Switzerland updates

Arbitration & ADR

Contributed by Tavernier Tschanz
Arbitral jurisdiction to decide claims secured by a retention right confirmed
  • Switzerland
  • 26 July 2018

The Supreme Court recently confirmed its jurisdiction to decide claims secured by a retention right as provided for by Swiss law. The court found that even if the arbitration agreement rather restrictively referred to disputes arising out of the mandate agreement, it had to be understood in good faith as also encompassing disputes in relation to the conclusion and termination of that agreement.

Award set aside for lack of jurisdiction
  • Switzerland
  • 10 May 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
  • 22 February 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
  • 07 December 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
  • 30 November 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.


Aviation

Contributed by Proton Legal LLC
Liability regime governing JU-Air Junkers Ju-52 crash
  • Switzerland
  • 19 September 2018

While many legal issues surrounding the recent JU-Air Junkers Ju-52 crash have yet to be determined by the Swiss Transportation Safety Investigation Board, claims for passenger deaths will be governed by the EU-Swiss Air Transport Agreement. The agreement extends the scope of the liability provisions of the Montreal Convention for passenger deaths to domestic carriage by Community air carriers and requires advance payments to cover the victims' families' immediate economic needs after an accident.

Lufthansa and Swiss request to waive merger commitments must be re-examined
  • Switzerland
  • 04 July 2018

The General Court recently annulled the European Commission's rejection of a request by Lufthansa and Swiss International Air Lines to waive their fare commitments. The judgment clarifies the standard of review regarding assessments of requests for a waiver of merger commitments and is a reminder that, by virtue of the 1999 EU-Switzerland Air Transport Agreement, EU institutions have jurisdiction to assess competition concerns on air routes relating to the non-EU member state Switzerland.


Banking

Contributed by Meyerlustenberger Lachenal
New regulatory framework to strengthen integrity of Swiss financial sector
  • Switzerland
  • 14 September 2018

Swiss authorities are building a financial regulatory regime which considers the most important recommendations from the Financial Action Task Force's mutual evaluation report on Switzerland. To this end, the Federal Council has initiated a consultation on amendments to the Anti-money Laundering Act and the Swiss Banking Association has published its revised agreement on Swiss banks' code of conduct regarding the exercise of due diligence.

Swiss financial regulators ahead of EU curve
  • Switzerland
  • 17 August 2018

The European Parliament and the European Council recently expanded the scope of the EU anti-money laundering and combating the financing of terrorism regulations to cover cryptocurrencies and virtual currencies. While the directive will not apply directly to Switzerland, Swiss financial regulators remain ahead of the curve. Since 2016, the Financial Market Supervisory Authority has widened the scope of certain banking regulations relating to money transmitting and remitting services to cover virtual currencies.

SIX to launch fully integrated digital asset trading, settlement and custody service
  • Switzerland
  • 27 July 2018

The SIX Swiss Exchange recently announced that it is building a fully end-to-end and fully integrated trading, settlement and custody infrastructure for digital assets. The planned 'digital asset ecosystem' – the SIX Digital Exchange (SDX) – will put banks at the heart of transactions in the digital space and offer them a solid foundation to pursue their business strategies for digital and tokenised assets; however, their role in the future SDX remain unclear.

FINMA publishes supervisory notification on token sales and ICOs
  • Switzerland
  • 20 October 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
  • 22 September 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.


Capital Markets

Contributed by Niederer Kraft Frey
Revisiting shareholder disclosure duties in Swiss rights offerings
  • Switzerland
  • 21 August 2018

As in other jurisdictions, under Swiss law there are specific requirements relating to the disclosure of shareholdings and the actions of shareholders for companies whose equity securities are listed in whole or in part in Switzerland, including on Switzerland's main stock exchange, the SIX Swiss Exchange Ltd. This update aims to revisit and provide some practical guidance on certain shareholder disclosure duties in the context of Swiss rights offerings.

New stock exchange directive on use of alternative performance measures
  • Switzerland
  • 26 June 2018

The SIX Group Regulatory Board recently published a new directive on the use of alternative performance measures. The directive applies to all issuers whose equity securities are listed on the SIX Swiss Exchange and whose registered offices are in Switzerland. Issuers whose registered office is not in Switzerland also fall within the scope of the directive if their equity securities are listed on the SIX Swiss Exchange, but not in their home country.

New Swiss prospectus regime in the making
  • Switzerland
  • 15 May 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
  • 13 November 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
  • 22 May 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
  • 05 September 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
  • 07 March 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
  • 12 October 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.