1 Court system - Describe the general organisation of the court system for civil litigation.
The organisation is governed by cantonal law (article 3 et seq of the Swiss Civil Procedure Code, CPC). Generally, each canton has a conciliation authority and a first and second instance court. Decisions of the last cantonal instance are appealable to the Federal Supreme Court if certain requirements are met (article 72 of the Federal Supreme Court Act (FSCA)).
In principle, civil courts are competent for all civil law disputes. As the cantons are free to organise the jurisdiction ratione materiae, some cantons have established first instance courts that only hear specific types of civil disputes (eg, for matters of employment or rental law).
For certain complex matters – inter alia, IP law disputes (with the exception of disputes relating to certain aspects of patents for which the Swiss Federal Patent Court has exclusive jurisdiction, see below), cartel law disputes, disputes on the use of a business name – there is, as provided for by statute, the jurisdiction of a sole cantonal court (article 5 CPC). Certain cantons, inter alia, Zurich, established a commercial court that is the sole cantonal instance for commercial disputes when the requirements provided for in article 6 CPC are fulfilled. In cases where only the defendant is registered in a commercial register, the plaintiff may choose between the commercial and the ordinary court.
In Switzerland, cantonal courts have jurisdiction also concerning federal law with the exception of certain patent law disputes for which there exists exclusive jurisdiction of the Swiss Federal Patent Court.
Courts are independent from other branches of power such as the executive and the legislature.
As a matter of principle, there is no legal requirement to follow precedents (no stare decisis). Yet, as a matter of fact, cantonal courts tend to abide by the precedents of the Federal Supreme Court to avoid the risk of their decisions being overturned. A binding force of a higher court's decision exists if the decision is remanded to the lower court. Finally, a court decision may be binding in the context of res iudicata (ie, in any subsequent proceedings between the same parties concerning the same subject matter).
There are no juries in Switzerland.
2 The legal profession - Describe the general organisation of the legal profession.
The admission as a lawyer and the professional duties of lawyers are governed by the Federal Act on the Freedom of Movement for Lawyers (FAFML).
To represent parties before any court in Switzerland, lawyers must be registered with a cantonal register of lawyers. For such registration, lawyers must fulfil several requirements. As to the professional requirements, after successfully completing their studies in law at a Swiss university (under certain conditions also at a university abroad), lawyers must complete an internship of at least one year and must pass the cantonal bar exam (article 7 FAFML). Lawyers registered in a cantonal register are permitted to represent parties before any Swiss court. Personal requirements include the absence of a criminal conviction for acts incompatible with the legal profession, the absence of a deed of loss against them and the capacity of practising law independently (article 8 FAFML). Further, it is a lawyer's professional duty to have professional liability insurance in place, with a limit of liability of at least one million Swiss francs.
In Switzerland, there are no two categories of lawyers as in the UK where barristers are distinguished from solicitors.
Lawyers from EU/EFTA member states may temporarily represent clients before courts in Switzerland. While they cannot be registered in a cantonal register of lawyers, they have to adhere to the rules of professional conduct as well as to professional secrecy (articles 25, 12 and 13 FAFML). The permanent representation by lawyers from EU/EFTA member states before courts under their original professional title requires the registration with a cantonal supervisory authority over lawyers. The lawyers have to register with the supervisory authority of the canton in which they have a business address, and they must provide evidence of their admission in their home state (articles 27 et seqq FAFML). Finally, lawyers from member states of the EU/EFTA may be registered in the cantonal register for lawyers if they have passed a proficiency test or have been registered as lawyers active under their original professional title during at least three years and have effectively and regularly been active in the area of Swiss law or – if they have been active less than three years – have shown their proficiency to the (cantonal) examining commission (articles 30 et seq FAFML).
Specialised plaintiff or defendant bars are not known in Switzerland.
3 General - Give a brief overview of the political and social background as it relates to civil litigation.
Civil courts are well organised and functioning. However, proceedings are usually quite expensive, which often discourages people from filing suit. Thus, in many cases, parties try to find an amicable settlement.
Access to justice is supported by the government. Several amendments to the CPC are currently discussed. Among others, the reform of the CPC is intended to facilitate access to court (eg, by reducing the advance on costs). Furthermore, it aims at strengthening the conciliation procedure and ensuring better coordination of proceedings. Additional contemplated revision points include the introduction of a legal privilege for in-house counsel and the possibility to allow court proceedings to be held in English. Further envisaged revisions include the enhancement of collective legal redress.
The caseload of the cantonal courts as well as of the Federal Supreme Court is high and increasing.
Typical "professional" or activist plaintiffs are not common in Switzerland. However, 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 (article 89 CPC). Though, this instrument is hardly used in Switzerland (BSK ZPO-Klaus, 3rd ed. 2017, article 89 CPC, paragraph 9).
4 Jurisdiction and venue - What are the criteria for determining the jurisdiction and venue of the competent court for a civil matter?
The criteria for determining the geographic jurisdiction (venue) of a court depends on whether there is a matter of domestic or international litigation. In the first case, the venue is to be determined on the basis of the CPC. In international matters, the competent forum is to be determined on the basis of applicable treaties, such as the Lugano Convention (LugC) or the Federal Act on Private International Law (PILA). In a domestic and international context, as a matter of principle, litigation can be initiated at the seat or domicile of the defendant (article 10 CPC, article 2 PILA, article 2 LugC). Depending on the matter, alternative fora, such as the place of performance in a contractual dispute or the place of the harmful event in tort cases, are available.
Where no mandatory limitations apply, parties may agree upon a specific forum before or during the proceedings (article 17 CPC, article 5 PILA, article 23 LugC). In the ambit of the PILA, a forum agreement may only relate to financial disputes. A forum agreement shall be null and void if one party, in an abusive manner, is deprived of a Swiss venue (article 5 PILA). Moreover, the selected Swiss court may decline jurisdiction if none of the parties is domiciled, resident or established in the relevant canton and Swiss law is not applicable to the case (BSK IPRG-Grolimund/Bachofner, article 5 PILA, paragraph 50).
Jurisdiction ratione materiae is to be determined by cantonal law and, in principle, is not eligible to party selection, but exceptions exist (eg, under certain conditions for the plaintiff regarding the choice between the competence of a commercial or ordinary court).
5 Forum shopping - Does your jurisdiction commonly attract disputes that have a nexus with other jurisdictions?
Securing a forum in Switzerland has become easier on the basis of a recent Federal Supreme Court decision. According to that decision, a negative declaratory action is admitted where the plaintiff has an appreciable interest, worthy of protection, in the immediate determination of a right.
This decision makes it easier for plaintiffs to file a negative declaratory action in Switzerland as the interest of securing a convenient venue is accepted as a sufficient interest in a negative declaratory action if the other party threatens to initiate proceedings abroad. Of course, the other requirements for a Swiss court to have jurisdiction over the dispute will also have to be fulfilled (DFT 144 III 175, c. 5.4).
The tactical considerations regarding a Swiss venue that come into play in a given scenario are manifold and may, among other things, include the following: duration of the proceedings; the applicable substantive law; the absence of "pretrial" discovery or disclosure; etc.
6 Pendency in another forum - How will a court treat a request to hear a dispute that is already pending before another forum?
For an action or application to be decided, the same matter cannot be the subject of pending proceedings (lis pendens, article 59, paragraph, 2 lit. d CPC, article 27 LugC, article 9 PILA). A matter is the same if the parties and the subject matter are identical.
In the case of lis pendens, a court will first stay the proceedings and once it is clear that the dispute is already pending before another court, declare the claim as non-admissible (BSK ZPO-Gehri, article 59 CPC, paragraph 17). In international matters, in the ambit of the LugC, the Swiss court will stay the proceedings if it was seised after the foreign court and if the matter in dispute as well as the parties are identical (article 27 LugC). Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction. In international cases not within the scope of the LugC, article 9 PILA has the same conditions, but additionally requires for a stay that a foreign decision be expected within a reasonable period of time and be recognisable in Switzerland. Once a foreign decision eligible for recognition is submitted to the Swiss court, it shall dismiss the action.
7 Deference to arbitration - How will the courts treat a dispute that is, or could be, subject to an arbitration clause or an agreement to arbitrate, including in interim proceedings?
If a court is seised and confronted with an arbitration agreement, it will review its existence, validity and scope of application.
The Federal Supreme Court adopts two approaches. If the seat of arbitration is in Switzerland, the state court only has to proceed with a prima facie review of the agreement (article 7 PILA; DFT 138 III 681, c. 3.2 et seq). Conversely, where the arbitration has its seat abroad, the state court can fully review its jurisdiction (article II(3) NY Convention; Girsberger/Voser, International Arbitration – Comparative and Swiss Perspectives, 2016, 3rd ed, paragraph 509).
In both cases, the state court is not obliged to act ex officio. It will only refer the parties to arbitration if one of them so requests. Without any objection from a party (although it could raise such objection), the state court has jurisdiction on the basis of the assumption that such party has accepted the court's jurisdiction (Girsberger/Voser, International Arbitration – Comparative and Swiss Perspectives, 2016, 3rd ed., paragraph 507).
In domestic arbitration, article 61 CPC stipulates a prima facie examination. If the parties concluded an arbitration agreement, the seised court shall decline jurisdiction unless the defendant has made an appearance without reservation or where the court determines that the agreement is manifestly invalid or unenforceable or where the arbitral tribunal cannot be constituted for reasons that are manifestly attributable to the defendant. Yet, the preliminary examination whether the dispute exists and is arbitrable, must be examined by the state court with a full (unlimited) standard of review (DFT 140 III 367, c. 2.2.3).
A peculiarity concerns interim proceedings. For international arbitration, article 183 PILA does not establish an exclusive competence of the arbitral tribunal. Therefore, except for the parties' deviating agreement, state courts – in addition to the arbitral tribunal – also have jurisdiction to order interim measures (BSK IPRG-Mabillard, article 183 PILA, paragraph 5).
8 Judicial review of arbitral awards on jurisdiction - May courts in your country review arbitral awards on jurisdiction?
An arbitral award can be set aside if the arbitral tribunal wrongly accepted or declined jurisdiction (article 393 lit. b CPC, article 190, paragraph 2 lit. b PILA).
9 Anti-suit injunctions - Are anti-suit injunctions available?
Anti-suit injunctions are not available in Switzerland within the scope of application of the LugC. Whether anti-suit injunctions are allowed outside of the scope of application of the LugC has not yet been decided. However, the legal doctrine tends to consider anti-suit injunctions as not availing (DFT 138 III 304, c. 5.3.1).
10 Sovereign immunity - Which entities are immune from being sued in your jurisdiction? In what circumstances? In what circumstances can creditors enforce a court judgment or arbitral award against a sovereign or a state entity?
The question of sovereign immunity is linked to the question of court jurisdiction. If sovereign immunity exists, the court shall declare the action as non-admissible.
Sovereign immunity is a respected principle in Switzerland. However, it only applies to acts performing whilst exercising sovereign authority (acta iure imperii) and not to acts which were performed by the state as a private person (acta iure gestionis; DFT 106 Ia 142, c. 3a). Foreign states are only exempted from domestic jurisdiction for acta iure imperii (eg, expropriation or confiscation). Conversely, no immunity exists for acta iure gestionis (ie, for all acts and omissions that, by their nature, are not exclusively reserved to the state (eg, contracts for work and services, supply contracts, etc)). If a foreign state has been convicted for an acta iure gestionis conduct, a further distinction as to the enforcement of the judgment must be made. Although it is principally possible to enforce a judgment against a foreign state, the assets in question must not serve the performance of governmental functions (Staehelin/Staehelin/Grolimund/Bachofner, Zivilprozessrecht, 3rd ed., Zurich 2019, p. 87 et seq).
The existence of an acta iure gestionis alone, however, is not sufficient for suing a state in Switzerland. Rather, a sufficient connection to Switzerland is required (eg, if the obligation from which the claims are derived was incurred in Switzerland or if it is to be performed here or if the foreign state has at least performed acts by which it has established a place of performance in Switzerland). Yet, it is not sufficient that the assets of the foreign state be located in Switzerland or that the claim be awarded by an arbitral tribunal in Switzerland (DFT 134 III 122, c. 5.2.2; 144 III 411, c. 6.3.2).
For a judgment against a state to be enforced in Switzerland, it must first be recognised by a Swiss court. Then, the creditor will proceed with the enforcement which – in case of monetary claims – is governed by the Swiss Debt Enforcement and Bankruptcy Act (DEBA). An effective measure is the initiation of an attachment proceeding (article 271 et seqq DEBA). A creditor can request the judge to attach a certain state's assets.
The state concerned may also waive its sovereign immunity (Staehelin /Staehelin/Grolimund/Bachofner, Zivilprozessrecht, 3rd ed., Zurich 2019, p. 87).
Foreign state banks may enjoy sovereign immunity in respect of assets serving sovereign functions. Foreign companies held by the state (eg, airlines) do not enjoy sovereign immunity. The legal situation with international organisations is regulated by agreements (Staehelin /Staehelin/Grolimund/Bachofner, Zivilprozessrecht, 3rd ed., Zurich 2019, p. 88 et seq). However, the Federal Supreme Court stated that international organisations benefit from immunity for all their actions (DFT 136 III 379, c. 4.3.1).
Originally published by GAR Know-How Litigation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.