Use the Lexology Getting the Deal Through tool to compare the answers in this article with those from other jurisdictions.
What is the structure of the civil court system?
Switzerland is a civil law jurisdiction, in which the federal government has legislative authority in the field of substantive and procedural civil law, whereas the states (or cantons as they are called) are responsible for the organisation of the courts and the administration of justice unless the law provides otherwise.
The Swiss court system is thus generally not divided into federal and state courts. Rather, the cantonal courts also have jurisdiction over cases involving federal civil law. An important exception to this rule is patent law, where the Federal Patent Court has been appointed as court of first instance.
In the cantons, the local conciliation authorities are competent to decide cases with an amount in dispute of up to 2,000 Swiss francs if the claimant so requests. Apart from that, the cantonal courts of first instance (mostly designated as regional or district courts) have first instance jurisdiction in civil matters.
Cases with an amount in dispute of up to 30,000 Swiss francs are handled in simplified proceedings. Furthermore, specific matters such as interim measures, enforcement of judgments, or debt enforcement and bankruptcy are dealt with in summary proceedings. The remaining disputes are treated in ordinary proceedings.
The composition of the courts in the different types of civil proceedings is governed by the cantonal laws on court organisation. Typically, simplified and summary proceedings are handled by a single judge, whereas ordinary proceedings are decided by a panel of three judges in the courts of first instance.
Several cantons have established specialised sections for labour and landlord-tenant disputes within their courts of first instance. The cantons of Zurich, St Gall, Argovia and Berne have further installed commercial courts acting as sole cantonal instances in commercial disputes with an amount in dispute of more than 30,000 Swiss francs.
Moreover, the cantons are obliged to designate a sole cantonal instance in, among others, intellectual property, antitrust and unfair competition matters. The cantons have generally assigned this judicial function to the cantonal appellate courts (sometimes called high courts or cantonal courts) or to one of the four commercial courts.
In the commercial courts, the judicial panels are composed not only of one or two chief justices but also of two or three specialised commercial judges who are familiar with the industry from which the dispute in question stems. Appellate courts in Switzerland usually employ three or five judges for deciding each case.
Judgments of the courts of first instance may be appealed to the cantonal courts of appeal. The decisions of the courts of appeal (as well as first instance judgments of the commercial courts and the Federal Patent Court) may in turn be appealed to the Swiss Federal Supreme Court.
Judges and juries
What is the role of the judge and the jury in civil proceedings?
The judges are responsible for the procedural management of their cases, the taking of evidence, and the assessment of the merits of the disputed claims. Juries do not exist in Swiss civil litigation. Instead, the judges assess and decide by majority vote whether the claimant succeeded in proving the factual basis for the claim and what the law is. In doing so, the judges must apply the law regardless of whether it was invoked by the parties. In contrast, the judges are generally prohibited from taking into account any facts that none of the parties presented.
Switzerland enacted general legislation on gender equality more than 20 years ago. Being a judge also became more compatible with family life in recent years as many part-time positions were created in the courts. In the canton of Zurich, for example, the percentage of female judges in the civil courts has risen from 15 per cent in 1995 to 37 per cent in 2018.
What are the time limits for bringing civil claims?
The limitation periods are governed by substantive law. Civil claims generally become time-barred after 10 years. This rule applies to most contractual claims. However, claims for rent, interest on capital and other periodic payments become time-barred after five years. The same is true for claims in connection with the delivery of foodstuffs, board and lodging, hotel expenses, as well as for claims for work carried out by craftsmen, doctors, lawyers, notaries, and employees.
Tort claims and claims for the restitution of an unjust enrichment become time-barred one year from the date on which the injured party became aware of his or her claim and of the identity of the person liable, but in any event 10 years after the date on which the damage or unjust enrichment was caused. If an action for damages is derived from an offence for which criminal law envisages a longer limitation period, that longer period also applies to the civil law claim.
Aside from limited exceptions, the statutory limitation periods start running as soon as a debt becomes due. The limitation periods are, however, interrupted and thereby caused to start anew if the debtor acknowledges the claim and in particular makes interest payments or partial payments. Furthermore, the limitation periods are interrupted if the claimant initiates debt enforcement proceedings, files an application for reconciliation, or submits a statement of claim to a court.
Generally, the statutory limitation periods may not be altered by contract. However, the time limits may be waived after a claim came into existence. It is therefore possible to enter into tolling agreements. Lastly, it is important to note that the courts may not consider any statute of limitation on their own accord. Instead, a debtor intending to rely on a statute of limitation must explicitly invoke this defence.
Are there any pre-action considerations the parties should take into account?
In principle, there are no particular steps a party must take before initiating court proceedings. For example, a defendant does not have to be notified in advance of a lawsuit. Likewise, there is no substantive obligation to answer warning letters of a prospective claimant.
It is, however, customary to communicate with the counterparty before entering into a lawsuit. Also, remaining silent to a warning letter might cause the claimant to issue unnecessary proceedings. This circumstance may lead the court to impose court costs on the defendant even if he or she prevails.
Swiss procedural law does not provide for US- or UK-style pretrial discovery or disclosure proceedings. However, it is possible to request the precautionary taking of evidence in summary proceedings if substantive law grants a right to do so, or if the applicant can show credibly that the evidence is at risk or that he or she has a legitimate interest.
To substantiate a legitimate interest, the applicant must show credibly that he or she would have a claim against the opponent if the evidence were to establish specific events. A claim is credible if the applicant presents objective indications that the factual requirements of the claim - other than those to be proven by the precautionary taking of evidence - are met.
How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?
To initiate civil proceedings, the claimant generally first has to file an application for reconciliation with the cantonal conciliation authority. The application for conciliation must identify the defendant and include the prayers for relief as well as a short description of the dispute. The conciliation authority serves the application for conciliation on the defendant by registered mail or international judicial assistance and summons the parties to a hearing.
At the hearing, the conciliation authority attempts to settle the dispute. To facilitate this endeavour, the parties have to appear in person, and the statements made during the hearing are confidential and may not be used in the further proceedings. If no agreement is reached, the conciliation authority grants the authorisation to proceed with the competent court. Based on this writ to proceed, the claimant is entitled to file the action in court within three months from the issuing of the authorisation.
In some instances, it is not required to complete conciliation proceedings before filing the action with the courts. This is, for example, the case with summary proceedings, divorce proceedings, certain debt enforcement actions, counterclaims, as well as with proceedings before a commercial court or another sole cantonal instance. The parties may further agree to waive any attempt at conciliation if the amount in dispute is at least 100,000 Swiss francs. If the defendant is domiciled abroad or has no known residence, the plaintiff may waive conciliation unilaterally.
An action is brought before the competent court by filing a statement of claim. This statement must contain the designation of the parties and their representatives, the prayers for relief, a statement on the amount in dispute, the factual allegations, and notice of the evidence offered for each assertion. The available physical records the claimant offers as evidence have to be filed together with the statement of claim.
Having received the statement of claim, the courts usually request the claimant to pay an advance on court costs. The defendant is then served with the statement of claim by registered mail and is given a deadline for filing the statement of defence. If the defendant is domiciled outside Switzerland, the statement of claim is again served through international legal assistance channels.
The civil courts in Switzerland do not experience serious capacity bottlenecks. There are legislative efforts to relieve the Supreme Court of some of its workload; however, this project mainly concerns criminal and administrative proceedings.
What is the typical procedure and timetable for a civil claim?
The proceedings before the cantonal conciliation authorities usually do not last longer than three months. If the claimant thereafter files a statement of claim, the courts usually request an advance on court costs to be paid within 10 to 30 days. Some courts already serve the statement of claim on the defendant when they ask for the payment of the advance; other courts only serve the statement of claim after having received the advance on court costs.
Once the advance has been paid, the defendant is set a deadline of about 60 days to file the statement of defence. Thereafter, the courts often invite the parties to an instruction or settlement hearing in which they provide a preliminary assessment of the case and try to settle the matter. It may happen that the parties are invited to orally present their reply and rejoinder at the instruction hearing. Usually, it takes three to five months to summon the parties to and complete the instruction hearing.
If the parties are not summoned to an instruction hearing, or if they were not given the opportunity to present their reply and rejoinder at such hearing, the claimant is given a deadline of approximately another 60 days to file his or her reply, and the defendant is finally invited to file the rejoinder usually within another 60 days. Once the exchange of written submissions is closed, the parties are summoned to the main hearing, and the court proceeds to take the evidence. Lastly, the court provides a written decision on the merits.
Overall, it usually takes between one and two years from the filing of the claim to the rendering of a first instance judgment. Appeal proceedings in civil matters in the cantonal courts of appeal take approximately six months. A civil appeal to the Supreme Court is on average decided within less than five months. Consequently, in a civil litigation, the parties can usually expect to receive a final and enforceable judgment after no more than three years.
Can the parties control the procedure and the timetable?
Under Swiss procedural law, the management of civil cases lies within the responsibility of the courts. The parties have very limited influence on case management issues. However, deadlines for the filing of briefs may sometimes be extended. Many courts, for example, initially set a deadline of only about 20 days to file the statement of defence but follow the practice that such deadline may be extended twice. If a party is interested in accelerating the proceedings, it can file its briefs early.
Some courts also take into consideration whether the parties are interested in having an instruction hearing or not. If one of the parties declares that it does not wish to take part in a settlement hearing, it is likely that the court will refrain from summoning the parties to such a hearing. In that case, the court will also not provide its preliminary assessment of the case, which is normally rendered at the instruction hearing. From the defendant’s point of view, this can be advantageous if the claimant missed important points in the statement of claim.
Evidence – documents
Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?
Swiss substantive law provides for a duty to retain certain documents such as accounting records and vouchers, tax-related documents, and commercial banking records for a duration of 10 years. Criminal law further prohibits the withholding of documents which the owner may not dispose of alone. Aside from that, a party to a dispute pending with the courts is not legally required to preserve documents and other evidence until the litigation is over.
Both the parties to a litigation and third parties have a duty to cooperate in the taking of evidence and in particular to produce physical records. If a party refuses to cooperate without valid reasons, the court takes this into account when appraising the evidence. If a third party refuses to cooperate, the court may impose disciplinary fines, threaten criminal sanctions, or order the use of compulsory measures.
Moreover, a party applying for ex parte interim measures has the duty to share with the court any relevant documents it may have even if they do not support its request.
Evidence – privilege
Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?
Correspondence (including letters, emails, draft agreements or briefs, memoranda, and the like) between a party or a third party and a Swiss lawyer or a lawyer from a member state of the European Union or the European Free Trade Association who is acting in his or her capacity as a professional representative is privileged and does not have to be produced in court proceedings. The same privilege applies to correspondence with a licensed Swiss patent attorney.
The attorney-client privilege is, however, limited to the typical professional activities of attorneys. In contrast, correspondence with a lawyer who is, for example, acting as a mere investment adviser or as a member of the board of a company is not privileged. Likewise, advice from in-house counsel is not privileged.
Evidence – pretrial
Do parties exchange written evidence from witnesses and experts prior to trial?
The parties are required to file any documentary evidence supporting their assertions together with their briefs. However, as a general rule, there is no exchange of witness statements. Witnesses must be questioned by the court, whereas written statements of witnesses are not admissible as evidence. The filing of a witness statement might even impair the value of that witness’ testimony because he or she might be considered biased. Moreover, the bar rules in Switzerland prohibit attorneys from exerting any influence on potential witnesses. Witness statements are therefore used in exceptional cases only, for example, in summary proceedings during which witnesses are not heard because of time constraints.
Sometimes the parties hand in expert opinions. However, pursuant to settled case law, privately obtained expert opinions are not formally admissible as evidence either. Rather, such statements in principle have no more value than an assertion by one of the parties. However, expert opinions obtained by the parties are nevertheless used quite often to better substantiate the parties’ assertions and because they might somehow impress the court. Very detailed assertions based on a privately obtained expert opinion also have to be contested in a substantiated manner. Otherwise, they are deemed as acknowledged.
Evidence – trial
How is evidence presented at trial? Do witnesses and experts give oral evidence?
Witnesses are typically summoned to the main hearing or to an evidentiary hearing. They are advised of the criminal consequences of perjury before being questioned by the court. The parties may request that additional questions be put to the witness, or, with the consent of the court, they may themselves ask such questions. The essential details of the witnesses’ statements are put on record. In addition, the statements may be recorded on tape, video or by other technical means.
Likewise, experts are appointed by the court after having heard the parties. They, too, are advised of the criminal consequences of perjury and may be questioned at a hearing or asked to provide a written opinion. In most cases, courts commission written expert opinions. If the court intends to rely on the expertise of one of its members, it must inform the parties of the expert judge’s opinion so that they may comment on it.
What interim remedies are available?
A party may apply for interim measures either while a Swiss or foreign action on the merits is pending or before such action is filed. The courts will order interim measures if the applicant shows credibly that a right to which he or she is entitled has been or is about to be violated and that this threatens to cause harm to the applicant that is not easily reparable. A claimed violation of a right and the harm resulting from it is deemed credible if the applicant provides objective indications that his or her assertions are true.
The court may order any interim measure suitable to prevent the imminent harm, in particular: an injunction prohibiting to do something, an order to remedy an unlawful situation, an order to a register authority or to a third party, performance in kind, or (in exceptional cases provided by the law) the payment of a sum of money. If the applicant applies for the specific performance of a claim by way of an interim measure, he or she usually has to meet stricter requirements as regards the credibility of the claim and the imminent harm.
A party may also apply for ex parte interim measures if he or she can demonstrate that there is a special urgency. Whoever has reason to believe that an ex parte interim measure against him or her will be applied for may set out his or her position in advance by filing a protective letter. The protective letter remains valid for a duration of six months and will only be served on the counterparty if proceedings for an ex parte interim measure are initiated.
Monetary claims generally have to be secured by requesting an ex parte freezing order pursuant to the Debt Enforcement and Bankruptcy Act (DEBA). The court at the place where the assets are located will issue such freezing order if the creditor can show credibly that he or she has a claim against the debtor, that there exists a ground for the freezing order, and that there are assets at hand belonging to the debtor. The creditor has to provide prima facie evidence for the existence of the assets to be attached.
The creditor may invoke grounds for a freezing order if the debtor has no fixed domicile, is concealing his or her assets, is absconding, is passing through, belongs to the category of persons who visit fairs and markets, or lives outside Switzerland (the latter provided that the claim has a sufficient connection to Switzerland). An application for a freezing order is also deemed justified if the debtor is in possession of a written acknowledgement of debt or an enforceable judgment.
What substantive remedies are available?
Swiss courts may grant affirmative or declaratory relief. In judgments providing affirmative relief, the defendant is ordered to pay money, to do, to refrain from doing, or to tolerate something. A declaratory judgment establishes that a particular right or legal relationship does or does not exist. A claimant may only apply for a declaratory judgment if he or she has a legitimate interest in the declaration. Such interest is normally denied as long as affirmative relief is available.
Aside from limited exceptions in labour law, punitive damages are not available in Switzerland. Instead, an aggrieved party is merely entitled to actual damages. In addition, in cases of homicide, personal injury, or injury to personality rights, the courts may award the victim or its relatives an appropriate sum as compensation for personal suffering. Furthermore, a debtor of a pecuniary debt must pay default interest of 5 per cent per year.
What means of enforcement are available?
Judgments ordering a party to pay money are enforced pursuant to the DEBA. To commence debt enforcement proceedings, the creditor must apply for a payment order with the competent debt enforcement office. If the debtor objects to the payment order, the creditor has to have the objection set aside in summary or ordinary proceedings. Thereafter, the creditor may request with the debt enforcement office that assets of the debtor be seised or (in case of a corporation) that bankruptcy proceedings be initiated.
Other affirmative judgments are enforced by the courts in summary proceedings. In order to force the defendant to act, refrain from acting or tolerate something, the enforcement court may issue a threat of criminal sanctions, impose a one-time disciplinary fine of up to 5,000 Swiss francs, issue a disciplinary fine of up to 1,000 Swiss francs for each day of non-compliance, order a compulsory measure (such as taking away a movable item or vacating immovable property), or order performance by a third party. The enforcement court may request assistance of other authorities.
Are court hearings held in public? Are court documents available to the public?
Court hearings (as well as any oral passing of judgment) are generally conducted in public. Likewise, court decisions are made public. However, the public may be excluded when required by public interest or by the legitimate interests of an involved person. Moreover, family law proceedings are not conducted in public. The deliberations of the court are public only in the Supreme Court as well as in the cantons of Berne and Basle. Court documents are not available to the public.
Does the court have power to order costs?
Procedural costs comprise court costs and party costs. They are both calculated based on tariffs, which primarily depend on the amount in dispute. The courts may, and normally do, request that the claimant makes an advance payment up to the amount of the expected court costs. The claimant may further be ordered to pay an advance on the defendant’s party costs if he or she has no residence in Switzerland (or in a country that entered into a treaty with Switzerland excluding such advances), if he or she appears to be insolvent, if he or she owes costs from prior proceedings, or if there is a considerable risk that the compensation will not be paid for other reasons.
In principle, the unsuccessful party has to bear the procedural costs. If the action is not admitted by the court or is withdrawn, the claimant is deemed to be the unsuccessful party; in case of acceptance of the claim, it is the defendant. If no party is entirely successful, the costs are allocated in accordance with the specific outcome of the case. If a claim becomes moot while the proceedings are pending, the courts normally take into consideration which party caused the litigation, which party caused the matter to become moot, and which party would likely have succeeded had the claim not become moot. In extraordinary circumstances, the courts may diverge from the above principles of cost allocation.
Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?
The bar rules prohibit lawyers from entering into fee agreements according to which the lawyer’s remuneration exclusively consists in a share of the proceeds of the claim or according to which the lawyer waives his or her fee claims if the case is lost. Usually, lawyers charge their clients on an hourly basis. However, as long as the requirements set out above are met, they are free to enter into alternative fee arrangements, including flat fees and premiums in case of success.
Litigation funding is permissible. Furthermore, litigation funding companies are not bound by the bar rules. They may, for example, take a share of the proceeds of the claim and in return promise to cover the procedural costs if the action is dismissed.
Is insurance available to cover all or part of a party’s legal costs?
Legal expense insurance is widely available and popular. Almost 60 per cent of the population has taken out such insurance. The coverage of legal expense insurance depends on the details of each policy. Normally, however, these insurances cover the legal costs of the insured, court costs and a possible compensation for party costs.
May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?
Two or more parties may jointly file an action or be sued as joint defendants if their rights and duties result from similar circumstances or legal grounds and if their individual cases are subject to the same type of procedure. Moreover, associations and other organisations of national or regional importance that are authorised by their articles of association to protect the interests of a certain group of individuals may bring an action in their own name for a violation of the personality of the members of such group. However, such associations may only request the court to prohibit an imminent violation, put an end to an ongoing violation or establish the unlawful character of a violation. In contrast, actual class actions (ie, proceedings in which one of the parties is a group of people who are represented collectively by a member of that group) are currently not known in Switzerland.
On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?
Judgments of the cantonal courts of first instance may be appealed to the cantonal courts of appeal within 30 days on grounds of incorrect establishment of the facts or incorrect application of the law if the amount in dispute is at least 10,000 Swiss francs. Judgments below this threshold and procedural decisions may only be objected within 30 days (or 10 days in case of summary decisions and procedural orders) for incorrect application of the law or obviously incorrect establishment of the facts.
Decisions of the courts of appeal may be further appealed to the Supreme Court within 30 days if the amount in dispute reaches 30,000 Swiss francs (or 15,000 Swiss francs in labour and landlord-tenant matters). Judgments of sole cantonal instances (eg, the commercial courts) and of the Federal Patent Court may be appealed to the Supreme Court regardless of the amount in dispute. The Supreme Court reviews most cases appealed to it for legal and gross factual errors. However, preliminary relief decisions may only be appealed for the violation of constitutional rights.
What procedures exist for recognition and enforcement of foreign judgments?
Switzerland entered into several bilateral and multilateral treaties on the recognition and enforcement of foreign judgments, the most important being the Lugano Convention (LugC), a parallel convention to the Brussels I Regulation. The LugC applies in civil and commercial matters (except for inheritance matters, bankruptcy, social security, and arbitration). Pursuant to the LugC, judgments rendered in a member state of the European Union or in another contracting state to the LugC are generally recognised and enforced in Switzerland. However, a foreign judgment is not recognised if mandatory provisions on international jurisdiction set up in the LugC are violated, if the judgment’s recognition would manifestly violate public policy, or if it was rendered in default and the defendant was not served with the document that instituted the proceedings. A foreign decision is not recognised either if it is irreconcilable with a Swiss judgment between the same parties or with an earlier judgment rendered in another contracting state to the LugC or in a third state, provided that the earlier judgment fulfils the conditions necessary for its recognition in Switzerland.
If no international treaty applies, foreign judgments are recognised according to the provisions of the Private International Law Act (PILA). Pursuant to the PILA, foreign judgments are recognised if the authorities rendering the decision had jurisdiction, if no ordinary appeal can be lodged against it, and if there are no special grounds for refusal such as a violation of public policy. A foreign court is deemed to have jurisdiction if a provision of the PILA provides so, or, in the absence of such provision, if the defendant was domiciled in the state in which the decision was rendered, if the parties entered into a valid choice of forum agreement establishing jurisdiction of the foreign authority, or if the defendant proceeded to the merits without objecting to jurisdiction in the foreign proceedings.
Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?
Switzerland is a signatory state to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (HEC). According to the HEC, judicial authorities of another contracting state may request the competent Swiss authority, by means of a letter of request, to obtain evidence. However, Switzerland made a reservation that it will not execute letters of request issued for the purpose of obtaining pretrial discovery of documents as known in common law countries if the requested documents are not directly and necessarily connected to the underlying proceedings abroad, if a party or third person is asked to indicate which documents relating to the dispute are in its possession, or if other legitimate interests are endangered.
UNCITRAL Model Law
Is the arbitration law based on the UNCITRAL Model Law?
Swiss arbitration law is not based on the UNCITRAL Model Law but does not fundamentally deviate from it either. Arbitrations held in Switzerland in which at least one of the parties is domiciled outside Switzerland are governed by the PILA. Domestic arbitrations are governed by the Civil Procedure Code.
What are the formal requirements for an enforceable arbitration agreement?
An arbitration agreement must be made in writing or in any other form allowing it to be evidenced by text, for example in email correspondence. It should, however, be noted that the interpretation of an arbitration clause is not limited by the wording of the written agreement. Rather, other circumstances evidencing the parties’ intentions may also be taken into account.
Choice of arbitrator
If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?
If the agreement is silent about the number of arbitrators, the tribunal will consist of three members. Each party may appoint one arbitrator. The chosen arbitrators then have to agree on a chairperson. If the parties fail to choose a single arbitrator or to appoint a plurality of arbitrators, or if the arbitrators fail to agree on a chairperson, each party may request the courts at the seat of the arbitral tribunal to appoint the arbitrators and/or the chairperson.
A member of the tribunal may only be challenged if he or she lacks the qualifications required by the parties’ agreement, if there is a ground for challenge in accordance with the rules of arbitration adopted by the parties, or if there is reasonable doubt as to his or her independence or impartiality. Should the challenged arbitrator dispute the challenge, the matter may be referred to the competent body designated by the parties or, if no such body has been designated, to the courts.
What are the options when choosing an arbitrator or arbitrators?
Switzerland is one of the most popular venues for international commercial arbitration, and there is a large community of lawyers specialising in the field both as party counsel and arbitrators. Many arbitrators have significant experience in specific fields of the law and in particular industries. It is therefore safe to say that there are numerous options for choosing highly qualified arbitrators in Switzerland.
Does the domestic law contain substantive requirements for the procedure to be followed?
The parties are free to determine the procedure to be followed by the tribunal. In particular, they may either agree on individually designed rules, refer to a set of arbitration rules, or agree on a procedural law of their choice. The law does not contain mandatory procedural rules other than that the parties must be treated equally and that their right to be heard must be respected.
On what grounds can the court intervene during an arbitration?
Compared with other jurisdictions, there is only very limited room for court intervention in a Swiss arbitration. The courts can intervene in an arbitration as regards the appointment and removal of arbitrators. Moreover, the courts may assist an arbitral tribunal in the taking of evidence and the enforcement of preliminary measures. Lastly, for the limited grounds outlined below, arbitral awards may be appealed to the courts. In international arbitration proceedings, however, the parties may in writing exclude any right of appeal if none of the parties is domiciled in Switzerland.
Do arbitrators have powers to grant interim relief?
Unless otherwise agreed, the arbitral tribunal may grant interim measures at the request of one of the parties. If the ordered measures are not complied with, the arbitral tribunal may seek the assistance of the courts at the seat of the tribunal in executing its order.
When and in what form must the award be delivered?
The award must be delivered in writing and be signed at least by the chairperson. The law does not require the tribunal to render its decision within a particular time period.
On what grounds can an award be appealed to the court?
Arbitral awards may be appealed to the Supreme Court within 30 days. In domestic arbitration, the parties may also agree that the award is appealable to the court of appeal at the seat of the tribunal. There is no right of further appeal. An award may only be appealed for the following reasons:
- the single arbitrator was appointed or the arbitral tribunal was composed in an irregular manner;
- the arbitral tribunal wrongly declared itself to have or not to have jurisdiction;
- the arbitral tribunal decided issues that were not submitted to it or failed to decide on a prayer for relief;
- the principles of equal treatment of the parties or the right to be heard were violated;
- in domestic arbitrations: the award is arbitrary in its result because it is based on findings that are obviously contrary to the facts as stated in the case files or because it constitutes an obvious violation of law or equity;
- in international arbitrations: the award is irreconcilable with public policy; and
- only in domestic arbitrations: the costs and compensation fixed by the arbitral tribunal are obviously excessive.
In a domestic arbitration, a party may further request the court of appeal at the seat of the tribunal to exceptionally review the award if:
- it subsequently discovers significant facts or decisive evidence that could not have been submitted in the earlier proceedings (excluding facts and evidence that arose after the arbitral award was made);
- it can be proven that the award was influenced by a felony or misdemeanour;
- it is claimed that the acceptance, withdrawal or settlement of the claim is invalid; or
- the European Court of Human Rights determined that the European Charter of Human Rights has been violated, compensation is not an appropriate remedy, and review is necessary to remedy the violation.
There are no statutory provisions on the review of international arbitral awards. However, the Supreme Court recognises that revision is also available in international arbitration proceedings.
What procedures exist for enforcement of foreign and domestic awards?
Swiss arbitral awards are enforced like judgments of courts. Awards of arbitral tribunals seated outside Switzerland are recognised and enforced if the prerequisites of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards are met.
Can a successful party recover its costs?
Swiss law does not address cost allocation in arbitration proceedings but it is generally recognised that the arbitral tribunal may also decide on such costs. The parties may agree on rules on cost allocation or refer the question to a given set of arbitral rules. In the absence of any agreement, arbitral tribunals in Switzerland usually follow the rule that the unsuccessful party must bear the tribunal’s costs and reimburse the counterparty for its legal costs.
Alternative dispute resolution
Types of ADR
What types of ADR process are commonly used? Is a particular ADR process popular?
The most common type of ADR in Switzerland is conciliation proceedings before the cantonal reconciliation authorities. Apart from that, mediation is gaining popularity in more complex disputes where the parties feel that their ongoing relationship should be preserved, as well as in matrimonial matters.
Requirements for ADR
Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?
In most cases before state courts, the parties have to complete conciliation proceedings with the reconciliation authorities before they may file their action in court. Once the litigation is pending in court, the parties may no longer be compelled to participate in an ADR process. However, the court may recommend mediation to the parties at any time. Furthermore, in many proceedings the court may at some point during the litigation summon the parties to an instruction or settlement hearing at which the judges try to arrange an amicable settlement of the dispute.
Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?
Based on case law of the European Court of Human Rights, the courts in Switzerland have adopted the practice that the parties are entitled to comment on any statement of their respective counterparty. Therefore, even if the court does not invite a party to file further comments but merely serves a statement of the counterparty on it, that party has the right to file a reply within 10 days. Sometimes, this may lead to lengthy exchanges of briefs.
Update and trends
Update and trends
Are there any proposals for dispute resolution reform? When will any reforms take effect? (Please also mention any ground-breaking recent cases, etc.)
On 2 March 2018, the Federal Council published a preliminary draft for a revision of the Civil Procedure Code. Apart from several technical improvements to the procedural rules currently in force, the proposed legislation suggests three major changes: first, the draft aims at reducing the entry barriers to the judicial system by modifying the rules on court costs. Second, the draft intends to strengthen the mechanism of collective redress by introducing group actions and group settlements. Third, the draft proposes introducing a privilege for legal advice of in-house counsel.
Regarding court costs, the draft suggests limiting the advance on court costs to 50 per cent of the expected costs. At the moment, most courts request an advance in the full amount of the expected court costs. The draft also provides that the court costs shall be debited from the advance paid by the plaintiff only to the extent that these costs are actually imposed on him. Today, the courts usually debit the entire court costs from the advance paid by the plaintiff and grant the plaintiff a right of recourse against the defendant for the court costs imposed on the latter. Lastly, the draft provides that legal aid for the needy shall also be available for the precautionary taking of evidence. In the past, the Supreme Court has held the contrary.
With regard to collective redress, the Federal Council noted that the possibility for associations of national or regional importance to bring a group action in the interest of its members has not been used since its introduction in 2011. The draft therefore proposes to allow group actions to be initiated not only by associations of national or regional importance but by any organisation, if it is not profit-oriented, authorised in its articles of association to protect the interest of its member, and appears fit to safeguard these interests. The concerned group members must authorise the organisation to conduct the proceedings on their behalf in a form that enables proof to be provided by text (opt-in system). The organisation shall be entitled to file suit for any type of misconduct, and it may also claim monetary relief. Up to an amount in dispute of 500,000 Swiss francs, the proposed group actions would be exempted from the duty to pay an advance on court costs. Organisations that are entitled to bring a group action would also be given the possibility of entering into a group settlement. After approval of the settlement by the court, it would become binding on all group members unless they declare that they withdraw from the settlement (opt-out system).
The preliminary draft further suggests introducing a privilege for in-house counsel. Currently, Swiss companies are disadvantaged compared to companies in foreign jurisdictions that provide for an in-house counsel privilege. Pursuant to the draft, the in-house counsel shall be entitled to refuse to cooperate in the taking of evidence, provided that:
- the respective work would be regarded as having been undertaken in a professional capacity had it been done by an external lawyer; and
- the internal legal service is headed by a person qualified to practice before the Swiss bar.
The proposed privilege would also extend to documents exchanged with the in-house counsel.
For now, it is unclear whether and when the proposed amendments will actually become law.