How To Avoid The Res Judicata-«paradox»

The Swiss Federal Tribunal confirms its long-standing jurisprudence, according to which the res judicata effect of arbitral awards and state court decisions is limited to their operative part. Similarly to state courts, arbitral tribunals are not bound by the considerations of previous decisions, despite any – in the words of the Swiss Federal Tribunal – «paradoxical» consequences this may entail. For the avoidance of any such «paradoxical» consequences, parties should be allowed to rely on requests for declaratory relief. When future proceedings are already on the horizon, requests for declaratory relief are legitimate and necessary, and should not be rejected as inadmissible.

I. Background