General Provisions

Art. 1

Applicability of the International Arbitration Rules

The present International Arbitration Rules of the Zurich Chamber of Commerce of January 1, 1989 are applicable if, at the time when the arbitration agreement was concluded, at least one party had its registered or actual seat, its domicile or its habitual residence outside Switzerland.

Arbitration between parties having their seat, domicile or habitual residence in Switzerland follows the "Rules of Conciliation and Arbitration of the Zurich Chamber of Commerce".

Art. 2

Jurisdiction of the Arbitral Tribunal

The Arbitral Tribunal has jurisdiction over arbitrable disputes between the parties.

The management of the Zurich Chamber of Commerce investigates summarily whether there is a valid arbitration agreement between all parties that provides for Zurich Chamber of Commerce arbitration; when such an agreement is lacking it notifies the claimant that the arbitration cannot be conducted.

In all other respects the Arbitral Tribunal decides on its own jurisdiction.

Art. 3

Applicable Procedural Law

The procedure follows:

The 12th chapter on international arbitration of the Swiss federal Private International Law Statute of December 18, 1987 (PIL Statute);

These International Arbitration Rules of the Zurich Chamber of Commerce;

The arbitration agreement and other agreements between the parties which are not contrary to the Statute and the International Arbitration Rules;

The orders and decisions of the chairman and the Arbitral Tribunal applying the International Arbitration Rules.

Art. 4

Applicable Substantive Law

The Arbitral Tribunal decides according to the substantive law declared applicable by the parties.

If the parties have not chosen an applicable law, the Arbitral Tribunal decides the case according to the law applicable according to the rules of the Private International Law Statute.

If however, the application of the PIL at the seat, domicile or habitual residence of all parties leads similarly to a different result, the case must be decided accordingly on motion of one of the parties.

Art. 5

Award ex aequo et bono

The parties may empower the Arbitral Tribunal to make its award ex aequo et bono.

Art. 6

Seat of the Arbitral Tribunal

The seat of the Arbitral Tribunal is at the seat of the Zurich Chamber of Commerce in Zurich.

On motion of a party, the President of the Chamber of Commerce may designate another place as the seat if this is required, or deemed desirable, to enforce the award at the seat, domicile or habitual residence of one of the parties.

Meetings and hearings of the Tribunal may be conducted in places other than the seat.

Art. 7

Notifications

Orders, decisions and awards of the Chamber of Commerce and the Arbitral Tribunal are, as a rule, notified by registered letter against receipt, or if necessary by private courier or through diplomatic channels.

Simple notifications and extensions of deadlines may also be notified by ordinary letter, telefax or telex.

Commencement of the Arbitration and Formation of the Arbitral Tribunal

Art. 8

Lis Pendens

The arbitration is pending if the prerequisites of Art. 181 of the Private International Law Statute are fulfilled.

Art. 9

Commencement of Arbitration

The claimant must submit the following, in four copies, to the Zurich Chamber of Commerce:

A request for arbitration in writing, specifying the names of the parties, their legal nature and their address;

Either a complaint in the sense of Art. 29 subs. 2 or a short written summary of the facts, and the prayers for relief;

The agreements between the parties relevant to the dispute; in particular the arbitration agreement in the original or in copy;

In two-party arbitration, if the arbitration agreement provides that the parties shall nominate one member of a three-men Arbitral Tribunal each: Name and address of the arbitrator nominated by claimant;

Documents evidencing payment of the registration fee provided in the schedule of fees through transfer to the bank or postal checking account of the Zurich Chamber of Commerce; or, a check payable at a Swiss bank.

If these prerequisites are not fulfilled on the Chamber of Commerce's first written request to supply the missing items, the management of the Chamber of Commerce notifies the claimant that the arbitration cannot be conducted.

If only the nomination of an arbitrator is missing, the President of the Chamber of Commerce makes the nomination.

Art. 10

Number of Arbitrators

If the parties have not expressly agreed on the number of arbitrators, the President of the Zurich Chamber of Commerce decides, independently from a possible nomination of an arbitrator by claimant, whether a sole arbitrator or a three-person Arbitral Tribunal shall be appointed.

If the value in litigation exceeds SFr. 1 000 000.-- and the parties have not expressly provided for a sole arbitrator, a three-person Arbitral Tribunal is appointed.

For multi-party arbitration a three-person Arbitral Tribunal is appointed.

Art. 11

Appointment of the Chairman or Sole Arbitrator

The board of the Zurich Chamber of Commerce appoints eight or more experienced lawyers as permanent chairmen of the Arbitral Tribunal, amongst them practising lawyers and judges.

For each arbitration, the President of the Chamber of Commerce appoints the chairman or sole arbitrator from amongst the permanent chairmen.

In special cases the President may also appoint another suitable person as chairman of the Arbitral Tribunal or sole arbitrator.

Art. 12

Appointment of the Co-arbitrators

If the parties have so agreed in writing, for two-party arbitration they appoint one member of the three-person Arbitral Tribunal each. For the claimant, Art. 9 subs. 1 letter d. applies; the chairman of the Arbitral Tribunal sets a deadline for the respondent to appoint its arbitrator.

If the claimant has appointed an arbitrator and the respondent fails to appoint an arbitrator, the chairman of the Arbitral Tribunal asks the President of the Zurich Chamber of Commerce to appoint an arbitrator instead.

If the parties did not provide that they would appoint arbitrators, or, in multi-party arbitration, the chairman of the Arbitral Tribunal appoints his co-arbitrators form a list of four or more names submitted to him by the President of the Chamber of Commerce.

Art. 13

Multi-Party Arbitration

If there are several claimants or several respondents, or if the respondent, within the deadline for the answer, files a claim with the Zurich Chamber of Commerce, against a third party based on an arbitration clause valid according to Art. 2 subs. 2 an identical three-men Arbitral Tribunal is appointed according to Art. 12 subs. 3 for the first and all other arbitrations.

The Arbitral Tribunal may conduct the arbitrations separately, or consolidate them, partly or altogether.

Art. 14

Assignment of further Arbitrations

A new dispute between parties which already have an arbitration pending under the International Arbitration Rules may be assigned by the President of the Zurich Chamber of Commerce to the existing Arbitral Tribunal.

The Arbitral Tribunal may conduct the arbitrations separately, or consolidate them, partly or altogether.

Art. 15

Assistance

The Arbitral Tribunal appoints, when required, court reporters an other assistants.

A clerk for the entire arbitration, with or without consultatory voice, may be appointed only with the previous assent of the parties.

Art. 16

Challenge of an Arbitrator

An arbitrator may be challenged if circumstances exist that give rise to legitimate doubts concerning his independence.

If the arbitrator contests the challenge, a five-person arbitral supervisory commission appointed by the Board of the Zurich Chamber of Commerce decides by majority decision.

The decision of the arbitral supervisory commission is final.

Art. 17

Removal of an Arbitrator

If an arbitrator does not fulfil his duties despite having been called to them by the other arbitrators or the Zurich Chamber of Commerce, the arbitral supervisory commission may remove him by majority decision (Art. 16 subs. 2).

The arbitrator must be heard. The decision of the arbitral supervisory commission is final.

Art. 18

Replacement of an Arbitrator

If an arbitrator dies or if, through no fault of his, he is no longer able to fulfil his duties, and if the arbitrator had been nominated by a party, the President of the Zurich Chamber of Commerce sets that party a deadline to nominate a new arbitrator.

If the party fails to nominate a new arbitrator, and in all other cases, in particular if an arbitrator was successfully challenged or removed, the President of the Chamber of Commerce appoints the new arbitrator.

The arbitration continues with the new arbitrator where his predecessor left it.

Procedure Before the Arbitral Tribunal

Art. 19

Good Faith

All participants in the arbitration must act in good faith.

Art. 20

Constitution

As a rule after having heard the parties, they are notified by an order of the sole arbitrator or, by a decision of the Arbitral Tribunal, the names, addresses, telephone, telex and telefax numbers of the arbitrators, the parties and their representatives. Further, the decree for directions provides the following:

Form and number of the briefs and documents to be submitted by the parties;

One or more languages for the procedure as provided in Art. 22;

If there is, as yet, no detailed complaint: a deadline for the claimant to submit one including attachments; If there is already a detailed complaint: a deadline for the respondent to submit a written answer including attachments;

Further provisions for the procedure as deemed necessary by the sole arbitrator or the Arbitral Tribunal, such as provisions for the submission of an extract from the Register of Commerce, or of proxies, or provisions on testimony of witnesses and expert evidence;

The advance to be paid by the parties, the deadline for payment, and the consequences of non-compliance.

Art. 21

Chairman

The chairman leads the arbitration.

He may call in deposits, call meetings and set and extend deadlines.

He represents the Arbitral Tribunal vis-à-vis the courts, the authorities and the Zurich Chamber of Commerce.

Art. 22

Language

The Arbitral Tribunal determines the language or languages that must be used in written communications and in hearings. It provides for the necessary translations and, where required, interpreters and decides on the distribution of the costs and the risk of erroneous translation.

As a rule, the procedure with the parties is conducted in the language of the arbitration agreement, and the parties may arrange at their own expense and at their own risk for their own translators and interpreters.

Art. 23

Transcript

The Arbitral Tribunal determine to what extent the hearings shall be recorded in a written transcript, or audio-taped.

Art. 24

Representation of the Parties

The parties may be represented or counselled before the Arbitral Tribunal by practising lawyers and other natural persons.

If the notification is particularly difficult or time-consuming, the Arbitral Tribunal may order a party to appoint an authorized representative for notifications at a suitable place. If the party fails to comply, the notification is omitted.

Art. 25

Plea of Lack of Jurisdiction

A plea of lack of jurisdiction of the Arbitral Tribunal must be raised, at the latest, with the answer on the merits by the respondent.

The Arbitral Tribunal decides on its own jurisdiction after having heard the other party, as a rule by an interim award.

Art. 26

Counterclaim

A counterclaim must be raised with the answer. With the agreement of the claimant it may also be raised at a later date.

Art. 27

Set-off

The Arbitral Tribunal also has jurisdiction over a set-off defense it the claim that is set off does not fall under the arbitration clause, and even if there exists another arbitration clause or jurisdiction clause for that claim.

Art. 28

Provisional and Conservatory Measures

If the parties have not expressly excluded this, the Arbitral Tribunal may order, on motion of a party, provisional or conservatory measures in accordance with Art. 183 of the Private International Law Statute.

Art. 29

Beginning of Main Proceedings

For the complaint and the answer, and for the counterclaim and the answer to the counterclaim, if any, the procedure is in writing.

In the complaint, the prayers for relief and the value in litigation should be specified, and the factual and legal grounds should be given in detail; in the answer, the respondent must respond in detail to the claims made by the claimant. In these briefs, the proofs must be indicated with precision; witnesses must be identified by name; and the available documents must be submitted in the required number of copies, together with a schedule of documents.

After the above briefs have been submitted, as a rule a hearing is held with the parties in which the Arbitral Tribunal discusses the further proceedings with the parties.

Art. 30

Deadlines

The Arbitral Tribunal sets deadlines by indication the date of expiry.

A deadline is deemed to have been complied with if the submission has been posted before the deadline with the official mails in Switzerland or abroad, or was transmitted by telex or telefax. An advance is deemed to have been made timely if the instructions were given to the bank within the deadline, provided that the payment is credited within one month.

Art. 31

Extension of Deadlines

Requests for extensions of deadlines must be submitted before the deadline has expired. The extension requested should be specified.

Art. 32

Consequences of Failure to Submit a Brief or to Appear at a Hearing

If a party fails to submit a brief within the deadline or fails to appear at a hearing without adequate excuse, the Arbitral Tribunal may restore the deadline, set a new deadline or call a new hearing and specify the consequences of failure to comply.

If the party fails to comply once more, the Arbitral Tribunal may deem the factual allegations of the other party to be undisputed or may investigate the matter on its own.

Art. 33

Continuation and Conclusion of the Main Proceedings

To continue the main proceedings, the chairman sets a deadline for reply and rejoinder briefs, and for reply and rejoinder on the counterclaim, if any; or calls a hearing with the parties. For special reasons, further exchanges of briefs or hearings may be ordered.

With the receipt of the last brief, or with the last oral pleading the main procedure is concluded.

Art. 34

New Motions and Allegations

After the pleadings are closed, new or modified motions, allegations of fact, defenses and denials are no longer admissible.

At a later date the Arbitral Tribunal may, by exception, admit new or amended claims if the legal position of the other party is not appreciably worsened and the procedure is not unnecessarily lengthened.

The following new motions, allegations of fact, defenses and denials are exempted: :

Motions that have been prompted by the further proceedings.

Allegations of fact, defenses and denials that can be proved forthworth by documents already on record or newly submitted.

Facts that could not reasonably have been presented within the deadline.

Facts and legal arguments that the Arbitral Tribunal must take into account ex officio.

Allegations of fact and denial in response to questions by the arbitrators.

Art. 35

Proof Procedure

The Arbitral Tribunal makes its findings of fact in adversarial proceedings.

As a rule, it administers proof after the main proceedings are concluded, it may, however, start administering proof earlier.

Art. 36

Witnesses

The Arbitral Tribunal sets the rules for the testimony of witnesses. The Arbitral Tribunal may order the oral testimony of a witness. The witness is invited by the party that nominated it, at its own expense.

Art. 37

Capacity to Testify

Everybody, including parties and their officers, may be a witness. For the assessment of testimony, Art. 44 applies.

Art. 38

Right to Refuse Testimony

Testimony may be refused by a party's spouse, and the party's grandparents, parents, children, grandchildren, brothers and sisters, uncles, aunts, and cousins and the spouses of these relatives.

Moreover, a witness may refuse to testify against himself and refuse testimony which would infringe official or professional secrecy protected by criminal law, unless the witness has been freed of its secrecy obligation.

Art. 39

Hearing Testimony

Before the witness is heard it must be admonished to tell the truth and notified of the consequences of knowingly false testimony which may consist, under the Swiss Federal Penal Code in a sentence in penitentiary up to five years, or imprisonment.

The Arbitral Tribunal grants the parties an opportunity to question witnesses.

Art. 40

Local Inspection

The Arbitral Tribunal may make a local inspection to ascertain relevant facts.

The parties must tolerate such an inspection.

Art. 41

Expertise

Each party may submit written experts' reports.

The Arbitral Tribunal may, ex officio, or on motion of the party, question one or more experts in writing or orally. The parties must be given an opportunity to raise objections against the persons proposed as experts and may proffer questions to be asked of an expert.

The parties and persons who have been appointed as experts by the tribunal, or who have been proposed as such, may not communicate directly with each other.

Art. 42

Documents

Each party may call upon the other to supply the Arbitral Tribunal with specified documents relevant to the dispute between the parties. The Arbitral Tribunal may, in case of refusal, or on its own motion, order the presentation of documents.

Art. 43

Comment upon the Evidence

The parties must be given an opportunity to comment upon the evidence.

Art. 44

Assessment of the Evidence

The Arbitral Tribunal is free in assessing the evidence. It takes into consideration the conduct of the parties during the procedure, in particular a refusal to cooperate in the administration of proof.

Award

Art. 45

Amicable Settlement

With the agreement of the parties the Arbitral Tribunal may, at any stage of the proceedings, seek an amicable settlement.

If the parties have reached an amicable settlement, the Arbitral Tribunal, on motion of a party, issues an award embodying the settlement. If there is no such motion, the sole arbitrator orders or the Arbitral Tribunal issues a decision declaring the procedure closed through amicable settlement.

Art. 46

Deliberation and Vote

The three-person Arbitral Tribunal deliberates in closed chambers and decides by simple majority.

If there is no majority, the chairman decides alone; he may not award more than the highest motion of the other arbitrators, nor less than the lowest.

Art. 47

Form and Content of the Award

The award must be made in writing and signed by all arbitrators, but the signature of the chairman is sufficient.

It contains:

the name of the arbitrators;

the seat of the Arbitral Tribunal;

the designation of the parties;

the relief prayed for by the parties;

the findings of fact and the reasons of law for the decision, and as the case may be, the considerations ex aequo et bono, unless the parties have expressly waived this requirement;

the decision on the merits;

the decision as to the amount and allocation of arbitration costs;

the decision as to the amount of, and obligation to pay costs;

date of the award.

If the procedure is ended without a decision on the merits, the sole arbitrator or the Arbitral Tribunal declares this through a closing order, or decision.

Art. 48

Issuance of the Award

The arbitral award is issued by notification to the parties.

Art. 49

Finality

The award is final with its issuance.

The arbitral award may not be challenged if none of the parties has its seat, habitual residence or a place of business in Switzerland and they have, by an express declaration in the arbitration agreement, or in a later written agreement excluded all challenge of the arbitral awards. (Art. 192 PIL)

Otherwise, the award may be challenged only on the grounds enumerated in Art. 190 subs. 2 and 3 of the Private International Law Statute.

Art. 50

Storage and Deposit

A copy of the award and the file, unless given to the parties, shall be kept for at least ten years by the Zurich Chamber of Commerce.

If a party wishes a deposit of the decision with the "Obergericht des Kantons Zürich" it must provide for this itself at its own costs. The Arbitral Tribunal provides for this purpose, on request, an additional copy of the award, or a certified copy.

Art. 51

Confidentiality

All participants in the proceedings must keep the proceedings and the award confidential towards third parties not concerned, and towards the public in general.

Publications on individual arbitral proceedings by participants are possible only in neutralized form and with previous permission by the President of the Zurich Chamber of Commerce.

Costs and Fees

Art. 52

Fees of the Zurich Chamber of Commerce

For its administrative expenses in connection with the appointment of an Arbitral Tribunal the Zurich Chamber of Commerce charges a fee at the initial stage of the arbitral proceedings in accordance with the applicable fee schedule.

Art. 53

Cost of the Arbitral Tribunal

The members of the Arbitral Tribunal receive their fee and expenses out of the arbitration fee set in the award in accordance with the applicable fee schedule of the Zurich Chamber of Commerce. If a secretary was appointed with the consent of the parties, half of the fee for an arbitrator is charged.

The expenses and the cost of assistants must be paid separately unless they were borne directly by the parties.

Art. 54

Advance for Costs

The sole arbitrator, the Arbitral Tribunal or the chairman my order the payment of one or several deposits by the parties to secure the costs of the procedure.

If the advance carries interest, it is added to the principal.

Art. 55

Failure to Pay the Advance

If a party fails to pay the advance ordered, the other party may choose to advance the arbitration costs or renounce the arbitration. If it renounces, the parties are no longer bound to the arbitration agreement with respect to the particular dispute.

Art. 56

Allocation of Costs

The costs of the proceedings are, as a rule, borne by the losing party. If no party wins totally, the costs are allocated proportionately.

The Arbitral Tribunal may, for special reasons, depart from this rule, especially if the proceeding became without object or if a party caused unnecessary costs.

Art. 57

Compensation of Attorneys' and Parties' Costs and Expenses

As a rule, each party must compensate the other for costs and expenses, in proportion to arbitration costs it has, itself, been charged with.

Before it renders its award, the Arbitral Tribunal sets a deadline to the parties to submit a statement of their costs. It also takes into consideration as cost, the registration fee paid to the Zurich Chamber of Commerce.

Art. 58

Use of the Deposits

Out of all deposits including the accumulated interests, the arbitration costs are paid first. A surplus is paid to the representatives of the parties for their clients, or directly to the parties if they are not represented.

If the cost were paid in full, or in part, from a advance that was made by a party against whom they were not awarded, the Arbitral Tribunal must award a corresponding claim for reimbursement to the party against whom the cost were awarded.

Final and Transitory Provisions

Art. 59

Entry into Force

These International Arbitration Rules were passed by the board of the Zurich Chamber of Commerce on October 5, 1988. They enter into force on January 1, 1989 and are applied independently from the time of the making of the arbitral agreement to all arbitrations which were commenced after that date, even if the arbitral agreement mentioned expressly earlier arbitration rules of the Zurich Chamber of Commerce.

Art. 60

Transitory provision

Arbitrations which were pending at the coming into force of these international arbitration rules before the Arbitral Tribunal of the Zurich Chamber of Commerce are conducted according to the provisions of the Conciliation and Arbitration Rules of the Zurich Chamber of Commerce of July 1, 1985, unless the parties agree that the new International Arbitration Rules apply.

Schedule of Arbitration Costs

To compare the costs of enforcing claims through arbitration and through ordinary litigation the following points should be weighed: Speed of procedure (see International Arbitration Rules, Articles 2, 16, 17, 18, 49), number of arbitrators (Article 10), currency of award and interest (no restrictions, question of the applicable law, Article 4), attorney's cost (no requirement to use Swiss attorneys, article 24), compensation of attorney's and parties' costs (Article 57), costs of witnesses (Article 36), place of hearings and meetings (Article 6), experts reports (Article 41), discovery of documents (as a rule, no discovery of documents, Article 42), minutes of hearings (not required, Article 23), translation and interpretation cost (language free, Article 22), actual arbitration costs (see the following schedule of arbitration costs), enforcement costs.

1. Registration Fee

Sfr. 3 000.- (International Arbitration Rules, Article 52). This blanket fee covers: Expenses and fee to appoint the chairman, to establish a list of four potential arbitrators, to appoint substitute arbitrators, to transmit the file to the Arbitral Tribunal, initial order for directions of the Arbitral Tribunal, correspondence to the appointment of the Arbitral Tribunal, possible closing order of the Arbitral Tribunal if advances are not paid, contribution to the general cost of Zurich Chamber of Commerce arbitration.

2. Arbitration Fee

Fee for the activity of the Arbitral Tribunal from the initial order for directions to the force of law of the award or closing order, and, depending on the case, additional fee of the Zurich Chamber of Commerce.

2.1 Normally, the arbitration fee is computed on the basis of the following chart, taking into consideration the responsibility, the difficulty of the case and the required investment of time:

For calculation of the value in dispute, the interest claims are not considered. Should they be higher than the principal sum, then they replace the latter in calculating the value in dispute. Principal claim and counterclaim are added. The value in dispute is further increased by the amount of set-off defenses of non-connected claims to be evaluated by the Arbitral Tribunal. Other currencies are converted into Swiss Francs at the average exchange rate between the exchange rate when the arbitration was begun and the exchange rate when the award was rendered.

2.2 The arbitration fee must, however, in all cases be such that the arbitrators receive an hourly fee of at least Sfr. 200.- or Sfr. 5.- per Sfr. 1 000 000 of the value in dispute, and at most Sfr. 500.-. For the hourly fee, the actual time worked on the arbitration is relevant, plus travelling time that cannot be charged to other clients of cases.

2.3 The fees are distributed within the Arbitral Tribunal according to the unanimous decision of the Arbitral Tribunal.

If there is none, the distribution is 40 per cent for the chairman, and 30 per cent each for the other two arbitrators if they have cooperated in drafting interim and the final reasoned award. In all other cases, particularly if the procedure end without a final reasoned award, 50 per cent for the chairman and 25 per cent each for the other two arbitrators.

3. Arbitrators' Expenses

3.1 The expenses of the arbitrators are the actual outlays, specifically for: travel (business class, taxi), hotel, meals (in the home city only if among arbitrators), telephone calls, telefax, postage, courier service, photostat copies, secretarial services, use of databanks, court reporters, translators an interpreters, rental of meeting rooms and simultaneous interpretation equipment.

3.2 If an arbitrator bears certain cost himself or is charged with them (as, for instance, in a law firm) he may be compensated by the following lump sums: Meeting rooms Sfr. 500.- per day, secretariat Sfr. 1000.- per day, photostat copies, including personnel cost share, Sfr. 1.- per copy, automobile kilometre Sfr. 1.-.

4. For the fees and expenses of the arbitral supervisory commission the above provisions apply by analogy.

5. This Schedule of Arbitration Costs may be changed at any time with immediate effect by a decision of the Zurich Chamber of Commerce.