Newsletter-21

172 NEWSLETTER 2016 concluded that even though DAB procedure is a mandatory prerequi- site parties do not have to fulfill it in case it is an abuse of rights. This approach is abandoned in the Decision. Another important consequence of the Decision is that it shows the sanction for non-compliance with a prerequisite of arbitration which is considered appropriate and right by the Court which was unsettled under Swiss Law. Non-compliance with a multi-tier dispute resolu- tion clause is disputed under Swiss Law. The Court in its previous decision numbered 4A_18/2007, emphasis that there are two possible consequences for non-compliance with a prerequisite for arbitration. The Court stated that deciding on damages is not an appropriate con- sequence considering that it could be difficult to prove the damages; non-compliance with a multi-tier clause would not necessarily cause damages, besides even this solution is preferred the dispute would not be resolved. The Court further pointed out that in case the parties de- cide to arbitrate without an attempt to solve the dispute with the alter- native methods provided prior to arbitration, it is a risk that the arbitral tribunal rejects the claim. In case arbitral tribunal decides the request of arbitration as inadmissible or that the tribunal is incompetent, a new arbitral tribunal would need to be constituted which could make thing complicated. Additionally, there could be issues with regard to time limitations. Therefore the Court did not find that damages or rejection of the request of arbitration as suitable sanctions. With these following reasons the Court in line with the majority view in the Swiss doctrine decided that the appropriate sanction for non-compliance with the pre- requisite provided under a multi-tier dispute resolution clause as stay of the arbitration pending compliance with the conciliation procedure.