Litigation and enforcement in Switzerland: overview
A Q&A guide to dispute resolution law in Switzerland.
The country-specific Q&A gives a structured overview of the key practical issues concerning dispute resolution in this jurisdiction, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals.
To compare answers across multiple jurisdictions visit the Litigation and enforcement Country Q&A tool.
This Q&A is part of the global guide to dispute resolution. For a full list of jurisdictional Q&As visit www.practicallaw.com/dispute-guide.
Main dispute resolution methods
In Switzerland, large commercial claims are usually brought before the ordinary courts or settled through arbitration.
Mediation is sought to a lesser extent (see Question 30). The cantons of Zurich, Berne, Saint Gallen and Aargau have long established specialised and highly regarded commercial courts and high settlement rates (Handelsgericht) (see Question 3).
Ordinary proceedings before the Swiss courts are adversarial in nature. The court manages the timeline and the evidence procedure. It forms its opinion based on its free assessment of the evidence taken. A claimant will succeed with its claim if it can demonstrate a preponderant probability of its entitlement.
Limitation periods are a matter of substantive civil law, most of which are found in the Code of Obligations (CO).
The CO provides for the following limitation periods:
A general statutory limitation period of ten years for all claims (unless federal law prescribes a different limitation period).
Five years for claims which by their nature require quick settlement, such as claims:
for rent, interest or other periodic payments;
by tradesmen, craftsmen and for medical treatment;
relating to the sale of foodstuffs and payments for board and lodging;
relating to the work of legal counsel and notaries;
One year for tort claims. The period is calculated from the time the injured person becomes aware of the damage and of the identity of the person liable. A tort claim will become unenforceable owing to the statute of limitations after ten years from the date of the action causing the damage.
Claims based on unjust enrichment also become time-barred after one year.
The Federal Government has made proposals to simplify and harmonise the limitation periods. The proposal provides for tort and unjust enrichment claims to become time-barred after three years from acquiring knowledge of the damage and tortfeasor, or the enrichment event, respectively. The absolute limitation period for personal injury claims should be extended to 30 years from the damaging event (or end of the damaging event).
The Code on Civil Procedure prescribes a double instance system within the judiciary of the cantons, under which all cantons must establish a higher court for first (full) appellate review of first instance cantonal judgments. First and second instance courts are usually comprised of a three member bench. There are no trials by jury.
The highest court in Switzerland is the Federal Supreme Court (Supreme Court), which can review, in law, final judgments of the cantonal high courts.
Exceptions to the principle of double instance at cantonal level apply in the following circumstances.
Under the Code on Civil Procedure, the cantons can establish a Commercial Court as a sole cantonal instance to hear commercial disputes. These decisions are appealable only to the Supreme Court. A dispute is deemed commercial if all of the following conditions are satisfied:
The claim concerns the commercial activity of at least one of the parties.
The decision is appealable to the Supreme Court, that is, the amount in dispute is at least CHF30,000.
The parties are registered in the Swiss commercial register or a similar foreign registry. Where only the defendant is registered in the commercial register, a claimant can choose to lodge a suit before the Commercial Court or with the ordinary first instance courts.
Sole cantonal instance
As a matter of federal law, the cantons must designate within their court system a court of exclusive first instance jurisdiction for disputes relating to certain specialised areas of law, such as:
Certain intellectual property rights.
Competition law and unfair competition.
The use of company names.
Claims against the federal government.
Claims relating to collective investment schemes.
The federal legislator has also established the Federal Patent Court to serve as a court of exclusive first instance jurisdiction for the whole of Switzerland in relation to patent infringement and patent validity matters.
The answers to the following questions relate to procedures that apply in the ordinary civil courts.
Rights of audience
Rights of audience/requirements
In principle, Swiss courts do not require a party to be represented by an attorney. However, owing to the complexity of procedural rules, the vast majority of parties in commercial disputes seek professional counsel to assist them.
Attorneys registered with one of the cantonal attorney registers can appear before any Swiss court. To register, attorneys must pass the bar exam in one of the Swiss cantons.
Citizens from an EU member state or the European Free Trade Association (EFTA) who have registered with an EU/EFTA attorney register can appear before Swiss courts either:
Temporarily, based on the freedom to provide services. The EU/EFTA attorney is free to provide services without registration if done for 90 days or less per year in Switzerland. Professional activities lasting longer require the EU/EFTA attorney to co-operate with a registered Swiss attorney.
Permanently, if they register with the attorney register at the place where they practise. The EU/EFTA attorney can then practice freely, provided he appears before the Swiss court under his original title.
An EU/EFTA attorney can also register in the attorney register and adopt the local title if he has practised in Switzerland for three years under his original title and has passed a qualification exam.
Fees and funding
Attorneys' fees can be freely arranged between lawyers and their clients and hourly rates are the norm. Contingency fees are not permitted. However, conditional fee arrangements providing for a bonus in the case of successful litigation are permitted as long as the base fee for the lawyer provides a reasonable income. Party costs are calculated according to cantonal statutory rules and depend on the value in dispute.
Parties usually finance litigation privately. If successful, a party may recover costs from its opponent. Cost calculations are based on statutory tariffs and may not fully cover actual expenses.
A party can apply to the court to waive its court fees and to have a state-funded attorney assist it if it does not have sufficient funds to cover proceedings in addition to its basic needs, and the court does not view the matter as futile. A new application must be submitted for appeals proceedings.
There are a few third-party funding providers in Switzerland. Their services usually involve handing over a share of the claimed amount in successful proceedings.
Legal insurance is increasingly popular. Several large, and some specialised, insurance companies offer insurance for litigation costs.
The Code on Civil Procedure requires civil law court proceedings and the delivery of judgments to be public. However, public interest in commercial cases is usually limited. Copies of judgments of the second instance courts and the Federal Tribunal can be requested by anyone and are frequently published online (in anonymised form). Briefs and documents filed by the parties and the court's deliberations are kept confidential. The court is authorised to partially or entirely exclude the public from certain proceedings (such as family matters) if this is in the public interest or, on application, in the protected interest of a concerned person (for example, trade secrets). Conciliations hearings are not open to the public.
There are no specific pre-action conduct rules, except that the parties must personally attend the conciliation hearing before the conciliation authority if both:
A conciliation hearing is required by statute.
Their place of residency or incorporation is in the same canton as the place where the conciliation hearing takes place.
Failure of the defendant to attend the conciliation hearing has no direct consequences but merely entitles the claimant to receive the authorisation to proceed and to bring its claim before the court. A party failing to institute compulsory conciliation proceedings will not be admitted by the court with its claim.
Court proceedings normally start with a request for a conciliation hearing before the conciliation authority, causing lis pendens (suit pending).
A claimant must file the lawsuit directly with the competent court without first requesting a conciliation hearing, among other things, in cases where:
The dispute must be brought before a sole cantonal instance (see Question 3, Sole cantonal instance).
Divorce proceedings are at stake.
Proceedings concerning certain actions filed under the Federal Debt Enforcement and Bankruptcy Act or are dealt with in summary proceedings (applications for provisional measures such as the seizure of property and freezing of bank accounts).
A court has ordered a claim to be filed within a certain time period.
A claimant can also forego the conciliation proceedings if the defendant has a foreign domicile.
The conciliation request must include the name of the defendant, the remedy sought and a general description of the matter in dispute. If the parties fail to agree on a settlement, the conciliation authority will issue the authorisation to proceed permitting the claimant to bring the dispute before the competent district court within three months. Failure to submit the statement of claim within three months has no res judicata consequence. However, a claimant would have to go through the conciliation procedure again before he can take the matter to court.
Notice to the defendant and defence
Once the claimant has submitted the statement of claim, the court sends a copy of the statement to the defendant and usually orders the claimant to advance the court fees. After payment, the court orders the defendant to file a statement of defence within 20 days. Filing periods can be extended twice on reasoned application for further periods of 20 days depending on the complexity of the matter.
If the defendant fails to submit a statement of defence in time, the court will either:
Grant a short extension to the defendant and, in the case of a repeated failure to submit a statement of defence, proceed to the main hearing.
If the matter is ready for decision, render its judgment.
A claimant has the right to reply to a statement of defence. The timing of reply and the method of presenting it depend on how the court intends to proceed in the matter. If the court deems it necessary, it can do one of the following:
Order the parties to file a written reply and rejoinder respectively.
Schedule a preparatory hearing where the parties submit their reply and rejoinder orally.
Directly proceed to the main hearing with the parties submitting their reply and rejoinder orally.
The parties can introduce new facts and evidence with their reply and rejoinder.
Litigants should be aware that pleading new facts and introducing additional evidence at the main hearing is not possible if a second exchange of briefs or a preparatory hearing with oral reply and rejoinder preceded the main hearing.
In relation to contentious facts, the court allocates the burden of proof according to substantive law and specifies which means of evidence will be permitted (for example, party statements, documents, witness testimony and expert opinions). On closing of the evidence hearing, the parties submit their closing arguments including a single rebuttal, following which the court renders its decision. At any stage of the proceedings, the court can propose the parties to hold settlement talks. The Commercial Court of the Canton of Zurich has a standing practice of holding settlement talks after the first exchange of briefs and manages to settle about two-thirds of all cases coming before it.
A defendant can file an application for a third-party complaint when filing the statement of defence or the reply in the original proceedings. In doing so, the defendant can submit a claim against a third party against which it believes it has a claim, should its defence against the original claimant fail. On filing of the application, the court will render an interlocutory decision on the admissibility of the third-party complaint.
If the court admits the complaint and the third party decides against taking part in the proceedings, it is later barred from invoking the defences that would have been available to it during the original proceedings with regard to the matters of fact on which the case is based. The matters of fact become binding on the third party when it is faced with a claim by the original defendant.
Forum selection clauses or an agreement to arbitrate between the third-party claimant and the third-party defendant, or statutory provisions providing for a compulsory forum as regards the subject matter of the third-party complaint, will render the third-party complaint inadmissible. All parties can appeal against the final judgment in as far as the verdict affects them.
Conditions for trial
A court will only hear a dispute if it enjoys jurisdiction (both in relation to the subject matter and locality), which it examines ex officio. The court also examines at the outset whether the suit has been properly lodged (that is, following conciliation hearings) and whether the correct type of proceeding (ordinary, summary or simplified proceeding) has been chosen. If any of these conditions are not satisfied, the claimant is normally granted a short period of time to rectify any remediable mistakes and to re-file the claim. Otherwise, the case is not admitted.
The court can, on application and at its discretion, render a judgment on a contested preliminary question (for example, jurisdiction or the standing of a party) if this may result in substantive cost and time savings. These judgments must be appealed immediately.
Unless an applicable treaty provides otherwise, the defendant can apply to the court to order the claimant to provide security for its costs if one of the following applies:
The claimant has no domicile or registered office in Switzerland.
The claimant appears insolvent.
The claimant still owes court or party costs from a previous trial.
Other reasons exist indicating that defendant's costs may be at risk.
International treaties may prohibit Swiss courts from requiring a claimant to secure costs. The Lugano Convention, for example, does not permit the court to order security for the defendant's costs if the claimant has no domicile or registered office in Switzerland.
Availability and grounds
Interim relief can be sought before proceedings begin or at any later stage of the proceedings. If interim relief is sought prior to lis pendens, the court sets a deadline for the petitioner to file suit (no conciliation proceedings required). Swiss law distinguishes between interim relief measures aimed at securing monetary claims and measures dealing with non-monetary matters.
Claims to money may be secured by applying for an attachment order under the Federal Debt Enforcement and Bankruptcy Act (see Question 13, Availability and grounds). All other interim measures are governed by the Code on Civil Procedure. For the latter, the applicant must credibly show, but not prove, both that:
There is a realistic and imminent threat of, or actual injury, causing irreparable harm unless the injunction is granted.
The underlying cause of action is likely to prevail on the merits.
The court can order the applicant to post security.
Interim relief can take the form of mandatory or prohibitory interim injunctions, such as:
A cease and desist order.
An order to perform an action or rectify a situation.
An order prohibiting a person from disposing of certain items.
An order that certain entries be taken on record in a public registry.
An order to a bank that certain bank accounts be frozen.
Normally, a request for interim relief is followed by a hearing at which the court renders its decision. In urgent cases, interim relief may be ordered by the court in ex parte proceedings, usually within 24 hours. If such order is granted, it is followed by an oral hearing at a short notice.
Mandatory interim injunctions are available, in addition to prohibitory interim injunctions (see above, Availability and grounds).
Right to vary or discharge order and appeals
Interim orders by a first instance court are subject to appeal to the cantonal high court. The defendant can request the discharge or modification of the order. A high court decision can be further appealed to the Federal Tribunal if either:
The appellant were otherwise to suffer harm, which would be difficult to rectify if the appeal was not granted.
The decision by the Federal Tribunal can immediately lead to a final decision, thereby avoiding long and costly evidence proceedings.
Availability and grounds
To secure monetary claims before a trial or in debt enforcement proceedings, creditors can apply for the attachment of a debtor's assets for the whole territory of Switzerland. Creditors must show to the court:
That they have outstanding debts against the debtor.
The existence of a statutory ground for attachment.
The existence of assets and their location.
There are six grounds on which attachment of assets can be sought (Federal Debt Enforcement and Bankruptcy Act):
The debtor has no permanent residence in Switzerland.
The debtor is attempting to conceal assets or is planning to leave Switzerland to evade the fulfilment of its obligations.
The debtor is travelling through Switzerland or conducts business on trade fairs, provided that the claim must be settled immediately.
The debtor does not reside in Switzerland and no other ground for attachment is available, provided that the claim has sufficient connection with Switzerland or is based on recognition of debt.
The debtor holds a provisional or definitive certificate of shortfall against the creditor.
The creditor holds a definitive enforceable title permitting him to have any objection by the debtor set aside (definitiver Rechtsöffnungstitel).
Unless the creditor has already commenced debt enforcement proceedings (Betreibung) or filed an action to obtain an enforceable title, he must do so within ten days of service of the copy of the attachment order. If the debtor objects to the summons to pay, the creditor must, within ten days of service of the objection, request the court to have the objection set aside or pursue his claim in ordinary court proceedings.
Attachment orders are granted by the court without notice to the other party. The other party must file an objection within ten days of learning of the attachment.
In the main enforcement proceedings (Rechtsöffnungsverfahren), the applicant must demonstrate that his title is valid. The debtor's challenges are limited to arguments that the claim has in the meantime been discharged, deferred or has lapsed.
If attachment is sought based on a decision rendered by a competent court of a Lugano Convention signatory state, the Swiss court seized with the request for attachment will in the same proceeding also render a decision on the enforceability of the foreign judgment without hearing the other party. The other party can then file an objection against:
The declaration of enforceability within 30 days (if resident in Switzerland) or 60 days (if resident in another Lugano Convention signatory state).
The attachment within ten days of learning of it.
Preferential right or lien
An applicant who has secured the attachment of assets does not enjoy preferential rights or lien in relation to the attached property. An applicant must follow the ordinary debt enforcement process like any other creditor. However, if another creditor demands seizure of the assets before the applicant is in a position to do so, the applicant automatically and provisionally takes part in the seizure of property.
Damages as a result
An applicant is liable for damages incurred by the debtor as a result of an unjust attachment order.
The court can demand that the applicant post security.
The final decision of the court can order the defendant to either:
Perform specific actions or desist from certain actions.
A declaratory judgment is also possible.
The amount of damages awarded to a claimant must compensate his loss (including interest) and cannot be punitive in nature. However, the court can, under certain circumstances, award reparations that do not correspond to the actual damage suffered. These remedies are limited to disputes involving bodily harm and emotional distress.
The standard of proof for damages does not differ from the standard of proof applied in other areas of law. A claimant will need to demonstrate a preponderant probability of the damages suffered in actual monetary terms. The court must be convinced, based on objective reasons, that the damages occurred in the claimed amount, and any doubts in this regard must be insignificant.
Parties to the trial and third parties must assist the court with the discovery of the facts of the case. Legal entities are subject to the same rules applicable to individuals.
Evidence is produced either with a legal brief or on order by the court. Pre-trial (precautionary) taking of evidence can be ordered by the court when the applicant shows prima facie evidence of an interest worthy of protection or has a statutory right to evidence. However, the applicant must pay for the court fees involved with the taking of evidence. There is no US style pre-trial discovery in Switzerland.
During trial, a party can request the court to order the other party or a third party to disclose certain specifically identified documents (written documents, drawings, plans, photographs) or electronic data in its possession. There is no distinction between documents held electronically or otherwise.
The court will grant such a request if it decides that the evidence is necessary to establish legally relevant facts of the case and will prescribe a deadline for the production of the requested evidence. General requests for document production are not permitted (no "fishing expeditions"). The burden of proof as to the concerned document's authenticity lies with the party wishing to draw a legal conclusion from the facts alleged in the document.
Trial parties, third parties and witnesses do not need to testify and are entitled to withhold documents if they can invoke a statutory privilege (for example, attorney-client confidentiality (see Question 17, Privileged documents)) or have a particularly close personal relationship to a party (for example, being directly related or married). A party refusing to disclose documents without justification cannot be sanctioned but may bear the consequences of adverse consideration of the evidence. Failure by a third party to co-operate with the court may be punishable by a fine.
A court can take evidence at any point during the proceedings if either:
The law provides for it.
The applying party can:
demonstrate that the evidence may no longer be obtainable later; or
invoke another interest worthy of protection.
Lawyer-client privilege only extends to lawyers registered in the cantonal lawyers register. There is no privilege for in-house counsel, however, all correspondence relating to, and prepared in the course of, a specific mandate to or from external professional counsel (including patent attorneys) is protected by privilege, irrespective of its location. This also applies to proceedings before the competition authorities and the Swiss Financial Supervisory Authority.
The notion of "without prejudice" is not a matter of statutory privilege, but a principle generally recognised by the courts when communication made in the context of genuine settlement negotiations is at issue (see below, Other non-disclosure situations).
Other non-disclosure situations
A party may be entitled to withhold documents if it has a particularly close relationship to the party to the proceedings (see Question 16).
During settlement discussions, parties frequently circulate proposals which they do not want to be used in subsequent court proceedings (without prejudice). Parties can maintain and need to indicate clearly that these documents are without prejudice to their position in later court proceedings if settlement negotiations fail. Courts respect the parties' agreement, provided their intention is clearly expressed in their earlier correspondence.
Examination of witnesses
Witnesses give oral evidence under the threat of criminal punishment if they give false testimony. If the witness fails to appear, he may be summoned or sanctioned with a fine. Witness statements are not common in Switzerland; however, in exceptional cases the court may admit a signed witness statement as a physical record. The court can obtain information in writing from a private person if it does not consider it necessary to examine this person as a witness.
Right to cross-examine
There is no specific right to cross-examine. However, following the initial interrogation by the judge, each party can put additional questions to the witness either:
Through the judge.
Directly to the witness, with authorisation by the judge.
However, these additional questions must not go beyond the issues on which the court heard testimony, and therefore solely serve to clarify the issues on which the court heard testimony. Questions that go beyond these issues, or repeat questions already asked by the judge, are not permitted.
The Code on Civil Procedure also allows a court to put witnesses against each other and against the parties.
Third party experts
Where the court comes to the conclusion that expert knowledge or a technical assessment of factual evidence is required, it can appoint one or several experts, if requested to do so by a party or of its own accord. The parties can express their opinion on the court's choice of an expert and make their own suggestions before the appointment, if requested to do so by the court. Any evidence, including where a party wants to rely on an expert witness, must be disclosed at the evidence stage at the latest.
Role of experts
Specialist opinions given by experts at the request of the parties are considered by the court as party explanations and have no added weight. Court-appointed experts, however, act on behalf of the court and are subject to the same rules on conflicts of interest as judges.
Right of reply
The parties can comment on the questions posed to the expert and request other or further questions to be posed to the expert. The parties are entitled to comment on the expert's conclusion and can under certain circumstances request the appointment of a new expert.
Costs for expert fees must be advanced by the party requesting the expert opinion. If both parties request expert opinion, the advance may be split equally among the parties. The court takes into consideration the burden of proof when deciding which party must advance the costs. Expert fees are added to the court fees at the end of proceedings and are borne by the unsuccessful party (see Question 22). Alternatively, they can be split proportionally among the parties, reflecting the parties' varying degrees of success.
Expert opinions as precautionary evidence
A motion for an expert opinion can be filed in a proceeding for the taking of precautionary evidence. This is in particular the case when the law grants the applicant such right or when the applicant shows credibly that the evidence is at risk or that the applicant has a legitimate interest. The costs for summary proceedings in such a case, as well as the cost for the expert opinion, must be borne by the applicant. Within the scope of the requested expertise, the adverse party can raise additional questions without cost implications.
Judgments rendered by a district court can be appealed to the higher cantonal court with the possibility of a further appeal to the Supreme Court if either:
The amount in dispute is at least CHF30,000.
A legal issue of major importance is at stake.
Judgments rendered by the Commercial Court (see Question 1 regarding the cantons that have established commercial courts) can only be appealed to the Supreme Court.
Grounds for appeal
The higher cantonal court has full review competence on questions of law and of fact. The Supreme Court's review is in general limited to breaches of federal law (see also Question 3).
Judgments of district courts must be appealed within 30 days. Judgments of the higher cantonal courts and those of the Commercial Courts must also be brought before the Supreme Court within 30 days. In summary proceedings, the time limit for bringing an appeal is only ten days.
Typical class actions are not possible under Swiss law. Claims must be brought by individual claimants.
Swiss law, however, permits associations and organisations to file claims on behalf of their members if they have made the protection of certain interests their aim. Where an injury to these interests is alleged, the association can start a claim against the parties causing damage and can request that either:
The damage be prevented or removed.
The court acknowledges that the harm has occurred.
Several claimants can file a suit against a single defendant. Depending on whether the claimants are required by law to proceed together or not, the Code on Civil Procedure contains differing provisions in relation to the effect of each claimant's submissions on other claimants.
In addition, several claimants basing their claims on the same set of material facts can bring their suits before the court individually and request a stay in all but one of the proceedings until a lead judgment is rendered by the court.
In 2014, the Parliament adopted a motion aimed at improving the instruments for collective redress (see Question 35).
The losing party is ordered to compensate the successful party for the costs of representation. If a party is successful in part, a proportionate payment is ordered.
Under the Code on Civil Procedure, the cantons have kept their competence to set the tariffs by which the cantonal courts calculate the court and party compensation fees. Therefore, court fees and party compensation fees may differ among the cantons. Litigants should be aware that the cantonal fee schedules:
May not necessarily be in line with lawyer's fees.
Give courts a wide discretion in setting their own fees and awarding compensation for costs.
Therefore, in practice, successful litigants will often only be compensated partially.
The Code on Civil Procedure only contains a few general rules on the matter; namely, it authorises courts to request advance payment of the expected court fees of a claim before starting proceedings. Additionally, the Code on Civil Procedure provides that the claimant may be ordered to post security (either in cash or in the form of a guarantee from a bank with a branch in Switzerland or from an insurance company authorised to operate in Switzerland) for the respondent's party costs. This is in particular the case where the claimant has no residence or registered office in Switzerland, or a possible payment of compensation for the respondent's party costs is at risk.
Accordingly, foreign claimants need to be aware that litigating in Switzerland normally requires payment of an advance of the expected court fees and posting of a security for the respondent's party costs at the outset, provided there is no treaty in place between the place of residence of the claimant and Switzerland (for example, the 1954 or 1980 Hague Conventions on Civil Procedure or International Access to Justice, or a bilateral agreement, excluding such requirement by reason of their not being domiciled in Switzerland).
In relation to appeals proceedings before the Supreme Court, the cost award is calculated according to a regulation issued by the court itself. The following factors, among others, are considered in deciding the final cost award:
The claim amount.
The complexity of the matter.
The duration and stages of the proceedings (pleadings, hearings, evidence and settlement negotiations).
Courts rarely take pre-trial offers into account.
Enforcement of a local judgment
Enforcement procedures depend on whether a party has been ordered to pay damages or perform a specific act. Judgments ordering the payment of damages are enforced under the Federal Debt Enforcement and Bankruptcy Act. The party with the judgment in its favour can start summary enforcement proceedings by requesting the court to set aside the opposition the defendant raised against the payment summons and to order the continuation of enforcement through the attachment of goods (for natural persons) or bankruptcy proceedings (for legal persons).
Judgments for specific performance are enforced under the Code on Civil Procedure and must also be requested in summary proceedings with the enforcement court at the place of residency (for natural persons) or at the place of registered office (for legal persons). Enforcement requests can also be brought at the place where these measures are to be executed or where the original judgment was rendered.
The claimant must submit the documents showing that his claim is enforceable. The judge then orders the obliged party to effect performance under threat of penal consequences and payment of a fine if performance is refused. The judge can also authorise the requesting party to retain a third party to substitute performance. The claimant is entitled to have his claim for specific performance changed into a claim for damages if the defendant continues to resist enforcement.
In all commercial disputes, the parties can choose a foreign governing law. However, certain matters are excluded from this principle:
Contracts over immovable property, in relation to which Swiss courts always apply the law applicable at the property's location.
Matters relating to consumers, employees and intellectual property rights are only subject to laws that have a connection to certain objective criteria (for example, the place of residency of the consumer, the place of employment, or the place of registration of the intellectual property rights).
A choice of law provision in a contract on the international sale of goods providing for Swiss law to apply may result in the application of the UN Convention on Contracts for the International Sale of Goods 1980 or similar treaties, unless those treaties have been specifically excluded by the parties.
The courts generally respect the choice of forum clauses within the scope of the relevant statutes and treaties. These clauses must be in writing and can relate to an existing or future dispute. However, there are also certain specific rules, for example:
Disputes concerning consumers must generally be filed with the competent court at the consumer's domicile, unless the consumer agrees for a specific judicial proceeding to a different jurisdiction.
Disputes concerning employees are heard by the competent court at the employee's domicile or at the place of employment.
Disputes concerning the rent of immovable property must be filed with the competent court at the place of the property in question.
International treaties take precedence over the statutory rules. The most important international treaty on jurisdiction is the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 2007. Under the Lugano Convention and subject to certain limitations (for example, in relation to consumer and insurance matters), the parties can either:
Conclude a jurisdiction agreement.
Include a jurisdiction clause in their contractual arrangements which provides that both:
a foreign country has jurisdiction (as long as the foreign country is a Lugano Convention member state);
the country having jurisdiction is not the defendant's place of domicile.
The local courts respect this practice.
When serving foreign procedural notices to parties in Switzerland, a foreign party must comply with international treaties governing international civil procedure matters and must make use of the means of judicial assistance. Switzerland is party to two major multilateral treaties:
HCCH Convention on Civil Procedure 1954 (Hague Civil Procedure Convention).
HCCH Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters 1965 (Hague Service Convention).
A number of bilateral agreements authorise direct contact between judicial authorities. There are also bilateral agreements that serve to complement the Hague Conventions. Where there is no international agreement, Switzerland automatically applies the Hague Civil Procedure Convention to the foreign requests that it receives.
The Hague Civil Procedure Convention requires the requesting party or the locally competent authority to use the consular channels to send the documents to be served to the consular representation in Switzerland, which then approaches the Swiss Federal Office of Justice to effect service on the party resident in Switzerland.
The Hague Service Convention requires parties to request their local authorities to forward requests for service according to a model request to the competent central authority in Switzerland. Each canton has its own central authority, which serves process on persons domiciled in its territory. The central authority approaches the competent court, which then serves documents by qualified postal delivery. As far as the law applicable in the country of the party requesting service permits lawyers to serve documents, these persons are recognised as judicial officers and can also approach the central authority directly. As it can prove difficult for the requesting state to know which of the 26 central cantonal authorities has jurisdiction, the Federal Office of Justice is also designated to be a central authority and passes foreign requests to the competent cantonal authorities.
Switzerland declared that it is opposed to the use in its territory of direct service through diplomatic or consular agents and any other direct form of service; accordingly, any judicial document must be served through the competent central authority.
To take evidence from a Swiss-domiciled witness, the rules of the multilateral treaties to which Switzerland is a member must be complied with, for example:
The HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 (Hague Evidence Convention).
The HCCH Convention on Civil Procedure 1954 (Hague Civil Procedure Convention).
A number of bilateral agreements authorise direct contact between judicial authorities. There are also bilateral agreements that serve to complement the Hague Conventions. Where there is no international agreement, Switzerland applies the Hague Civil Procedure Convention to the foreign requests that it receives.
Under the Hague Evidence Convention, the procedure is as follows:
The competent judicial authority of the requesting state transmits its letter of request to the central authority in Switzerland. The central authority's duties are assumed at cantonal level, while the Federal Office of Justice also acts as central authority.
The cantonal authorities then take evidence at the witness's place of domicile.
Under the Hague Civil Procedure Convention, the following procedure applies:
The competent authority of the state in which the request is made must transmit its request to its diplomatic representation in Switzerland.
The diplomatic representative of the requesting state in Switzerland then transmits the request to the Swiss Federal Office of Justice.
The Swiss Federal Office of Justice transmits the request to the competent local judicial authority in the canton where the witness is domiciled, which then takes the evidence.
The Hague Evidence Convention replaces Articles 8 to 16 of the Hague Civil Procedure Convention (Article 29, Hague Evidence Convention). Therefore, if a signatory state has concluded both treaties, the Hague Evidence Convention takes precedence.
Notably, the surrender of evidence located in Switzerland to foreign authorities or parties in violation of the applicable international conventions to which Switzerland is a party may constitute a violation of Articles 271 (prohibited acts for a foreign state) and 273 (economic intelligence service) of the Swiss Criminal Code or other special statutory provisions (such as banking regulation and data protection regulation). Switzerland made a reservation under the Hague Evidence Convention in relation to letters of request issued for the purpose of obtaining pre-trial discovery of documents as known in common law countries. Therefore, requests that are formulated in general terms and require the opposing party to indicate the documents in his possession with the aim of obtaining information that bears no relation to the case or in an attempt to discover evidence to substantiate a claim ("fishing expeditions") are rejected.
Switzerland also made a reservation with respect to the taking of evidence by diplomatic officers, consular agents and commissioners. This is only possible on authorisation by the Federal Government (but a lawyer does not require an authorisation when collecting evidence in Switzerland in the course of ordinary case preparation).
Enforcement of a foreign judgment
If the judgment was rendered by a court of a Lugano Convention signatory state, an enforcement application must be filed with the competent Swiss court, along with a copy of the judgment satisfying the conditions necessary to establish its authenticity and a certificate issued by the court that rendered the judgment (Annex V, Lugano Convention). The court must decide on such application in ex parte summary proceedings and declare the judgment enforceable immediately on satisfaction of the formalities under Annex V, without reviewing whether there are grounds to deny recognition and enforcement. The party against whom the enforcement is sought is not heard until the appeal stage.
If the judgment was rendered by a court of a state not party to Lugano Convention, the enforcing party must file with the competent court:
A complete and authenticated copy of the decision.
A confirmation that no ordinary appeal can be lodged against the decision or that the appeal is final.
For judgments rendered by default, an official document establishing that the defaulting party was duly summoned and that it had the opportunity to enter a defence.
The other party is entitled to a hearing and to introduce evidence. The competent court dealing with the matter may, on a party's request, order protective measures without hearing the other party. The court will deny recognition if:
It violates Swiss public policy.
Procedural guarantees considered to be fundamental in Switzerland were not adhered to in the foreign proceeding.
A judgment rendered in a state not party to the Lugano Convention is considered a final judgment within the meaning of the Federal Debt Enforcement and Bankruptcy Act. A local court can grant exequatur on a summary review of the matter.
Alternative dispute resolution
Large commercial disputes are usually settled through litigation or arbitration. Other ADR methods play a limited role, although mediation appears to have become more popular recently, as illustrated by an increasing number of organisations offering mediation services and training, or the adoption of the Swiss Rules on Commercial Mediation by the Swiss Chambers of Commerce and Industry in 2007 (www.swissarbitration.org/sm/en/rules.php).
Arbitration (but not necessarily other forms of ADR) is more common in international commercial disputes than in domestic disputes.
In contentious court proceedings, the court can recommend mediation to the parties at any time (see also Question 31). On joint application of the parties, the court may confirm a settlement reached through mediation during proceedings (Code on Civil Procedure). Such confirmation makes the mediation settlement equal to a court judgment. Settlements reached through mediation outside of court proceedings cannot be confirmed by the court.
Subject to mandatory conciliation in certain circumstances, ADR is not part of court procedures. Swiss courts cannot compel the use of ADR. However, courts are free to facilitate a settlement during court proceedings or to encourage parties to resort to mediation.
Where a conciliation hearing is mandatory under statutory provisions, the parties can jointly elect to use mediation instead. If a settlement cannot be reached, the conciliation authority will issue a writ permitting the claimant to proceed to the competent district court (see Question 9).
At all times during the court proceedings, parties can jointly elect to resort to mediation, thereby staying court proceedings.
To be enforceable in court, a multi-tier dispute resolution clause providing for pre-trial arbitration or conciliation/mediation should clearly set out the conditions (including time limits) for the arbitration or mediation proceedings. Non-compliance with pre-arbitral mediation under a multi-tier dispute resolution clause may result in an annulment of the arbitral award, as recently decided by the Federal Supreme Court. In this particular case, where arbitration was initiated without completing the pre-arbitration conciliation, the Federal Supreme Court not only annulled the award on jurisdiction, but also invited the arbitral tribunal to stay the arbitration and set a time limit for completing the conciliation procedure.
In mediation proceedings, the mediation agreement governs the procedural rules. The parties are free to choose any rules to govern the mediation process. In the absence of a provision relating to evidence, the mediator conducts the proceedings as he considers appropriate.
Mediation must be confidential, and statements and admissions of the parties cannot be used in court. The same applies in relation to evidence obtained during mediation. Mediators are entitled to refuse to testify on matters relating to the mediation proceedings.
It is unclear whether an agreement by the parties regarding confidentiality and non-admissibility of evidence stemming from mediation proceedings can be enforced in court.
In domestic arbitration, subject to the rules of the Code on Civil Procedure and international arbitration, the parties are free to agree on the procedural rules within the mandatory procedural limits (guarantees) prescribed by law.
Costs are borne by the parties, subject to their mediation agreement or the applicable or agreed on arbitration procedural rules (as applicable). For example, the Swiss Rules on International Arbitration, which can also be chosen for domestic arbitration, provide that the costs of the arbitration must in principle be borne by the unsuccessful party.
The following organisations, among others, offer ADR services in Switzerland:
Swiss Chambers' Arbitration Institution, which adopted the Swiss Rules on Commercial Mediation in 2007 (see www.swissarbitration.org/Mediation/Mediation-rules) and the Swiss Rules on International Arbitration in 2004 (as revised in 2012; see www.swissarbitration.org/Arbitration/Arbitration-Rules-and-Laws), the latter of which can also be chosen for domestic arbitration.
WIPO Arbitration and Mediation Center, a branch of the World Intellectual Property Organization established in 1994. This centre offers institutional mediation services for private parties (see www.wipo.int/amc/en).
Proposals for reform
The Swiss Parliament is currently considering a proposal to amend certain statutes of limitation (see Question 2). Whether the entering into force of the amended Brussels I Regulation will eventually result in a revision of the Lugano Convention is currently unknown. The 2007 revised Lugano Convention aimed to adapt and harmonise the 1988 Lugano Convention with the Brussels I Regulation. At least in relation to the recent amendments to the Brussels I Regulation, this parallelism was pierced.
The Swiss Parliament has referred a motion to the Federal Government to revise the current system of collective redress and introduce class actions. Whether the motion will be transposed into law remains to be seen.
The Federal Authorities of the Swiss Confederation
Description. The official state website of the Swiss Federation with links to government departments and current legislation as well as unofficial translations of certain federal acts.
The Swiss Chambers of Commerce Association for Arbitration and Mediation
Description. The official website of the Swiss Chambers' Arbitration Institution, established by the chambers of commerce and industry of the Swiss cities of Basel, Bern, Geneva, Lausanne, Lugano, Neuchâtel and Zurich.
WIPO Arbitration and Mediation Centre
Description. The official website of the World Intellectual Property Organization, a United Nations agency dedicated to the use of intellectual property as a means of stimulating innovation and creativity.
Prager Dreifuss AG
Professional qualifications. PhD, University of Zurich, 1998; admission Switzerland, 1999; admission England and Wales, 2002
Areas of practice. Litigation and arbitration; corporate and commercial; financing and capital markets; private client; real estate and construction.
- Bankruptcy litigation on behalf of creditors in Lehman bankruptcy.
- Assisting sovereign fund in claims against Swiss bank.
- Representing a company in UNCITRAL arbitration proceedings.
- Asset freezing and asset recovery litigation on behalf of private parties as well as on behalf of foreign states in connection with mutual legal assistance proceedings.
- Representing clients in ICC and Swiss Rules Arbitration proceedings.
- Representation of clients involved in administrative assistance proceedings in relation to the Federal Tax Administration and Federal Administrative Court.
- Acting on behalf of a retailer in a rental dispute concerning a flagship store.
- Representing claimants and defendants in high-level D&O claims.
Languages. English, German, French
Professional associations/memberships. Zurich and Swiss Bar Association; International Bar Association; Law Society (England and Wales); British-Swiss Chamber of Commerce.
Freezing Assets in Switzerland: New Developments, IBA Litigation Committee Newsletter, April 2016, with Marcel Frey.
Switzerland Dispute Resolution Law Guide 2016, Dispute Resolution Guide 2016, May 2016, with Marcel Frey and Michaela Lemke.
Disclosure of bank details: who has the right to object, The Lawyer, April 2016, with Marcel Frey.
Administrative Assistance in Tax Matters – Group Requests, Prager Dreifuss Newsletter, March 2016, with Danielle Wenger and Michaela Lemke.
Commentary on Swiss Civil Procedure Code, Art. 11, 12, 19 and 32 – 34, with Dr. Jürg Bloch.
Enforcement of arbitral awards in Switzerland: overview, Practical Law Global Guide 2015/2016, December 2015, with Marcel Frey and Michaela Lemke.
Enforcement of judgments in Switzerland: overview, Practical Law Global Guide 2015/2016, December 2015, with Marcel Frey and Michaela Lemke.
Enforcing foreign judgments and awards, IFLR Dispute Resolution Guide 2015, October 2015, with Marcel Frey.
Multi-Tiered Dispute Resolution Clauses, IBA Litigation Committee Compendium, September 2012, with Marcel Frey.
Litigation and enforcement in Switzerland: overview, Practical Law Global Guide 2015/2016, July 2015, with Marcel Frey and Bernhard Lauterburg.
Prager Dreifuss AG
Professional qualifications. Admission Switzerland, 2004; LLM, University of Cape Town, 2006
Areas of practice. Litigation and arbitration; corporate and commercial; private clients.
- Assisting sovereign fund in claims against Swiss bank.
- Representing a company in UNCITRAL arbitration proceedings.
- Representing claimants and defendants in high-level D&O claims.
- Representing a Swiss Bank in connection with data protection issues.
Languages. German, English, French, Afrikaans
Professional associations/memberships. Zurich and Swiss Bar Association; SwissCham Southern Africa.
- Freezing Assets in Switzerland: New Developments, IBA Litigation Committee Newsletter, April 2016, with Dr. Urs Feller.
- Switzerland Dispute Resolution Law Guide 2016, Dispute Resolution Guide 2016, May 2016, with Dr. Urs Feller and Michaela Lemke.
- Disclosure of bank details: Who has the right to object, The Lawyer, April 2016, with Dr. Urs Feller.
- Enforcement of arbitral awards in Switzerland: overview, Practical Law Global Guide 2015/2016, December 2015, with Dr. Urs Feller and Michaela Lemke.
- Enforcement of judgments in Switzerland: Overview, Practical Law Global Guide 2015/2016, December 2015, with Dr. Urs Feller and Michaela Lemke.
- Enforcing foreign judgments and awards, IFLR Dispute Resolution Guide 2015, October 2015, with Dr. Urs Feller.
- Multi-Tiered Dispute Resolution Clauses, IBA Litigation Committe Compendium, September 2012, with Dr. Urs Feller.
- Litigation and enforcement in Switzerland: overview, Practical Law Global Guide 2015/2016, July 2015, with Dr. Urs Feller and Bernhard Lauterburg.
Bernhard C Lauterburg
Prager Dreifuss AG
Professional qualifications. Georgetown University Law Centre, LLM, 2006; admission Switzerland, 2010
Areas of practice. Competition and regulatory; corporate and commercial; litigation and arbitration.
- Representing clients before state courts and arbitral tribunals.
- Advising on competition law (mergers, cartel investigations, distribution agreements).
- Advising an entity subject to cantonal procurement laws on questions relating to procurement law.
Languages. German, English, French
Professional associations/memberships. Swiss and Berne Bar Association; Swiss Arbitration Association; Studienvereinigung Kartellrecht e.V.; Swiss Chapter of the Ligue Internationale du Droit de la Concurrence; International Bar Association.
- Merger control in Switzerland, market intelligence, Volume 3 Issue 1, March 2016, with Prof. Dr. Philipp Zurkinden.
- Chambers Practice Guides: Merger Control, Chambers and Partners, Merger Control 2016, May 2016, with Prof. Dr. Philipp Zurkinden.
- TalkingPoint: Swiss Antitrust Investigations, Financier Worldwide, January 2016, with Prof. Dr. Philipp Zurkinden.
- Applicable law and jurisdiction in international reinsurance contracts from a Swiss perspective, Insurance Committee Newsletter, June 2015, with Dr. Christoph Graber.
- Litigation and enforcement in Switzerland: overview, Practical Law Global Guide 2015/2016, July 2015, with Dr. Urs Feller and Marcel Frey.
- Public Procurement 2016 – Switzerland, Getting The Deal Through, June 2016, with Prof. Dr. Philipp Zurkinden.
- Talking Point – Preparing for a Dawn Raid, Financier Worldwide, April 2015, with Prof. Dr. Philipp Zurkinden.
- Financier Worldwide, April 2015 - Discussion with lawyers from Kirkland & Ellis and PricewaterhouseCoopers Legal about dawn raids and thereby focuses on dawn raids in competition matters.
- IFLR Switzerland Guide 2015– Preliminary judicial protection, with Dr Urs Feller. The authors discuss interim relief in recent Swiss jurisprudence in several areas of law (contracts, bankruptcy, IP and competition) and highlight areas where it pays to be prudent.