This article examines the civil law principle of iura novit curia and its relationship with the parties' right to be heard in international arbitration, with a particular focus on recent Swiss case law. The principle of iura novit curia empowers arbitral tribunals in an arbitration seated in Switzerland to apply the law ex officio, without being limited to the legal arguments pleaded by the parties. The parties do not have a specifically protected right to be heard on the arbitral tribunal's legal assessment unless the tribunal intends to base its decision on a rule of law or legal concept the parties neither have invoked nor could have anticipated as relevant, i.e. unforeseeable legal grounds. Recent case law has consolidated and further refined the strict requirements that need to be fulfilled in order for the Swiss Federal Tribunal to set aside an award on the basis of unforeseeable legal grounds. The Federal Tribunal's restrictive practice is consistent with the limited judicial control over arbitral awards available under the Swiss Private International Law Act. However, for reasons of transparency and the parties' trust in the conduct of the proceedings, the authors submit hat arbitral tribunals should apply a more generous standard and grant the parties a right to be heard whenever they intend to rely on legal grounds the parties did not plead. Finally, the article raises the question whether the principle of iura novit curia not only vests the arbitral tribunal with the power to apply the law ex officio, but also imposes a corresponding duty on the tribunal.
ASA Bulletin