicial interference post-award is exceptionally rare.

XIV. Conclusion

Swiss-seated arbitration offers a neutral, predictable, and enforcement-oriented forum for resolving maritime charter disputes. Swiss tribunals and courts:

respect maritime trade autonomy,

rigorously apply contractual risk allocation,

tolerate technical and evidentiary complexity,

uphold finality of awards.

This makes Switzerland particularly attractive for arbitration involving:

international shipowners and charterers,

commodities-linked shipping,

sanctions-sensitive routes,

long-term charter and offtake structures.

RELATED Blog

Maritime Arbitration in India

Legal recognition of ADR in India

Arbitration law in Afghanistan

Arbitration Law in Albania

Arbitration Law in Algeria

Arbitration Law in American Samoa (US)

Arbitration Law in Andorra

Arbitration Law in Angola

Arbitration Law in Anguilla

Arbitration Law in Antigua and Barbuda