Facts

Parties and proceedings: The appellant (defendant) [A.A.] and the respondent (plaintiff) [B.A.] are brothers and sons of [C.A.] . The appellant was represented by attorney Dr. Hansjörg Stutzer. This is a civil law appeal in domestic arbitration (subject matter) against the order of the arbitral tribunal seated in Zurich dated 15 October 2020 (AR.2020.3).

Agreement and arbitration clause: On 4 June 2014, father and son concluded an agreement, which was approved by the plaintiff with the notation 'with the consent of [B.A.] '. Item II/22 concerns a property in Brugg, in which the plaintiff and another brother were granted a time-limited purchase option until 31.12.2020. Item III/2 provides that disputes are to be resolved exclusively and bindingly by an arbiter; Dr. [G.] , attorney in Brugg, was designated as arbiter, and in case of impediment, his office successor. Recourse to state courts is excluded.

Course of proceedings:

  • 20 December 2019: The plaintiff approached the original arbiter; it is disputed whether item II/22 grants him a right to acquire ownership of two properties.
  • 6 January 2020: The original arbiter accepted the office and appointed attorney [H.] as secretary.
  • 28 January 2020: Defendant's challenge motion against the original arbiter; motion for stay. On 12 May 2020 the arbiter stayed the proceedings.
  • 20 August 2020: The Obergericht of the Canton of Aargau upheld the challenge.
  • 24 September 2020: The original arbiter notified that his office successor was [H.] and forwarded the files.
  • 28 September 2020: The defendant requested [H.] to return the files, since the original arbiter was still practising as an attorney, no office successor existed, and a challenged arbitrator could not transfer the proceedings.
  • 15 October 2020: [H.] constituted himself as sole arbitrator, lifted the stay, and dismissed the plea of lack of jurisdiction.

Requests: The appellant requested annulment of the order and a declaration that the sole arbitrator lacked jurisdiction; additionally suspensive effect, which was initially granted by order of 17 November 2020 through refraining from enforcement measures. The respondent requested dismissal. The arbitrator requested dismissal and the interim prohibition of further orders as well as of a merits award. A motion for stay by the respondent was dismissed on 16 April 2021.

Grievances of the appellant: (1) Violation of the right to be heard, as the arbitrator decided directly without giving the parties an opportunity to comprehensively respond; (2) [H.] was not the office successor, since an actively practising attorney cannot have an office successor, and Art. 12 FMLA does not require this; (3) the original arbiter was not 'impeded' but removed; (4) [H.] was biased and lacked independence, which is why the arbitration agreement is pathological.

Considerations

Admissibility and appealability: An appeal to the Federal Supreme Court is available against the award in domestic arbitration (Art. 389 para. 1 CPC). An interim decision is appealable under Art. 392 lit. b CPC only on the grounds of Art. 393 lit. a and b CPC, namely in case of improper appointment or composition of the arbitral tribunal as well as an incorrect decision on jurisdiction. Further complaints under Art. 393 c-e CPC are admissible insofar as they relate to the appointment or jurisdiction (BGE 140 III 477 consid. 3.1).

Constitution and interpretation of the arbitration agreement: The arbitral tribunal decides on the proper constitution by interim decision (Art. 359 para. 1 CPC). The interim decision on lawful constitution is separately appealable; the Federal Supreme Court examines which requirements apply to the arbitrator under law, the arbitration agreement or the arbitration rules. Whether a pathological arbitration agreement covers a particular substitute appointment remains for the arbitral tribunal to decide. The contested order decided the disputed question (continued existence of an office successor despite ongoing attorney activity) to the detriment of the appellant; it is therefore an appealable interim decision.

Grounds for challenge: Grounds for challenge under Art. 367 para. 1 CPC (prior involvement, lack of independence) must be raised in the challenge procedure under Art. 369 CPC and cannot be directly contested by appeal against the interim decision on constitution. The appellant has not filed a challenge against [H.] , so he cannot derive anything from the grounds for challenge. Insofar as he disputes the actual designation as office successor (Art. 367 para. 1 lit. a CPC), this question is to be clarified in the challenge procedure; the court does not enter into it.

Right to be heard: The Federal Supreme Court acknowledges that the right to be heard may have been violated by the direct issuance of the order. A violation of the right to be heard is, however, only relevant if the appellant shows which submissions…