Case-law

In a ruling 6B_45/2021 of April 27, 2022, the Swiss Federal Supreme Court confirms the conviction (in absentia) of a former bank employee - whom we shall refer to as Albert - for economic intelligence services (Art. 273 StGB) and money laundering (Art. 305bis StGB). In short, Albert was accused of having, between 2005 and 2012, collected and stolen customer data before selling it to the German authorities in summer 2012. Then, in August 2012, he opened an account in[...]

What information can a client receive from her bank in a dispute over a margin call? The Swiss Federal Supreme Court recently addressed this question in ruling 4A_599/2019 (commented in cdbf.ch/1190/). It is now confronted with this question again in ruling 4A_436/2020, which concerns the same set of facts. In October 2012, a Lebanese company opened an account with a Swiss bank. The client invested in "in-house" OTC options and structured products designed and issued by the bank, which was[...]

The Swiss Federal Supreme Court recently examined the scope of a bank's obligation to render an account to its client, not in relation to retrocessions received by the bank (a question which has been the subject of abundant case law, cf. cdbf.ch/1145), but in relation to retrocessions allegedly paid by the bank to a third party (TF 4A_436/2020 of April 28, 2022). This ruling was issued in the context of the contractual relationship between a Lebanese company (client) and a[...]

In a ruling 2C_380/2021 of February 28, 2022, intended for publication, the Swiss Federal Supreme Court examines a case involving the transfer of several real estate assets from an occupational pension scheme to an investment foundation whose investors are exclusively pension funds. A pension fund owns a large number of properties, mainly in the canton of Zurich. It wishes to transfer its real estate holdings to an investment foundation - also dedicated to occupational benefits - in exchange for participation[...]

In a ruling 4A_66/2022 of March 25 concerning a standby letter of credit, the Swiss Federal Supreme Court ruled that the existence of criminal proceedings potentially directed against the standby beneficiary justified a stay of the civil proceedings aimed at determining the merits of the standby claim. A bank was mandated to issue several standby letters of credit ("LCS") in favor of a long-standing customer, the purpose being to guarantee the beneficiary payment by C ("C") of the agreed price[...]

In an execution-only banking relationship, does the bank necessarily have to make good the loss suffered by the customer when it acquires securities without prior authorization? Case 4A_469/2020 answers in the negative. In April 2005, a customer opened an account with a bank in Lugano, and to this end signed the general terms and conditions, as well as a residual bank clause. Following the opening of the banking relationship, the customer invested in equity funds through an advisor at another[...]

In a ruling 2C_624/2021 of March 28, 2022, intended for publication, the Swiss Federal Supreme Court examines the question of the levying of transfer duties when a contractual investment fund changes management. Specifically, the case concerns a real estate fund reserved for qualified investors. In 2019, a contract provides for the "gratuitous" transfer of management from Ancienne SA to Nouvelle SA. It also stipulates that the new management takes over from the former management as debtor of the fund's mortgage[...]

Switzerland's four largest gold importers can rest assured: tax secrecy should (again) prevail over transparency, according to Federal Administrative Court ruling A-741/2019 of March 16, 2022. At the root of this case is the Society for Threatened Peoples. In 2018, this association submitted a request to the Federal Office of Customs and Border Protection (FOCB) based on the Transparency Act (LTrans). It wished to obtain complete statistics on gold imports by the four largest importers, including quantities, broken down by[...]

How should a bank react to contradictory instructions issued within hours of each other by the joint account holders? In whose hands must it act? In ruling 4A_630/2020, the Swiss Federal Supreme Court clarifies the rights and obligations of a bank receiving contradictory transfer orders relating to a joint account. A father and son opened a joint account with a bank, on which each had individual signing authority. The assets in this account amount to around EUR 20,000,000. On the[...]

India requests information from Switzerland about Anne. Anne is said to hold an account with bank ‘B.’ through trust structures (Truststrukturen). After a procedural mishap, the FTA agrees to pass on to its counterpart the information that the person concerned is a ‘beneficiary of the overlying trust of the company holding the account with the number xxx […]’. Anne challenges this decision before the Federal Administrative Court, which partially upholds her appeal. Still dissatisfied, she appealed to the Federal Court[...]

In rulings 4A 365/2021, 4A 366/2021, 4A_367/2021 and 4A 368/2021, the Federal Court looks at the contractual relationship between an asset management company and external managers: in this case, it will be categorised as an employment contract, despite the employer's attempt to attribute a different assessment to it from the perspective of the delegation of tasks. Four managers approached an asset management company with a view to a collaboration agreement for the creation and management of an investment fund. The[...]

Following the US sanctions against Russia for its annexation of Crimea, the Federal Supreme Court, in its ruling 4A_84/2021, examined the scope of the grounds justifying a refusal of the payment services falling under the universal service of the Post Office. In April 2018, Viktor Vekselberg, a Russian citizen and Swiss resident, was placed on the list of Specially Designated National and Blocked Persons (SDN) by the US Office of Foreign Assets Control (OFAC) as part of the sanctions against[...]

Can a bank be guilty of unfair management in the context of the realisation of assets following a margin call? Do the transaction confirmations provided by the bank constitute evidence with increased probative value under Art. 251 PC? In the 6B_1381/2021 ruling, the Federal Court answers both questions in the negative. A client entered into an execution only options and futures trading contract with his bank in 2015. This contract obliged the client to meet the margin requirements that the[...]

Lawyers only focus on the verb. The received idea is almost correct, but therefore false: they also become infatuated with deeds. Art. 18 para. 1 CO, central to our legal system, illustrates this when it states that the real and common intention of the parties takes precedence over their inaccurate expressions. The bias in favour of the primacy of will is, moreover, nothing specific to Switzerland. Inherited from Roman law, it is consequently one ‘of the dominant features of the[...]

In the 1B_537/2021 ruling, the Federal Court examines the question of whether, in the context of a transfer of assets within the meaning of art. 69 et seq. LFus, the acquiring company acquires the legal standing of the transferor's plaintiff. On 15 December 2017, a foundation filed a criminal complaint against its former secretary general for acts committed in the management of the foundation from 2012 to 2017. The public prosecutor's office then opened an investigation for unfair management (art.[...]

The sealing route is not open to the bank, some of whose employees are being prosecuted for violating the obligation to communicate (art. 9 and 37 LBA). The Federal Supreme Court (FSC) ruled in this way in two (surprisingly) similar cases, which were the subject of three rulings, the first dated 14 December 2021, the second two dated 20 December 2021 (1B_49/2021, 1B_461/2021 and 1B_243/2021). For ease of reading, the following lines focus on the first decision. On 7 November[...]

In the judgement 4A_36/2021 intended for publication, the Federal Supreme Court considered the question of the creditor's standing to bring an action for liability (art. 754 CO). It considered, incidentally, the effects of the assignment of claims and the consequences thereof for the original holder of the claim. An open-ended investment company, based in the Cayman Islands, holds several sub-funds. These sub-funds are autonomous, but do not have legal personality. One of these sub-funds participates in real estate projects in[...]

What procedural protection can be granted to the minutes of the board of directors (and other internal information) of a bank? In ATF 148 III 84 (4A_58/2021), the Federal Tribunal specifies the scope of the measures that a civil court may order in order to protect the interests worthy of protection of a party. A Guernsey company is suing a Swiss bank for damages before the Zurich Commercial Court. In its response, the bank asks the court to prohibit the[...]

Should the use of an algorithmic trading programme be considered a substitution within the meaning of Art. 398 para. 3 CO ? Does the agent violate his duty to inform if he does not regularly inform his principal about the progress of market making? The Federal Supreme Court answers both questions in the negative in its judgement 4A_305/2021. A company incorporated under Israeli law enters into a mandate agreement with a Swiss bank. Under this agreement, the bank undertakes to[...]

India sends a request for administrative assistance to Switzerland. The request apparently concerns Alain, who has lost his father (the late Denis). This circumstance is going to be a source of confusion: is India interested in Alain or in the inheritance of the late Denis? Before delving into this question, let us note that three bank accounts have been identified as relevant in Switzerland. Alain and the late Denis were joint holders of account number 1. The company ‘C.’ is[...]