Switzerland updates

Arbitration & ADR

Contributed by Tavernier Tschanz
Award set aside for lack of jurisdiction
  • Switzerland
  • May 10 2018

In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the arbitral tribunal had wrongly accepted jurisdiction. Once the existence of an arbitration agreement is established, its scope and content are broadly construed under the assumption that, if they chose to enter into an arbitration agreement, the parties intended to have an arbitral tribunal with broad jurisdiction.

Award set aside for lack of consent to arbitrate
  • Switzerland
  • February 22 2018

In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the parties had not consented to submit their dispute to arbitration. The decision shows the importance of the distinction between a subjective and objective interpretation. Awards should thus clearly identify for each finding of contractual interpretation whether it stems from subjective or objective interpretation.

Supreme Court reconfirms requirements for appointment of independent tribunal expert
  • Switzerland
  • December 07 2017

In a recently published decision, the Supreme Court rejected a challenge on the basis that the arbitral tribunal's refusal to appoint a tribunal expert was not a violation of the applicant's right to be heard. With respect to the annulment proceedings and grounds for annulment, this decision seems to express limitations to the formal nature of the right to be heard in adversarial proceedings, at least in respect of the right to adduce evidence.

Supreme Court rules on waiver of challenge
  • Switzerland
  • November 30 2017

In a recently published decision, the Supreme Court held that an arbitration clause contained a valid waiver of challenge against the award. The court also held that such a waiver extended to the applicant's subsidiary request for revision. When interpreting arbitration clauses to determine whether they contain such a waiver, the term 'appeal' should be understood as referring to the remedy that parties have against an award in Switzerland, namely the challenge proceedings.

Supreme Court partially annuls award for violation of right to be heard
  • Switzerland
  • September 14 2017

In a recently published decision, the Supreme Court partially annulled an award on the grounds that the arbitral tribunal had failed to take into account the claimant's argument in support of one of its prayers for relief. The dispute arose in connection with a tourism project regarding the construction and operation of a hotel and casino in the West Bank. The agreement was governed by Swiss law and provided for arbitration in Zurich.


Aviation

Switzerland and European Union to link emissions trading systems
  • Switzerland
  • December 06 2017

In order for Switzerland and the European Union to recognise each other's emission allowances through a bilateral agreement, Switzerland is planning to include aviation in its existing emissions trading scheme (ETS) and to link the Swiss and EU ETS. The agreement is scheduled to be signed by the end of 2017, provided that ratification is agreed by the EU and Swiss Parliaments. Once the link between the EU and Swiss ETS is operational, prices for emission allowances should converge.

'Stop the clock' decision does not infringe principle of equal treatment
  • Switzerland
  • March 01 2017

In a recent case, the European Court of Justice (ECJ) found that the 'stop the clock' decision does not infringe the EU principle of equal treatment. According to the ECJ, European law imposes no obligation on the European Union to the effect that all third countries, including Switzerland, must be treated equally. It follows that the principle of equal treatment does not apply to the moratorium on the requirements to surrender emissions allowances.

Does Sturgeon ruling apply in Switzerland?
  • Switzerland
  • January 04 2017

The Bulach District Court recently held that the European Court of Justice (ECJ) Sturgeon decision does not apply in Switzerland. While the Bulach court noted that Switzerland adopted the Air Passenger Rights Regulation by virtue of the 1999 EU-Switzerland Agreement on Air Transport, it had doubts over whether Swiss courts must also follow ECJ case law regarding the regulation.

Seaplane pilot found guilty of manslaughter
  • Switzerland
  • November 09 2016

The Supreme Court recently dismissed a pilot's petition to set aside the Bern Appellate Court judgment that he was liable for a trainee pilot's death in an aircraft accident on the basis of negligence or recklessness. The judgment is a reminder that, despite widespread criticism against the criminalisation of aircraft accidents, aviation is far from immune from criminal prosecutions. However, the judgment is not entirely persuasive.

Preventing aircraft accidents through occurrence reporting
  • Switzerland
  • July 27 2016

Switzerland recently adopted EU Regulation 376/2014, which aims to prevent accidents through the reporting of occurrences in civil aviation. The regulation seeks to encourage reporting by recognising the 'just culture' concept, which establishes that aviation professionals should not be punished for actions that are commensurate with their experience and training, but under which gross negligence, wilful violations and destructive acts are not tolerated.


Banking

Contributed by Meyerlustenberger Lachenal
FINMA publishes supervisory notification on token sales and ICOs
  • Switzerland
  • October 20 2017

The Swiss Financial Market Supervisory Authority (FINMA) recently published a supervisory notification on token sales and initial coin offerings (ICOs). It also announced that it was examining whether several ICOs or their corresponding business models violate supervisory provisions. A FINMA press release cited the marked increase in ICOs carried out in Switzerland in recent months as a reason for its action.

FINMA implements new fintech rules in circular on public deposits with non-banks
  • Switzerland
  • September 22 2017

The revised Banking Ordinance of April 30 2014 regarding new financial technology (fintech) regulations recently entered into force. The purpose of the proposed revisions is to enhance the competitiveness of Switzerland as a major fintech hub and to create an appropriate regulatory framework for fintech companies providing services outside traditional banking business by taking into account the specific risk-profile of their business models and service offering.

Government adopts first part of revised fintech rules to ease regulatory framework
  • Switzerland
  • July 14 2017

The Federal Council recently adopted an amendment to the Banking Ordinance scheduled to enter into force on August 1 2017. Following the announcement of the revised rules, the Swiss Financial Market Supervisory Authority published a guidance note regarding the new rules on public deposits. The revision will reduce some of the barriers to market entry for financial technology firms.

Federal Council – banking deposit protection scheme and segregation of custody assets
  • Switzerland
  • July 07 2017

The Federal Council recently announced its intention to strengthen the existing deposit protection scheme through a series of different measures. The council also intends to strengthen the regulations on the protection of securities and other assets deposited by clients with a bank or securities dealer by introducing a new obligation to keep those assets segregated from other clients' assets on a sub-custodian level, to the extent that the chain of custody is in Switzerland.

Federal Council proposes revisions to boost fintech innovations
  • Switzerland
  • April 28 2017

The Federal Council recently initiated a consultation procedure on new financial technology (fintech) regulations. The revised provisions ensure that barriers to market entry for fintech firms are reduced and that Switzerland's competitiveness as a financial centre is maintained. The consultation will end on May 8 2017. The proposed amendments to the Banking Act and the Banking Ordinance aim to ease the regulatory framework for innovative fintech companies, while taking into account potential risks.


Capital Markets

Contributed by Niederer Kraft Frey
New Swiss prospectus regime in the making
  • Switzerland
  • May 15 2018

As part of Switzerland's efforts to meet EU equivalence requirements, the Swiss legislature is working on a new federal Financial Services Act. Under the act, which may enter into force as early as mid-2019, a comprehensive and harmonised prospectus regime will be introduced and will be applicable to all public offerings of financial instruments and all securities admitted to trading on a trading platform in Switzerland.


Company & Commercial

Contributed by BADERTSCHER Rechtsanwälte AG
Shareholders' agreements for closely held companies under Swiss law
  • Switzerland
  • November 13 2017

Shareholders of closely held companies often mutually agree on additional contractual rights and duties. However, the company itself cannot be a contract party to a separate shareholders' agreement. Apart from that legal restriction, such shareholders' agreements usually benefit from the contractual freedom of the parties. A recent Federal Court decision confirmed that such agreements may be recharacterised as abusive or contrary to the principle of good faith.

Interpretation of company articles in Sika takeover battle
  • Switzerland
  • May 22 2017

A recent Zug Cantonal Court decision sheds light on the way that Swiss company articles of association must be interpreted under Swiss company law in cases in which they are not only applicable internally among a few shareholders, but also have an effect on third parties. The decision confirms that the observation of merely the letter and not the spirit of company articles by a company board or majority company shareholders in a general meeting can even amount to an abuse of law.

New Federal Court decision on business judgement rule
  • Switzerland
  • September 05 2016

A recent Swiss Federal Court decision clarified the circumstances under which the personal liability of board members or managers of a Swiss company for their business decisions and omissions can be reduced by applying the so-called 'business judgement' rule or, if the related prerequisites are not met in a particular case, based on other grounds.

Defects in company organisation caused by deadlock
  • Switzerland
  • March 07 2016

The Federal Supreme Court recently clarified how to deal with defects in company organisation caused by deadlock between two equal shareholders. For the first time the court has confirmed that courts are authorised to order a share auction in such cases. However, it is strongly recommended that such a harsh outcome be avoided by installing suitable measures to solve conflicts from the outset.

New anti-money laundering rules affect bearer shares in Swiss companies
  • Switzerland
  • October 12 2015

On July 1 2015 a new regime for bearer shares in Swiss companies was enacted, introducing new legal obligations for company boards and shareholders and severe penalties for cases of non-compliance. To achieve transparency the Code of Obligations established a general duty for all owners of bearer shares in non-listed Swiss companies to disclose their ownership, identity and address to the company within one month of their acquisition.