Jurisdictional immunity

Domestic law

Describe domestic law governing the scope of jurisdictional immunity.

Switzerland has adopted a restrictive concept of jurisdictional immunity.

Exceptions to immunity from jurisdiction are essentially based on the case law of the Swiss Federal Supreme Court, which consistently applied the concept of sovereign immunity restrictively. A distinction is made between cases in which the foreign state acts in its sovereign capacity, acta jure imperii, where immunity from jurisdiction is applicable, and cases in which the foreign state acts in a private capacity, acta jure gestionis. The principal criterion to distinguish between acta jure imperii and acta jure gestionis is the nature of the transaction rather than its purpose. In respect of acta jure gestionis, cases may be brought before a Swiss court if the transaction out of which the claim against the foreign state arises has a sufficient connection to Switzerland.

The requirement of a connection to Switzerland arises exclusively under Swiss law and is not a matter of customary international law; as such, it has been criticised by some scholars as preventing access to justice. It was, however, clearly confirmed by the Swiss Federal Supreme Court in a recent decision (ATF 144 III 411). The requirement is met and the required connection is established, for instance, when the claim originated or had to be performed in Switzerland, or when the debtor performed certain acts in Switzerland. Conversely, the mere location of assets in Switzerland or the existence of a claim based on an award rendered by an arbitral tribunal seated in Switzerland does not create such a connection.

Absence of immunity relates to the competence ratione materiae of the court and is, therefore, under Swiss law a requirement for the admissibility of the claim (article 59 of the Swiss Code of Civil Procedure). In principle, this requirement must be examined ex officio by the judge before turning to the merits of the case (article 60 of the Swiss Code of Civil Procedure), and must still exist at the time the judgment is rendered. If the plea of immunity succeeds, the court seized must declare the claim inadmissible.

As to the scope of the concept of state and its instrumentalities, Switzerland has adopted the common definition of state under international law. Accordingly, a state will be recognised as such when the following three elements exist: a population, a delimited territory, and a public authority capable of effectively exercising sovereign power internally and externally. The Swiss practice is generally to recognise the existence of a state (but not of a government) when these elements are objectively met; however, Switzerland reserves the right to consider other elements, such as general recognition by the international community.

According to the relevant case law and legal doctrine, agencies and instrumentalities of the state or other entities also fall under the concept of ‘state’ to the extent that they are entitled to perform and are actually performing acts involving the exercise of sovereign authority.

State waiver of immunity or consent

How can the state, or its various organs and instrumentalities, waive immunity or consent to the exercise of jurisdiction?

A state may choose to waive its immunity from jurisdiction. For the waiver of immunity from jurisdiction to be valid, the state must consent to the exercise by the Swiss courts of jurisdiction over the dispute explicitly or implicitly. There is little case law on the issue, but generally, the state’s consent may be considered given by entering into an arbitration agreement or by agreeing to a jurisdictional clause referring a dispute to Swiss courts, or if the state proceeds to the merits of a case without contesting the court’s jurisdiction or raises a counterclaim. Such waivers should nevertheless be unambiguous, failing which Swiss courts will not consider them as valid. As an illustration, the Swiss Federal Supreme Court has considered that a contractual clause stating that disputes had to be resolved by local courts ‘in so far as diplomatic customs allow’ did not amount to a waiver of immunity (Swiss Federal Supreme Court Decision 4A_386/2011, dated 4 August 2011). The approach was upheld by European Court of Human Rights (see Ndayegamiye-Mporamazina v Switzerland, No. 16874/12, 5 February 2019).

As to the particular case of arbitration proceedings, by entering into an arbitration agreement, a state waives in principle the right to invoke its immunity from jurisdiction with regard to both the arbitral tribunal and the local courts that are competent to exercise judicial review and supervisory powers over the arbitral proceedings. The question has, however, not been addressed by the Swiss Federal Supreme Court (MINE v Guinea, 4 December 1985). Finding of waiver would be in line with article 17 of the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which provides that:

 

a state that agrees in writing to submit to arbitration disputes related to a commercial transaction, cannot invoke immunity from jurisdiction in court proceedings regarding the validity, interpretation or application of the arbitration agreement, the arbitration procedure or the confirmation or setting aside of the award.

 

Moreover, article 177(2) of the Private International Law Act provides that:

 

if a party to an arbitration agreement is a state or an enterprise, or an entity controlled by a state, it may not invoke its own law to contest the arbitrability of a dispute or its capacity to be a party to arbitration.

In which types of transactions or proceedings do states not enjoy immunity from suit (even without the state’s consent or waiver)? How does the law of your country assess whether a transaction falls into one of these categories?

Exceptions to immunity from jurisdiction are essentially based on the case law of the Swiss Federal Supreme Court, which has consistently applied the concept of sovereign immunity restrictively. Accordingly, a state cannot invoke immunity from jurisdiction for acts performed in a private capacity, acta jure gestionis, giving rise to a claim having a sufficient connection to Switzerland. The requirement of a sufficient connection to Switzerland arises exclusively under Swiss law and is not a matter of customary international law.

The current Swiss practice does not depart significantly from the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which provides that a state cannot in principle invoke immunity from jurisdiction in respect of proceedings concerning:

  • commercial transactions;
  • contracts of employment (with substantial exceptions);
  • personal injury and damage to property;
  • determination of rights of ownership;
  • possession and use of property;
  • intellectual and industrial property;
  • participation in companies or other collective bodies; and
  • ships owned or operated by a state.

If one of the exceptions to sovereign immunity set out above applies, is there any related principle that could prevent a court having jurisdiction over the state?

There are no further doctrines or principles in addition to those set out in the preceding sections that would give rise to an exception from jurisdiction in relation to sovereign immunity. Under Swiss law, there are no doctrines such as non-justiciability of certain disputes or act of state.

Proceedings against a state enterprise

To what extent do proceedings against a state enterprise or similar entity affect the immunity enjoyed by the state? Is there precedent for piercing the corporate veil to subject the state itself to those proceedings?

The legal doctrine and the limited case law of the Swiss Federal Supreme Court confirm the application (although restrictive) of the theory of piercing of the corporate veil in cases involving foreign states and connected persons. Exceptional circumstances are required. Mere economic identity between the state and the state-owned corporate body is not sufficient; the corporate body must have been manifestly put forward by the state in bad faith.

Standing

What is the nexus the plaintiff needs to have standing to bring a claim against a state?

For a plaintiff to have standing to bring a claim against a state, the foreign state must have acted in a private capacity, acta jure gestionis, and the transaction out of which the claim against the foreign state arises must have a sufficient connection to Switzerland. Apart from these rules, ordinary rules on jurisdiction as set out in the Private International Law Act and, as the case may be, the Code of Civil Procedure, will apply to determine whether Swiss courts have jurisdiction.

Nexus of forum court

What is the nexus the forum court requires to exercise jurisdiction over a state if the property or conduct that forms the subject of the claim is outside the forum state’s territory?

If the property or conduct that forms the subject of the claim is outside Switzerland, the Swiss court seized with the matter will examine its jurisdiction based on the Private International Law Act.

As regards the specific issue of immunity of jurisdiction of a foreign state, a Swiss court will only entertain claims against a foreign state if such state acted in a private capacity, acta jure gestionis, and the transaction out of which the claim against the foreign state arises has a sufficient connection to Switzerland. The requirement is met and the required connection is established, for instance, when the claim originated or had to be performed in Switzerland, or when the debtor performed certain acts in Switzerland. Conversely, the mere location of assets in Switzerland or the existence of a claim based on an award rendered by an arbitral tribunal seated in Switzerland does not create such a connection.

Interim or injunctive relief

When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what interim or injunctive relief is available?

A distinction must be made between proceedings before state courts and before an arbitral tribunal.

In arbitration proceedings, by entering into an arbitration agreement, a foreign state waives its right to assert a plea of immunity. Consequently, interim or injunctive relief could be issued by an arbitral tribunal pursuant to the rules applicable to the arbitration proceedings.

Within Swiss court proceedings, ordinary interim or injunctive relief will be available provided there is no immunity from jurisdiction.

As to interim or injunctive relief, Swiss law distinguishes between non-monetary and monetary claims. While enforcement of the former is regulated by the Code of Civil Procedure, enforcement of the latter is regulated by the Debt Enforcement and Bankruptcy Act. Interim relief, both before a claim has been filed or during the proceedings, can be requested by way of interim measures for non-monetary claims and attachment for monetary claims.

Swiss courts can order any interim measure suitable to prevent imminent harm in support of a non-monetary claim (article 262 et seq of the Code of Civil Procedure). In particular, interim relief can take the form of:

  • an injunction;
  • an order to remedy an unlawful situation;
  • an order to a registry or third party;
  • performance in kind; or
  • the remittance of a sum of money (if provided by law).

 

In practice, interim measures that are frequently requested are the registration of property rights in a public register, such as the land register. Interim measures can also be requested to prevent a party from disposing of assets such as company shares or movable property.

In cases of special urgency, and in particular, where there is a risk that the enforcement of the measure will be frustrated, the court may order the interim measure immediately and without hearing the opposing party, ex parte.

In the context of a monetary claim, assets may be frozen by way of attachment proceedings (article 272 et seq of the Debt Enforcement and Bankruptcy Act). An attachment is granted ex parte and must subsequently be validated. In support of its application, the applicant must, prima facie:

  • show a claim against the debtor;
  • identify assets of the debtor that can be attached; and
  • show that one of the specific grounds for attachment, as set out by law, exists (eg, if the debtor does not live in Switzerland and the claim has sufficient connection with Switzerland or is based on a recognition of debt; or if the creditor holds an enforceable title, such as judgment or award, against the debtor).
Final relief

When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what type of final relief is available?

The relief available will depend on the applicable law. Under Swiss law, when issuing judgments on the merits, a court is not limited to monetary relief. It can also issue judgments for:

  • specific performance;
  • declaratory judgments;
  • cease-and-desist orders;
  • judgments changing a legal right or status; and
  • partial judgments.

 

Final relief granted in foreign judgments is generally recognised under Swiss domestic law unless they violate Swiss public order.

Service of process

Identify the court or other entity that must be served with process before any proceeding against a state (or its organs and instrumentalities) may be issued.

Under Swiss law, service is handled by courts directly after the claimant has filed a claim with them. According to the legal doctrine and the Guidelines of the Swiss Federal Office of Justice, the same procedural requirements apply to court proceedings resulting from an application to secure the enforcement of an arbitral award against a foreign state and to proceedings for enforcement of a court judgment involving a foreign state.

How is process served on a state?

Article 16 of the 1972 European Convention on State Immunity applies by analogy; that is, service must proceed via diplomatic channels. The Swiss Federal Supreme Court does not yet recognise the time limits foreseen in the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property for service as amounting to customary international law, and if the foreign state elects domicile with its mission, legal proceedings shall be served on the mission. The same holds true if the foreign state elects domicile with a lawyer. Reasonable time limits must also lapse before the court can enter a judgment by default against the foreign state and before the judgment becomes final (exhaustion of the right of appeal).

According to the legal doctrine, state entities with a separate legal personality can be served in the same way as private entities.

Judgment in absence of state participation

Under what conditions will a judgment be made against a state that does not participate in proceedings?

Provided Swiss courts have jurisdiction, a judgment may be rendered against a state that does not participate in the proceedings if the foreign state has been duly served with the proceedings. This assumes that the claim and the service of process are made in an internationally admissible manner to the competent organ of the foreign state and that the state was granted a reasonable period of time to respond. Since absence of immunity is a condition of admissibility, the court seized with a claim against a foreign state that does not participate in the proceedings must examine this issue ex officio (ie, without the argument having been raised by the foreign state).

Law stated date

Correct on

Give the date on which the information above is accurate.

11 June 2020