Litigation 2019 Second Edition Comparisons

Last Updated December 05, 2019

Contributed By Homburger

Law and Practice

Authors



Homburger helps businesses and entrepreneurs master their greatest challenges, combining the know-how, drive and passion of the firm's specialists to support clients in reaching their goals. Whether it's advising clients on transactions, representing them in proceedings or helping with regulatory matters, the firm is dedicated to delivering exceptional solutions, no matter the complexity and time constraints. Collaborating smartly and efficiently within the firm, with clients and with other parties involved is crucial to the firm's performance. Homburger's litigation team is one of the largest and most effective in Switzerland. The team supports clients in the avoidance of disputes and represents enterprises, entrepreneurs, foundations and private persons in civil and commercial matters before all Swiss courts, and in administrative proceedings before Swiss authorities. Furthermore, Homburger supports clients in their litigation in other countries and co-ordinate parallel contentious matters in various jurisdictions.

Switzerland is a civil law jurisdiction. The federal government has legislative authority in the field of substantive and procedural civil law, whereas the cantons are responsible for the organisation of the courts and the administration of justice. The laws passed by the federal parliament and the cantonal parliaments are interpreted based on their wording, purpose and legislative history. In addition, doctrine and case law are taken into account. However, the courts do not apply the common law rule of binding precedent. Civil proceedings generally follow an adversarial approach, except where the law provides that the facts shall be established ex officio. The drafters of the Civil Procedure Code (CPC) intended that the proceedings should include both written submissions and oral pleadings at a trial. In practice, however, many proceedings are conducted in writing only. Small claims are dealt with in simplified proceedings in which oral pleadings have more significance.

The courts are not generally divided into federal and state courts. Rather, the cantonal courts are also responsible for adjudicating cases involving federal civil law. An exception to this principle is the Federal Patent Court, which has exclusive jurisdiction throughout Switzerland for patent disputes. At the cantonal level, there typically is a first instance and an appellate court. The court of last instance is the Federal Supreme Court. Four cantons have established specialised commercial courts. The decisions of these courts may directly be appealed to the Federal Supreme Court (see 10.1 Levels of Appeal or Review to a Litigation). The cantonal civil courts have general jurisdiction. In larger courts, however, there are specialised departments, eg, for employment or inheritance matters.

Court filings are not open to the public. After the proceedings have been concluded, however, third parties may be granted access to the files of the proceedings if they can demonstrate a scientific interest or another interest worthy of protection. The hearings before the civil courts are generally accessible to the public, and the decisions rendered by them are made publicly available. However, the public may be excluded, in whole or in part, if the public interest or legitimate interests of a person involved so requires. Family law matters are always handled in camera.

The professional representation of parties in civil and criminal proceedings is reserved for lawyers who are admitted to the bar. Representing a party before the Federal Supreme Court also generally requires admission to the bar. Bar admission is regulated by the cantons, but entitles practice anywhere in Switzerland. Qualified attorneys from the European Union may practice in Switzerland if they only do so occasionally. If they wish to practice permanently in Switzerland, they must obtain a simplified admission.

Pursuant to case law of the Federal Supreme Court, litigation funding is permitted in Switzerland. Possible limitations to litigation funding primarily arise from the duties of lawyers to exercise their activity independently and to avoid any conflict of interest. For example, lawyers must take care that they do not put a funder's interests before those of their client. There are several active litigation funding providers in the market. In general, however, litigation funding is still a relatively new phenomenon in Switzerland.

Litigation funding is in principle available for all types of lawsuits. However, litigation funders normally focus on commercial disputes, such as corporate, real estate, intellectual property, banking, insurance and cartel damage cases.

Both the plaintiff and the defendant may have their case financed by a third party. Typically, however, is the plaintiff who uses litigation funding. The defendant is more likely to have taken out a legal expense insurance, which is also available in Switzerland.

The amount of the contribution a litigation funder is prepared to make to a lawsuit depends on the individual case. In any case, most litigation funders are only interested in financing a lawsuit if the amount in dispute exceeds a certain threshold. One of the litigation funders that are active in Switzerland, for example, only funds claims in excess of CHF7.5 million.

Litigation funders typically cover all costs of the litigation, ie, court fees, reasonable attorneys' fees and the compensation for the counterparty's legal costs, which has to be paid if the case is lost.

The bar rules in Switzerland prohibit lawyers from entering into pure contingency fee agreements. Pursuant to case law of the Federal Supreme Court, lawyers are required to charge their clients a fee that fully covers their costs and allows them to make at least some profit, irrespective of how the case turns out. However, as long as these requirements are met, lawyers are free to enter into alternative fee arrangements, including flat fees and premiums in case of success.

There are no time limits for obtaining third party funding. However, with regard to alternative fee arrangements, the Federal Supreme Court has held that an agreement, according to which a lawyer is entitled to a premium in case of success, may only be entered into at the beginning of the lawyer's engagement or at the end of the legal dispute.

In general, there is no mandatory pre-action conduct in Swiss litigation. In particular, a plaintiff is not required to first notify the counterparty of their intent to file an action. A prospective defendant, on the other hand, is generally not obliged to answer any warning letters. It should be noted, however, that civil proceedings in Switzerland, with a few exceptions, may not be filed directly with the courts. Instead, a request for conciliation must first be addressed to the competent conciliation authority. If no agreement can be reached in this conciliation procedure, the conciliation authority will issue an authorisation to bring an action, which entitles the plaintiff to file the action with the competent court within three months. 

Civil claims are time barred ten years after they became due unless the law provides otherwise. Claims for rent, interest on capital and other periodic payments become time barred after five years. The same is true for claims relating to the delivery of foodstuffs, hotel expenses, and the work carried out by artisans, lawyers, doctors, notaries or employees. Tort claims become time barred one year (as of 1 January 2020: three years) after the aggrieved person learned of the damage and of the tortfeasor's identity, but in any case ten years (as of 1 January 2020, in personal injury cases only, 20 years) after the date on which the damage was caused. Finally, some inheritance claims become time barred after 30 years only.   

In cross-border disputes, the courts in Switzerland have jurisdiction over a defendant if the Private International Law Act (PILA) or an international treaty such as the Lugano Convention (LugC) provides so. In domestic cases, the jurisdiction of the Swiss courts is governed by the Civil Procedure Code (CPC), which applies uniformly throughout Switzerland. Typically, a defendant may be sued in Switzerland if they are domiciled there or if they have contractually agreed that a court in Switzerland should have jurisdiction. The courts in Switzerland also have jurisdiction if the place of performance of a contract is in Switzerland, if the defendant has committed a tort in Switzerland, or if the harmful effect of such tort occurred in Switzerland. 

The initial document that is filed to start a lawsuit is a detailed statement of claim, which presents the relevant facts and the evidence available for them as accurately as possible. It is not customary in Switzerland to amend the statement of claim one or more times after it has been filed. However, each party is entitled to file two briefs or to present its case at a hearing after a first round of submissions has been completed. In the second round of briefs or pleadings, new facts may be presented without limitation. In addition, the plaintiff may amend his or her claim if the amended claim is subject to the same type of proceedings and if a factual connection exists between the new or amended claim and the original claim.

Service of documents within Switzerland falls within the responsibility of the courts. Documents are usually served by registered mail or, if a party has consented to this method of service, by encrypted email. Service of court documents abroad or from abroad is effected through international judicial assistance.

If the defendant does not file a response within the time limit set for that purpose, the court grants them a short extension. If the defendant also fails to reply within this extended time limit, the court renders its judgment, assuming that the plaintiff's factual assertions have remained undisputed and thereby accepted.

Class actions are not available in Switzerland. Under certain conditions, associations may initiate legal proceedings on behalf of their members. Currently, however, they may not assert any monetary claims in this way. The Federal Council has proposed to change this and allow associations to bring actions for damages, too. However, it is not yet clear whether and how such collective redress mechanism will be implemented into the law. Today, dispersed and relatively low-value damages are sometimes aggregated by assigning them to one plaintiff.

There is no express statutory obligation to inform a client of the anticipated total cost of a litigation. However, lawyers in Switzerland consider it part of their duty of care to inform their clients of the approximate costs of litigation.

US-style motion practice is unknown in Swiss civil proceedings. In principle, the courts are responsible for case management. However, the parties may file procedural requests at any time. For example, they may apply for interim measures, time extensions or a suspension of the proceedings.

A party may apply for an early determination of certain issues if this results in substantial savings of time and cost. For example, a party may request that the proceedings be limited to the question of jurisdiction or to another issue that is dispositive for the outcome of the case. However, it is in the discretion of the court to accept or deny such request. Typically, this type of request is made in the defendant's statement of defense.

Dispositive motions in Swiss litigation mainly relate to the question of whether the court has jurisdiction, whether the plaintiff has standing to sue, or whether the asserted claim has become time barred. In each of these examples, the defendant could request that the proceedings be limited to the dispositive issue in question. In contrast, the parties to Swiss proceedings are not entitled to move for a summary judgment if there is no disputed issue of material fact. 

A person who claims to have a better right in the object of a pending dispute may join the litigation by bringing a direct claim against the parties to the respective proceedings. Moreover, a person who shows a credible legal interest in having a pending dispute decided in favour of one of the parties may intervene at any time as an accessory party and for this purpose submit to the court an intervention application. The court decides on the application after hearing the parties. Lastly, a third party who received a third-party notice may either intervene in favour of the notifying principle party, without further conditions, or proceed in place of the notifying party, with the latter's consent. 

A defendant is entitled to request that the plaintiff post security for the defendant's legal costs if the plaintiff has no residence or registered office in Switzerland (unless there is a treaty under which the defendant may not be requested to provide such security). Security for the defendant's costs may also be requested for if the defendant appears to be insolvent, if they owe costs from prior proceedings, or if for other reasons there seems to be a considerable risk that a possible compensation for legal costs would not be paid.

As a rule, the courts decide on procedural costs in the final award. In the case of interim measures, however, the courts may rule on the costs of such measures in the respective interim decision.

The courts in Switzerland are generally efficient and rule swiftly on applications. However, the exact timeframe for a court to render a decision depends very much on the individual circumstances.

Pre-trial discovery is not available under the Civil Procedure Code (CPC). However, if a party can demonstrate that the subsequent taking of evidence is in jeopardy, or if it can show credibly that it would have a claim against the defendant if a particular circumstance could be established, it is entitled to request the precautionary taking of evidence even before filing an action on the merits. 

Discovery is available neither between the parties to certain proceedings nor vis-à-vis third parties.

There are no specific rules on discovery because no discovery takes place at all.

The courts generally rely on the evidence submitted or otherwise presented by the parties on their own initiative. The courts may also question the parties and order them to hand in specific documents. However, if a party refuses to cooperate in the taking of evidence, the courts may only consider this when assessing the evidence on file. In contrast, third parties may be forced to appear as witnesses or to surrender certain documents. The courts may also commission expert opinions or inspect locations or other pieces of evidence outside the courtroom.

Attorney work products as well as all communications between an attorney and their client are privileged and do not have to be disclosed. The work of in-house counsel is currently not privileged. However, the Federal Council intends to introduce such privilege in the upcoming revision of the Civil Procedure Code (CPC).

As outlined above, the parties may generally not be forced to disclose documents. Moreover, the parties and third parties are entitled to refuse their testimony or disclosure of a document if doing so would violate certain professional secrecy obligations or if this would expose them or a person close to them to criminal or civil liability.

A party seeking injunctive relief has to credibly show that a right to which it is entitled has been violated or that such a violation is impending and that the violation threatens to cause not easily reparable harm. Furthermore, the applicant has to establish prima facie that the relief sought is proportionate. If the requirements for injunctive relief are met, the court can order any interim measure suitable to prevent the imminent harm, such as, in particular, a prohibitory injunction, a restraining order or an order/instruction to a register authority or a third party. Swiss courts can also issue attachment orders prohibiting a party from disposing of certain assets. Swiss attachment orders operate in rem (as opposed to, for example, UK-type freezing orders).

In the case of a special urgency, Swiss courts are usually willing to decide on an application for injunctive relief quickly, ie, within a day or even within hours. The practice, however, varies from region to region. In some local jurisdictions, it is possible (and recommendable) to inform the judge in advance of an urgent application for injunctive relief to ensure that the application is dealt with promptly after filing. In exceptional cases, Swiss courts may also be prepared to accept and deal with urgent requests outside normal office hours.

In the case of a special urgency, injunctive relief can be obtained on an ex parte basis, ie, without the defendant being heard in advance of an order. Ex parte injunctive relief may be granted in particular if there is a risk that the enforcement of the interim measure will be frustrated if the opponent party is informed on the application in advance. Attachment orders (see 6.1 Circumstances of Injunctive Relief) are always issued on an ex parte basis. If an ex parte interim injunction is granted, the court has to summon the parties to a hearing, which must take place immediately, or set a deadline for the opposing party to comment in writing. After having heard the opposing party, the court has to decide anew on the application immediately. The court may also request the applicant to provide security before ordering an ex parte interim measure.

Anyone who has reason to believe that ex parte interim measure (including, in particular, an attachment order) will be applied for against them can file a protective brief with the competent court. The opposing party will not be served with the protective brief, unless they initiates the anticipated ex parte proceedings. If no such proceedings are initiated within six months after filing, the protective brief becomes ineffective automatically.

The party applying for injunctive relief is liable for any loss or damage caused by unjustified interim measures. However, if the applicant proves that he or she applied for the measures in good faith, the court may reduce the damages or entirely release the applicant from liability. A Swiss court may also make the granting of injunctive relief conditional on the payment of security by the applicant if it anticipates that the measures may cause loss or damage to the opposing party.

Generally, injunctive relieve against worldwide assets is not available in Switzerland. In order to obtain an attachment order in Switzerland, the applicant has to credibly establish, among other things, that specific assets (or at least specific categories of assets) belonging to the debtor are located in Switzerland.

Injunctive relief can be obtained against third parties if such an order is suitable and necessary to prevent imminent harm. In particular, Swiss courts can issue attachment orders prohibiting third parties (such as a bank) from disposing of assets that belong the debtor/opposing party.

Orders for injunctive relief can be issued under the threat of administrative and/or criminal sanctions in case of non-compliance. For example, a prohibitory injunction may be issued under the threat of an monetary penalty per day of non-compliance or under the threat of monetary penalty for the officers/directors of a company in the case of non-compliance.

US-style jury trials and long hearings are foreign to Swiss law. Usually, in commercial litigation, the proceedings are primarily conducted in writing. The plaintiff typically initiates the proceedings by filing a substantiated and detailed statement of claim, which as a rule should contain all relevant allegations of facts. Often, the defendant is thereafter invited to submit a detailed statement of defense, wherein they have to explain specifically which of the claimant's factual allegations are disputed. The court may summon the parties to one or several hearings. Witnesses and/or experts are examined by the court (or a delegation of the court) during the main hearing.

Swiss courts may hold instruction hearings at any time during the proceedings. The purpose of an instruction hearing is manifold; such hearings can be held, eg, to discuss the matter in dispute in an informal manner, for case-management purposes, for settlement purposes or to prepare for the main hearing.

In Switzerland, no jury trials are available in civil cases.

Evidence is required to prove facts that have been duly introduced into the proceedings by a party and which are legally relevant and disputed. Evidence may also be required to prove common practice, local usages or foreign law. Each party is entitled to have the court accept the evidence that he or she offers in the required form and time. Evidence that was obtained illegally shall be considered only if there is an overriding interest in finding the truth. The following means of evidence are admissible in civil proceedings:

  • oral witness testimony;
  • documents or other physical records (such as data, video, photos, etc.);
  • inspection of objects by the court;
  • opinions of court-appointed experts;
  • written declarations (namely of authorities); and
  • the interrogation of the parties.

However, as a rule, evidence is taken only if duly adduced by one of the parties before the closure of the records.

Oral and/or written expert opinions are one of the admissible means of evidence in Swiss civil proceedings. Experts have to be appointed by the court. Under the current version of the Civil Procedure Code (CPC), expert opinions that were commissioned by one of the parties are deemed to be mere party allegations and are not considered evidence. Court-appointed experts are instructed by the court and are typically asked to submit their opinion in writing. The court may also summon the expert to a hearing and ask them to explain the written opinion orally. Experts (as well as witnesses) are usually examined by the court; US-style cross examination is foreign to Swiss law. However, the parties must be given the opportunity to propose supplementary questions to be put on the expert.

Hearings are generally open to the public. Exceptionally, the public can be excluded from hearings, for example, if there is a risk that the privacy rights of a party may be violated if the hearing was open to the public. Furthermore, the public is typically excluded from hearings during settlement negotiations. Hearing transcripts as well as the records of the court are generally not available to the public.

The Civil Procedure Code (CPC) stipulates that the court is the director of the proceedings. The court has to issue the required procedural orders to enable the proceedings to be prepared and conducted in an efficient manner. Once a case is ripe for decision, the court has to deliberate and thereafter issue the judgment. Judgments are usually issued at a later date after the hearing, but they may also be given at the main hearing.

There are no general timeframes for proceedings in Switzerland. The timeframes vary from case to case and heavily depend on the type of proceedings, the complexity of the case and other factors. Generally, civil proceedings in Switzerland are comparably fast and not overly complicated.

The parties are free to settle a dispute or lawsuit, but only to the extent they can freely dispose over their claims. No court approval is required. An out-of-court settlement is simply an agreement between the parties. If a lawsuit has been initiated and the parties reach an out-of-court settlement, they may confirm to the court that a settlement has been reached, upon which the court will discontinue the proceedings. If the parties wish, they can submit the settlement to the court in which case the court settlement will be part of the court's order to discontinue the proceedings.

In an out-of-court settlement, the parties can include a confidentiality clause. The out-of-court settlement is generally not submitted to the court and thus not part of the court's order to discontinue the proceedings. On the other hand, a court settlement is part of the court's order to discontinue the proceedings which, in general, is public.

Out-of-court settlements are enforced like contractual claims. On the other hand, a court settlement generally incorporates the terms of the settlement in the court's order by which it discontinues the proceedings. Such court order can then be enforced like any other judgment.

Out-of-court settlement agreements, being agreements between the parties, can only be "challenged" through the available contractual remedies, eg, rescission of the settlement agreement based on error or fraud. On the other hand, court settlement agreements are set aside by means of an exceptional and narrow appeal. The grounds for such appeal are in essence the same by which private agreements are invalidated, eg, error and fraud.

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 plaintiff may only apply for a declaratory judgment if they have a legitimate interest in the declaration. Such interest is generally denied as long as affirmative relief is available.

The aggrieved party is entitled to actual damages to the extent they are proven by the aggrieved party. Aside from limited exceptions, punitive damages are not available in Switzerland. On the other hand, if Swiss substantive law applies, the parties are free to determine an amount as contractual penalty. However, at its discretion, the court may reduce penalties that it considers excessive.

A successful party may collect pre and post judgment interest to the extent provided by the applicable substantive law. Under Swiss substantive law, the statutory interest rate for default interest and interest on damages is 5% per annum. The parties can agree on interest rates higher than 5%. There is a limit of 15% per annum for consumer credits. Agreed interest rates for other contracts must not be usurious.

Judgments ordering a party to pay money are enforced pursuant to the Federal Law on Debt Collection and Bankruptcy (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 that assets of the debtor be seized 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 CHF5,000, issue a disciplinary fine of up to CHF1,000 for each day of non-compliance, order compulsory measures (such as taking away a movable item or vacating immovable property), or order performance by a third party.

Enforceable judgments qualify as a ground for attachment orders pertaining to assets located in Switzerland.

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 commenced the proceedings. A foreign judgment 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 authority rendering the judgment 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 judgment 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.

As with domestic judgments, foreign affirmative judgments are enforced by the courts. Judgments for the payment of money, in the first stage, are enforced by local debt collection offices, as long as there is no formal objection by the debtor, in which case the court must be seized.

Enforceable foreign judgments qualify as a ground for attachment orders pertaining to assets located in Switzerland, provided they are eligible for recognition and enforcement under Swiss law.

Switzerland is divided into 26 cantons. Pursuant to the principle of double instance, the cantons are generally required to provide for two cantonal instances, ie, a cantonal court of first instance and a second (appellate) cantonal instance. However, four cantons (Zurich, Bern, Aargau and St Gall) have established a commercial court which operates as the sole cantonal instance in certain commercial disputes.

Switzerland's highest court is the Federal Supreme Court in Lausanne. As a rule, final judgments of the second (or sole) cantonal instance can be appealed to the Federal Supreme Court. The grounds for review are however limited to violations of federal law (including constitutional law) and obviously incorrect establishment of the facts.

As a rule, an appeal or an objection can be filed against any final judgment of the first cantonal instance. Generally, an appeal has suspensive effective, whereas an objection has not. Thus, a first instance's judgment which is only subject to an objection becomes enforceable immediately once it is served on the parties.

The deadline for an appeal is 30 days in ordinary proceedings and ten days in summary proceedings. The appeal or objection has to be lodged with the appellate court, which has to decide whether the appeal or objection is admissible.

In the case of an appeal, the grounds for review are not limited, which means that an appeal may be filed on grounds of incorrect application of law and incorrect establishment of facts. In the case of an objection, the grounds for review are limited to incorrect application of the law and an obviously incorrect establishment of the facts.

In the case of an appeal, new facts and new evidence are admissible only to a very limited extent, namely if they are submitted immediately and could not have been submitted in the first instance despite reasonable diligence. In the case of an objection, new facts and new evidence are not admissible.

There are no court-imposed conditions on granting the right to appeal. However, the appellate court can order the appellate party to pay an advance on costs, failing which the appeal or the objection is declared inadmissible.

A cantonal appellate court may confirm the first instance's judgment, issue a new decision or remit the case to the first instance if an essential part of the claim was not considered or if essential issues of facts have to be established still. The Federal Supreme Court can either issue a new decision or remand the case to the cantonal court for a new decision in line with the Federal Supreme Court's considerations.

As a general rule, the procedural costs follow the event. Unnecessary costs are charged to the party that caused them. If a case is settled in court, the costs are charged to the parties according to the terms of the settlement

The procedural costs include the court fees (judgment fee, costs of taking of evidence, translation costs, etc) and the party costs (reimbursement for necessary expenses, compensation for legal representation according to a tariff). Normally, the plaintiff is required to pay an advance on costs at the beginning of the proceedings. When the proceedings are terminated, the court costs are set off against the advances paid by the parties and the balance, if any, is collected from the party liable to pay.

The cantons have to set tariffs for the procedural costs. The costs are usually determined based on the amount in dispute. The courts have to advise parties without legal representation on the anticipated amount of costs and on the possibility of obtaining legal aid.

Interest on costs is not awarded expressly, but is subject to the general principles of Swiss law.

The most common type of alternative dispute resolution (ADR) are conciliation proceedings before cantonal conciliation authorities. The reason is that under Swiss civil procedure law, the court proceedings must generally be preceded by such conciliation proceedings.

As an alternative, Swiss civil procedure law provides for mediation in lieu of ordinary conciliation proceedings upon request of the parties. Mediation is possible before and during court proceedings. 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. Nevertheless, mediation is far less often used than the mandatory conciliation proceedings.

In addition, arbitration is also possible for domestic disputes, ie, where none of the parties has its seat abroad.

The Swiss legal system promotes ADR. Specifically, the conciliation proceedings before the cantonal conciliation authorities are mandatory proceedings, subject to certain statutory exemptions (eg, where the commercial courts have jurisdiction). If no conciliation proceedings have been completed and a plaintiff directly files a claim in court, the court shall not consider the claim.

Mediation and arbitration, on the other hand, are voluntary forms of ADR and are conducted out-of-court. However, the parties are free to agree on mediation as mandatory ADR prior to court or arbitration proceedings.

There are a number of institutions offering and promoting ADR. First of all, there are numerous local conciliation authorities which conduct the mandatory conciliation proceedings. In addition, there are several institutions offering mediation rules and mediation services, eg, the Swiss Chambers' Arbitration Institution. In addition, numerous lawyers undergo special training as mediators and offer mediation services independently within the scope of their regular activities.

International arbitrations, ie, proceedings where at least one party has its seat outside of Switzerland, are governed by Chapter 12 of the Private International Law Act (PILA). Domestic arbitrations are governed by the Civil Procedure Code (CPC). Under both set of rules, the parties have broad autonomy to agree on the conduct of the arbitration, with the exception of certain minimum standards that the arbitral tribunal must ensure, namely equal treatment of the parties and the right of the parties to be heard in adversarial proceedings.

Arbitral awards rendered in Switzerland are recognised and enforced like domestic judgments.

For international arbitrations, any dispute of financial interest may be the subject of an arbitration. On the other hand, for domestic arbitrations, only claims over which the parties may freely dispose may be the object of an arbitration agreement.

Challenges of arbitral awards are only allowed based on very limited grounds, mainly of procedural nature, eg, lack of jurisdiction and violation of the procedural guarantees. There is no substantive review of the award, except for violation of public policy. Arbitral awards are rarely set aside in Switzerland. The sole judicial authority to set aside arbitral awards is the Federal Supreme Court.

Arbitral awards rendered in Switzerland are recognised and enforced like domestic judgments. The recognition and enforcement of foreign arbitral awards is governed by the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958.

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Law and Practice in Switzerland

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Homburger helps businesses and entrepreneurs master their greatest challenges, combining the know-how, drive and passion of the firm's specialists to support clients in reaching their goals. Whether it's advising clients on transactions, representing them in proceedings or helping with regulatory matters, the firm is dedicated to delivering exceptional solutions, no matter the complexity and time constraints. Collaborating smartly and efficiently within the firm, with clients and with other parties involved is crucial to the firm's performance. Homburger's litigation team is one of the largest and most effective in Switzerland. The team supports clients in the avoidance of disputes and represents enterprises, entrepreneurs, foundations and private persons in civil and commercial matters before all Swiss courts, and in administrative proceedings before Swiss authorities. Furthermore, Homburger supports clients in their litigation in other countries and co-ordinate parallel contentious matters in various jurisdictions.