The Swiss Arbitration Centre published the Supplemental Swiss Rules for Trust, Estate and Foundation Disputes ("TEF Rules") on 22 May 2025. They come into effect on 1 July 2025, and apply to trust, estate and foundation disputes commenced on or after that date. The TEF Rules can be found here. The Swiss Arbitration Centre has also published an Explanatory Note along with the TEF Rules, which is accessible here.
Switzerland, with its well-developed financial system and economic and political stability and security, has long been a jurisdiction of choice for the world's wealthiest individuals and families.1 With that, Switzerland has also seen an increase in private wealth disputes in recent years. Those disputes are increasingly global, involving a multitude of jurisdictions, and they often include complicated asset structures, such as trusts and foundations, and nearly always involve more than two parties.
Recognizing this trend and the opportunities arbitration may present for the effective and confidential resolution of private wealth disputes, Switzerland amended its arbitration law several years ago to expressly confirm the validity of arbitration clauses in unilateral legal instruments such as last wills, trust deeds2 and foundation bylaws, provided the designated arbitral seat is in Switzerland.3
The TEF Rules deliberately do not define what constitutes a trust, estate and foundation dispute ("TEF Dispute") in order not to be unnecessarily prescriptive. TEF Disputes can arise both from unilateral legal instruments, including disputes opposing beneficiaries of a foundation and its board of directors or disputes between (putative) heirs regarding the validity of a will, and from bi- or multilateral instruments, such as inheritance contracts.
While some other institutions also provide model clauses for trust or succession matters or have otherwise modified their rules to recognize the possibility of unilateral arbitration clauses,4 none provide a comprehensive framework for resolving TEF Disputes. The new TEF Rules ensure that parties who seek to make use of the opportunity to arbitrate trust, estate and foundation-related disputes can do so effectively under the Swiss Rules of International Arbitration ("Swiss Rules"), taking into account the specificities of such disputes. Underscoring the flexible and adaptive nature of the Swiss Rules, this did not require a full set of specialized rules. Rather, the TEF Rules supplement the Swiss Rules and contain just four targeted provisions.
I. The Provisions of the TEF Rules
a. Article 1: Scope of Application
In addition to applying where specifically referenced,5 the TEF Rules apply to "all arbitration proceedings initiated pursuant to an arbitration clause providing for arbitration pursuant to the [Swiss Rules] where such arbitration clause is contained in a unilateral legal instrument regulating trust, estate or foundation matters (the 'Unilateral Arbitration Clause')."6
Thus, the TEF Rules automatically apply where an arbitration clause is contained in a unilateral legal instrument "regulating trust, estate or foundation matters."7 This will certainly be the case for wills, foundation bylaws or trust deeds, but it may also apply to other instruments. Absent agreement by the parties, it will be for the Court of Arbitration of the Swiss Centre and/or an arbitral tribunal to determine whether the definition is met and thus whether the automatic application of the TEF Rules is triggered.
In contrast, however, the TEF Rules do not automatically apply when the relevant arbitration clause is not unilateral, even if the dispute concerns trust, estate or foundation matters.8 This opt-in mechanism for parties to bi- or multilateral contracts and arbitration agreements ensures that they retain the option to agree on the Swiss Rules without also necessarily triggering the application of the TEF Rules, thereby maintaining party autonomy and contractual flexibility.9
It bears emphasis that the TEF Rules do not address substantive questions of the validity and scope of such Unilateral Arbitration Clauses. While, at least for arbitrations seated in Switzerland, the arbitrability and objective validity of such clauses appear uncontroversial since the revision of the lex arbitri discussed above, the personal scope of Unilateral Arbitration Clauses remains unclear. For example, it remains unsettled under Swiss law whether disinherited legal heirs are bound by an arbitration clause in the testator's will from which they have been excluded, if they seek to assert their rights.10 These questions will ultimately have to be resolved by the arbitral tribunal, or a national court in set-aside or enforcement proceedings, and it therefore is critical that parties seek legal advice from the outset, ideally at the drafting stage of such Unilateral Arbitration Clauses.
b. Article 2: Information, Notification and Representation of Entitled Persons
An added complexity of TEF Disputes is that they often involve rights and entitlements of multiple parties, including unborn children or other individuals lacking the capacity to act in their own right.
Recognizing this aspect, the TEF Rules set out specific rules for the notification and representation of any such "Entitled Persons."11 Not only is ensuring an opportunity for all such Entitled Persons to participate in an arbitration with adequate representation a matter of fairness, but jurisdictions often have mandatory laws requiring such parties be joined in estate disputes. Thus, while the TEF Rules do not set out the consequences of noncompliance with these notification obligations, this may ultimately impact the enforceability of an award or risk disrupting the proceedings through applications for interim measures or injunctions sought by such Entitled Persons whose information, notification or representation rights were violated.
The TEF Rules do not provide for specific joinder rules for any Entitled Persons who may wish to participate in the arbitration proceedings as a party, or in another capacity. Rather, the standard joinder and intervention provisions in Article 6 of the Swiss Rules will apply.12
To ensure that confidentiality can be maintained, the TEF Rules specifically provide that the standard confidentiality obligations under the Swiss Rules extend to such Entitled Persons, even where they do not become parties in the arbitration.13
c. Article 3: Appointment of the Arbitral Tribunal
While the TEF Rules refer to the general provisions under the Swiss Rules regarding the appointment of arbitrators, they recognize that the rights of Entitled Persons require special consideration in the appointment process.
In particular, Article 3 of the TEF Rules ensures that Entitled Persons can comment on the appointment of the arbitral tribunal, including on any disclosures made by any arbitrator. Entitled Persons are required to be heard in the appointment process, even where they choose not to become a party to the proceedings.
Where it seems appropriate to safeguard the rights of any Entitled Persons, in particular where some Entitled Persons may not be represented, the Court of the Swiss Arbitration Centre may also decide to appoint some or all of the arbitrators directly.14
d. Article 4: Applicable Substantive Law in Estate Matters
Article 35 of the Swiss Rules provides that if the parties did not agree on choice of law, the arbitral tribunal shall decide the applicable law by "applying the rules of law with which the dispute has the closest connection." In addition, where expressly authorized by the parties, the arbitral tribunal can also decide ex aequo et bono or as amiable compositeur.15
Recognizing that many jurisdictions have mandatory choice of law rules that may restrict, for example, a testator's freedom to subject his or her estate to a foreign law, Article 4 of the TEF Rules stipulates that Article 35 of the Swiss Rules does not apply to estate disputes. Because this provision is limited to estate disputes, Article 35 of the Swiss Rules will continue to apply to trust and foundation disputes, even where they are governed by the TEF Rules.16
Providing for the possibility of arbitration to resolve estate disputes was not intended to undermine the broader public policy considerations often at issue in estate law. Some jurisdictions, including Switzerland, have mandatory forced heirship provisions that provide for statutory entitlements depending on the degree of relation to the decedent. To ensure those provisions are not circumvented, these jurisdictions often limit a testator's freedom to choose the law applicable to their estate. In order to prevent the choice of arbitration from undermining these substantive requirements, the TEF Rules make clear that, in estate matters, where there is no choice of law (or the choice of law is determined to be invalid), the arbitral tribunal shall determine the applicable substantive law in accordance with the choice of law rules at the decedent's last domicile.17
Given the increasing complexity and globalized nature of many estates, it is critical that testators seek legal advice when drafting their wills or inheritance contracts to ensure any conflict of law clauses are compatible with mandatory requirements in all potentially affected jurisdictions.
e. Model Clauses
The TEF Rules also include model arbitration clauses tailored to different legal instruments, such as last wills, inheritance contracts (before or after the death of the decedent, respectively), trust deeds and foundation bylaws.18 These model clauses are intended to give guidance and highlight additional aspects that parties may wish to address.
However, TEF Disputes, and in particular trust and estate law matters, often involve a complicated thicket of mandatory norms, usually of multiple jurisdictions, and often a lack of clear, binding case law. It is thus impossible for the model clauses in the TEF Rules to address all possible permutations and risks. In particular, as noted above, the TEF Rules do not venture into questions of subjective and objective validity of Unilateral Arbitration Clauses, nor could they, in any event, displace mandatory norms in this regard. These questions will, therefore, merit careful, multi-jurisdictional legal assessment, ideally from the outset.
II. Commentary
Arbitration offers certain key advantages to the resolution of private wealth disputes, including that it allows the parties to choose arbitrators with the required specialized expertise. By contrast, depending on which national courts would have jurisdiction, the courts may lack the required know-how and resources to handle large TEF Disputes. This is especially critical where more complex inheritance structures, including trusts and foundations, are involved. Additionally, service of process is typically easier in arbitration proceedings as compared with national courts, especially where parties (and other Entitled Persons) are located in multiple jurisdictions. Arbitration also allows for a larger degree of confidentiality than national court proceedings, which may be attractive where sensitive and personal information may form the subject matter of a dispute and where ultra-high-net-worth individuals or important family businesses that may attract significant public interest are involved.
Moreover, arbitration allows parties to minimize the risk of parallel proceedings and jurisdictional conflicts, especially for global estates.19 The TEF Rules cannot completely exclude the risk of such parallel proceedings; in particular, courts may have mandatory supervisory jurisdiction over trusts and trustees, or exclusive jurisdiction over real estate assets located within the jurisdiction.20
While not eliminating all jurisdictional and substantive questions that may arise, the TEF Rules provide a welcome addition to ensure that parties who want to avail themselves of arbitration for trust, estate and foundation disputes have an effective framework to resolve these disputes. This offering sets the Swiss Arbitration Centre apart from other arbitral institutions in this important and growing area and will further strengthen the attractiveness of Switzerland as a preferred arbitral seat.
Footnotes
1. Switzerland has the second-highest proportion of USD millionaires per capita globally, at just below 15%. See USB Global Wealth Report 2024, available here, at p. 24.
2. While certain trust jurisdictions may not consider a trust deed to be a unilateral instrument, arbitration clauses included in trust deeds are included in the TEF Rules' definition of "Unilateral Arbitration Clauses." See Explanatory Note on TEF Rules, Introduction, at p. 1, fn. 2.
3. See for international arbitration, Article 178(4) of the Swiss Private International Law Act ("The provisions of this Chapter apply by analogy to an arbitration clause in a unilateral transaction or in articles of association."); see also for Swiss domestic arbitrations, Article 358(2) of the Swiss Civil Procedure Code ("The provisions of this Part apply by analogy to arbitration clauses in unilateral transactions or in articles of association."). All emphasis in quotes is added, unless specified otherwise.
4. See e.g., ICC Arbitration Clause for Trust Disputes and Explanatory Note, available here; VIAC Supplementary Rules for Disputes relating to Succession, Annex 6 to the Vienna Rules of Arbitration and Mediation, available here; Liechtenstein Arbitration Association, Liechtenstein Rules, 2015, at pp. 90-91, available here.
5. This can be either by specific reference to the TEF Rules or by reference to a predecessor set of rules developed by the Swiss Association for Arbitration in Inheritance Matters ("SVSiE"), namely the Introductory Rules of the Swiss Association for Arbitration in Inheritance Matters. With entry into force of the TEF Rules, the SVSiE has been dissolved. See TEF Rules, Article 1(1).
6. TEF Rules, Article 1(1).
7. TEF Rules, Article 1(1).
8. See Explanatory Note on TEF Rules, Article 1(1), at p. 5.
9. See Explanatory Note on TEF Rules, Article 1(1), at p. 5.
10. See Explanatory Note on TEF Rules, Article 1(1), at p. 5, fn. 6, with further references.
11. See TEF Rules, Article 2(1) ("Subject to the express provisions in the Unilateral Arbitration Clause, the parties shall be responsible for ensuring that all entities or persons, born or unborn, whose rights or entitlements might be affected by their dispute ('Entitled Persons') are named as parties to the arbitration or otherwise informed thereof and given the opportunity to have their interests represented in accordance with any applicable rules of mandatory law or the unilateral legal instrument.").
12. Accordingly, an Entitled Person may (i) file a Notice of Claim to join the proceedings as an additional party pursuant to Article 6(1) of the Swiss Rules, or (ii) request to participate in the proceeding "in a capacity other than an additional party" pursuant to Article 6(4) of the Swiss Rules.
13. See TEF Rules, Article 2(6) ("The confidentiality obligations applicable to the parties pursuant to Article 44(1) of the Swiss Rules apply equally to Entitled Persons.").
14. See TEF Rules, Article 3(3) ("Where not all Entitled Persons are legally represented or where it appears appropriate in the circumstances, the Court may appoint some or all of the arbitrators, and, if applicable, shall appoint the presiding arbitrator.").
15. See Swiss Rules, Article 35(1) and (2) ("1. The arbitral tribunal shall decide the case by applying the rules of law agreed upon by the parties or, in the absence of a choice of law, by applying the rules of law with which the dispute has the closest connection. 2. The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised the arbitral tribunal to do so.").
16. See Explanatory Note on TEF Rules, Article 4, at p. 11.
17. See Explanatory Note on TEF Rules, Article 4, at pp. 10-11.
18. See TEF Rules, at pp. 6-7.
19. For instance, the European Succession Regulation (EU) No. 650/2012 (Brussel IV) allows for parallel court proceedings where a decedent with last habitual residence outside the EU had assets within the EU (see Articles 4 et seq.). See also Explanatory Note on TEF Rules, Introduction, at p. 2.
20. See Explanatory Note on TEF Rules, Introduction, at p. 2.
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