I’m thrilled to publish this excellent guest post submitted by Yves Klein of Monfrini Crettol & Partners in Geneva, Switzerland.
I recently read Santiago Cueto’s entry on this blog titled How to File a Lawsuit Against a Foreign Government. The Basics, on which I commented on LinkedIn. Santiago kindly offered me to write this contribution on the Swiss perspective to this issue.
Like the United States of America, Switzerland respects the sovereignty of foreign States, of which immunity is a part under public international law.
Contrary to the United States, though, Switzerland does not have a specific statute governing this issue, and Swiss courts apply both customary international law and internal law. In 1982, Switzerland ratified the 1972 European Convention on State Immunity and in 2010, it also ratified the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which is not yet in force.
In accordance with the case law of the Federal Court, Switzerland’s highest court, under certain conditions a foreign State can be summoned before a Swiss court. A distinction must be draw, depending on whether the foreign State:
(1) acted in the exercise of sovereign authority (sovereign act or act of State, “acta iure imperii“); or
(2) acted as a subject of private law equal to a private person (commercial transactions, “acta iure gestionis“).
Only in the first case can the foreign State claim jurisdictional immunity. In the second case, by contrast, the foreign State can be summoned before a Swiss court, but only on the condition that there exists a sufficient nexus between the claim and Swiss territory. This additional condition does not derive from international public law but from precedents developed by Swiss courts, which implied justification is the safeguard of the international relations of Switzerland, as proceedings against a foreign State inevitably create diplomatic tensions.
Swiss courts can also impose measures of constraint on a foreign State’s assets. What holds for jurisdictional immunity also holds in principle for immunity from measures of constraint: such measures may not be taken if the underlying claim was a sovereign act or had no connection with Switzerland. In addition, measures of constraint may not be taken against assets and property intended for the performance of public functions.
The particularity of Swiss law in respect of immunity of foreign States and their assets from jurisdiction and execution concerns thus mainly the requirement of a sufficient nexus of the underlying claim with Switzerland (Binnenbeziehung in German).
Such connection has been deemed to exist when: the agreement or its addendums were concluded in Switzerland; the claim was born in Switzerland; the claim or payment ought to have been executed in Switzerland; the claimant resided in Switzerland when the claim was born; Swiss courts were designated by the parties. It was denied when: a foreign resident assigned its claim to a Swiss resident; the place of execution in Switzerland was chosen by the claimant in his discretion; the place of arbitration was in Switzerland.
It should finally be mentioned that Swiss courts give effect to a contractual renunciation to immunity from jurisdiction or execution.