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Swiss Contract Law For decades, Swiss law has been a favorite choice of law in countless international contracts, regardless of the origin of the parties and the seat of arbitration

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Swiss law is codified, easy to understand, and available in several languages, including in an English translation on the official Swiss Government website. Swiss contract law provides parties with maximum autonomy and control over their contract, more than almost any other jurisdiction. It is also not subject to EU law or too complicated rules about general terms and conditions. At the same time, Swiss contract law is based on the principle of good faith, thus protecting the parties’ reasonable and fair expectations against sharp dealing. Its accessibility and predictability makes Swiss law a cost-efficient and natural choice of parties in search of a neutral and pragmatic law.

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Assignment of Arbitration Agreements

23/01/2023 by Aceris Law LLC

The assignment of a contract containing an arbitration agreement to a third party raises several questions. [1] The first question is whether the arbitration agreement is automatically transferred. [2] If so, what is the legal basis for such a transfer ? [3] Other issues concern the validity of the assignment of the main contract itself and whether evidence of the intent of the various parties is required to validate the assignment of the arbitration agreement. [4]

In this post, we will explore some of the issues that commonly arise in the contractual assignment of arbitration agreements.

Assignment arbitration agreement

The Applicable Law to the Question of the Assignment of Arbitration Agreements

The assignment of an arbitration agreement begs the question of the applicable law to its assignment. Such a determination may be made by the pertinent State court or the arbitral tribunal. Depending on whether the case is brought before a State judge or arbitrators, the conflict of law analysis may vary. [5] The most typical laws considered for the issue of the assignment of arbitration agreements are the following: [6]

  • the law of the court where the proceeding is brought (i.e., the lex fori );
  • the law of the seat of the arbitration (i.e., the lex loci arbitri );
  • the law governing the underlying contract (i.e., the lex causae ); and
  • the law applicable to the arbitration agreement (i.e., the lex compromissi ).

Unlike State courts, arbitrators do not have a lex fori , as their jurisdiction is based on the parties’ consent or, to some extent, on the lex arbitri . [7]

Some authors suggest that State courts will determine the law applicable to the assignment by way of their own conflict of law rules. [8] For instance, in Switzerland, the question of whether the parties are bound by the assignment is determined by the law governing the arbitration agreement under the Swiss conflict of laws rules. [9]

On the other hand, the lex fori  may encourage forum shopping in a search to find a more favourable legal framework for the assignment. [10] In addition, the judicial forum will not necessarily have a real connection with a dispute that would justify the application of its own law. [11]

Lex Loci Arbitri

The lex arbitri is understood as the law of the seat of arbitration. It should not be confused with the law establishing the framework of the arbitral proceedings, known as the lex arbitri. [12]

The New York Convention and the UNCITRAL Model Law give the lex loci arbitri a prominent role. Therefore, it is sometimes argued that it shall govern questions pertaining to the arbitration, including the question of the assignment of the arbitration agreement. [13]

Nevertheless, the lex loci arbitri does not govern the arbitration agreement itself. It is also difficult to understand the connection between the seat of the arbitration and the issue of assignment. Moreover, parties usually seek a neutral seat for their arbitration, considering, among other factors, the proximity, convenience, and pro-arbitration reputation of one jurisdiction. It is difficult to see how these factors would be relevant to determine the law governing the assignment of the arbitration agreement. [14] Thus, the lex loci arbitri may not be seen as the deciding law governing the assignment of an arbitration agreement.

It may be argued that issues concerning the assignment of arbitration agreements should be regulated by the law governing the underlying contract or the lex causae .

Indeed, the use of the lex causae ensures that questions arising out of the assignment of the arbitration agreement and the underlying contract will be treated by the same legal framework. Additionally, only this rule ensures the parties’ typical expectation that the arbitration agreement will be transmitted in the same conditions as the underlying contract. [15]

This also avoids the difficulties associated with dépeçage , which can be defined as the use of different legislations to address various issues of the same contract. [16]

Lex Compromissi

A traditional rule is to subject the assignment to the law governing the arbitration agreement itself. Today, it is widely accepted that the arbitration agreement is governed by its own law, which may be chosen by the parties or defined by rules of conflict of laws. [17]

The advantages of applying the lex compromissi to the question of the assignment are: [18]

  • it is in line with other general approaches in private international law; and
  • it provides a clear answer to the question of which law applies to the assignment of arbitration agreements.

The applicability of the lex compromissi , on the other hand, may lead to a situation where the arbitration agreement and the underlying contract are governed by different laws giving rise to the problems associated with dépeçage. [19]

Substantive Law Governing the Assignment of the Arbitration Agreement

French courts have created a substantive rule, or a “ règle matérielle ”, whereby the arbitration agreement binds the assignee and the obligor based on the parties’ intent. Arbitral tribunals applying this rule need not rely on any national law, as the assignment will be transmitted based on the consent of the parties to the assignment. [20] Consequently, the validity of the assignment cannot be challenged on the ground that the assignment of the main contract is invalid.

In practice, French courts or arbitral tribunals will ascertain whether the assignor and assignee have consented to the transfer of the arbitration clause. [21] Under this approach, the validity of the assignment of the arbitration agreement will be analysed apart from the underlying contract. This may lead to a peculiar situation where the assignee becomes bound by the arbitration agreement but does not acquire rights or obligations under the underlying contract if the assignment of the main contract is deemed invalid. [22]

The Principle of Automatic Transfer of Arbitration Agreements

Most international instruments, such as the New York Convention and the UNCITRAL Model Law, are silent to the question of assignment. [23] However, many scholars, courts, and arbitral tribunals advocate for the principle whereby the assignee of the underlying contract becomes bound by the arbitration agreement once the assignment takes place. [24]

This ensures predictability and fulfils the expectation of the original obligor, who expects that disputes will be resolved by arbitration. In this regard, many scholars support the view that the fact that the assignee may be unaware of the existence of the arbitration agreement should be of no relevance in the context of an assignment. [25]

Nevertheless, some courts have departed from the principle of automatic transfer. In Bulgaria, for instance, the Supreme Court of Cassation set aside an arbitral award on the ground that the sole arbitrator lacked jurisdiction to decide a dispute arising out of a rental agreement where the debtor did not expressly agree to the assignment of the arbitration agreement. [26]

In Switzerland, the Supreme Court found that a sole arbitrator correctly declared himself incompetent over a dispute arising from an assigned contract. Interestingly, this contract expressly prohibited the assignment of the agreement without the other party’s written consent. [27] Thus, whereas under Swiss law, an arbitration clause is transferred to the assignee without the need for the consent of the debtor, in this specific case the arbitration agreement suggested that the arbitration clause was intended to be effective between the original parties only. [28]

The Principle of Separability in the Context of an Assignment of an Arbitration Agreement

Separability is a theory in which the arbitration clause is an independent agreement from the underlying contract itself. In the context of an assignment, this would mean the transfer of an arbitration agreement would not operate automatically in case of an assignment of the main contract.

Many authors suggest that the separability principle is not absolute, however. In this respect, it has been accepted that the arbitration clause is separated from the underlying contract to the extent that it helps to ensure and promote the effectiveness of arbitration. [29] In other words, the arbitration agreement does not need to be treated separately from the main contract for the purpose of a contractual assignment.

[1]             J. Waincymer, Chapter 7: “Part II: The Process of an Arbitration: Complex Arbitration” in Procedure and Evidence in International Arbitration (2015), pp. 517-518.

[2]             Garnuszek, “The Law Applicable to the Contractual Assignment of an Arbitration Agreement” in Michael O’Reilly (ed), The International Journal of Arbitration, Mediation and Dispute Management , 82(4), p. 349.

[3]             Ibid.

[4]             Waincymer, supra fn. 1, pp. 517-518.

[5]             See , Garnuszek, supra fn. 2, p. 350.

[6]             Id. , 349.

[7]             Id. , 350.

[8]             I. Chuprunov, “Chapter I: The Arbitration Agreement and Arbitrability: Effects of Contractual Assignment on an Arbitration Clause – Substantive and Private International Law Perspectives” in C. Klausegger, P. Klein, et al. (eds), Austrian Yearbook on International Arbitration 2012 (2012), p. 54.

[9]             Garnuszek, supra fn. 2, p. 352.

[10]            Chuprunov, supra fn. 8, p. 54.

[11]            Ibid.

[12]            Garnuszek, supra fn. 2, p. 354.

[13]            Chuprunov, supra fn. 8, p. 56.

[14]            Id. , p. 56.

[15]             Id ., p. 59.

[16]             Ibid .

[17]             Id. , p. 57.

[18]             Ibid .

[19]             Id. , p. 58.

[20]            Garnuszek, supra fn. 2, p. 351.

[21]            Chuprunov, supra fn. 8, p. 52.

[22]             Id. , pp. 52-53.

[23]            Id. , p. 39.

[24]            Id ., p. 31 .

[25]            Id. , p. 61.

[26]           V. Hristova, Bulgaria: Assignment of an Arbitration Clause – Is Debtor’s Consent Required? (Kluwer Arbitration Blog, 17 August 2019).

[27]            J. Werner, Jurisdiction of Arbitrators in Case of Assignment of an Arbitration Clause: On a recent decision by the Swiss Supreme Court J. of Intl. Arb. 8(2), pp. 14-15.

[28]            Id. , pp. 16-17.

[29]            Chuprunov, supra fn. 8, pp. 40-41.

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Lending & Secured Finance Laws and Regulations Switzerland 2023-2024

ICLG - Lending & Secured Finance Laws and Regulations - Switzerland Chapter covers common issues in lending and secured finance laws and regulations – including guarantees, collateral security, financial assistance, syndicated lending and LIBOR replacement.

Chapter Content Free Access

1. overview, 2. guarantees, 3. collateral security, 4. financial assistance, 5. withholding, stamp and other taxes; notarial and other costs, 6. judicial enforcement, 7. bankruptcy proceedings, 8. jurisdiction and waiver of immunity, 9. licensing, 10. libor replacement, 11. other matters.

1.1        What are the main trends/significant developments in the lending markets in your jurisdiction?

Despite the economic shock of the COVID-19 pandemic, the recovery of the Swiss economy has been quite swift with GDP growth in the low to mid-single digits for 2021, which is expected to continue in 2022.  Unlike in 2020, at the beginning of the pandemic, no new state-backed credit support programmes in relation to the COVID-19 pandemic were introduced in 2021.  The M&A and acquisition financing markets remained active but the deals were (with a few exceptions) less sizeable than in previous years.

In 2021, the change from LIBOR to other interest rates kept the market participants busy.  Further, we have also observed the following trends:

  • a growing demand for ESG-related financing, including by borrowers;
  • competition on the lending market between traditional bank and syndicated lending, and non-bank lenders showing an appetite for higher leverage; and
  • a growing appetite of private banking clients for leveraged transactions (increasing the demand by private banks for credit risk mitigation instruments (netting arrangements, sub-participation schemes, innovative risk-shifting methods)).

1.2        What are some significant lending transactions that have taken place in your jurisdiction in recent years?

Many transactions and, in particular, deal values remain confidential.  Transactions that made headlines in 2020/2021 were the CHF 1.5 billion COVID-19-related and state-backed credit package for Switzerland’s national aviation group “Swiss”, and Roche’s CHF 9.814 billion (USD 10 billion) bridge facility for the repurchase of the participation of Novartis in Roche.

2.1        Can a company guarantee borrowings of one or more other members of its corporate group (see below for questions relating to fraudulent transfer/financial assistance)?

A company can guarantee borrowings of one or more other members of its corporate group.  In case such other member of its corporate group is a direct or indirect shareholder of the guarantor or a subsidiary of such shareholder (i.e. a sister company of the security provider), the financial assistance restrictions described under question 4.1 apply.

2.2        Are there enforceability or other concerns (such as director liability) if only a disproportionately small (or no) benefit to the guaranteeing/securing company can be shown?

If the guarantee/security is not at arm’s length, the financial assistance restrictions described under question 4.1 apply unless the guarantee/security is granted to a fully owned (direct or indirect) subsidiary of the guarantor/security provider.  If such restrictions are not incorporated into the guarantee/security agreement, directors are exposed to liability risks.  The law is not settled and there is only a limited set of precedents in relation to the enforceability of such a guarantee/security.

2.3        Is lack of corporate power an issue?

Yes, the law is not settled and there is only a limited set of precedents in this regard (see questions 2.2 and 4.1).

2.4        Are any governmental or other consents or filings, or other formalities (such as shareholder approval), required?

No governmental or other consents or filings, or other formalities, are required except that, in practice, shareholder approval is sought in case of guarantees that require financial assistance restrictions because they are granted for the benefit of other members of the guarantor’s corporate group that are either (direct or indirect) shareholders of the guarantor or subsidiaries of such shareholder.

2.5        Are net worth, solvency or similar limitations imposed on the amount of a guarantee?

Except for the financial assistance restrictions described under question 4.1, no such limitations are imposed on the amount of a guarantee.  However, the directors of a Swiss company risk liability if a company prefers some creditors over others in case of a near insolvency or bankruptcy situation.  This has the factual consequence that a company will not pay a guarantee if its directors determine that insolvency/bankruptcy cannot be avoided.  In such scenario, guarantee claims will have to be filed with the bankruptcy or similar administration.

2.6        Are there any exchange control or similar obstacles to enforcement of a guarantee?

Currently, there are no exchange control or similar obstacles in Switzerland.

3.1        What types of collateral are available to secure lending obligations?

Typical collateral to secure lending obligations are pledges or transfer of ownership (for security purposes) of certain assets such as shares, cash, intellectual property or real estate, as well as security assignments of certain receivables.

3.2        Is it possible to give asset security by means of a general security agreement or is an agreement required in relation to each type of asset? Briefly, what is the procedure?

Certain types of security interests (e.g. pledges or security transfers) may only apply to a specific class of asset and, therefore, it is rarely possible under Swiss law to cover all the types of assets that an entity may hold under one single security agreement.  In theory, this would be possible if a company only held assets over which a single security interest can be taken.  However, even in this case the general security agreement must cover different perfection requirements that may apply to various types of assets, which would defeat the purpose of facilitating the procedure of taking security over multiple assets in a single agreement.  Consequently, it is standard practice in Switzerland to use separate agreements for each type of asset.

3.3        Can collateral security be taken over real property (land), plant, machinery and equipment? Briefly, what is the procedure?

Real property – land

Collateral over land is possible under Swiss law.  For the purpose of securing lending obligations, the common forms used to create such collateral are either a security transfer of mortgage notes ( Schuldbriefe ) or a land charge ( Grundpfandverschreibung ).

Security transfer of mortgage notes

Mortgage notes are financial instruments representing a personal claim against the debtor that is secured by a pledge on real property.  Mortgage notes exist in the form of bearer or registered certificates or in paperless forms.

Instead of a security transfer, it is also possible to pledge mortgage notes.  However, practitioners generally prefer a security transfer of legal title over the creation of a pledge.  The advantage of the former is the transfer of legal title of the mortgage notes will not become part of the debtor’s bankruptcy estate.

In order to create a real estate security based on mortgage notes, such notes – if not already issued – must first be created, which requires a notarial deed.  The parties then enter into a written security transfer or pledge agreement and transfer the legal title of the mortgage notes, either by transfer of possession in the case of paper mortgage notes, or registration of the transfer in the land register in the case of paperless (registered) notes.

Land charge

A land charge is a mortgage that is entered into the land register and secures any kind of claim, whether actual, future or contingent.  Other than in the case of mortgage notes, the secured claim is not entered into the land register and neither the land charge nor the secured claim is evidenced in the form of a negotiable instrument.  For certain reasons, the land charge is less commonly used than mortgage notes.  To grant security in the form of a land charge, the parties must enter into an agreement regarding the creation of the land charge in the form of a notarial deed and file this deed with the land register.  Once the land register has registered the land charge, the security is created.

Real property – plant

As a matter of principle under Swiss property law, structures become part of the land on which they are built.  An exemption from this principle is an independent building right with a duration of at least 30 years, which can be established on land for the purpose of building a structure such as a plant.  In this case, Swiss law recognises the building right as a real property in its own right.  In either case, a mortgage security over a land or building right where the plant has or will be built is possible, and follows the same principles and procedures as laid out above (see Real property – land).

Machinery and equipment

It is possible to grant a pledge over movable assets such as machinery and equipment.  However, since Swiss law does not recognise the concept of a floating charge, taking security over machinery or equipment is impractical and rarely pursued in a lending transaction.

A security over machinery or equipment can be created by a pledge or a security transfer of legal title in the machinery or equipment.  These security interests entitle the pledgee or transferee to liquidate the machinery or equipment in case of enforcement.  Unless specific rules apply in relation to certain types of movable assets, perfection of a pledge over movable assets requires the transfer of physical possession of such asset.  The security is only established once the pledgor gives up its possession over the relevant assets and is no longer in the position to exercise independent possession rights.  This makes it impossible to grant security over machinery and equipment while allowing the pledgor to make use of such assets.

An exception applies to certain types of movable assets, which are subject to specific laws.  Most importantly, security over aircraft, ships and railroads is perfected by the entry of the security in the respective public register (such registration replaces the requirement to transfer possession).

3.4        Can collateral security be taken over receivables? Briefly, what is the procedure? Are debtors required to be notified of the security?

Security over receivables can generally be taken in the form of a pledge or assignment.  However, in either case, the prerequisite for creating such security is the assignability of the receivables.  This means that the assignability of the receivables must not be prohibited by applicable laws or excluded by contract or by the personal nature of the receivable (e.g. family law claims; however, according to Swiss case law there are also receivables where the personal nature is less evident).  If the assignability is restricted in an underlying contract, it is common to request the assignor to seek a waiver of such restriction from the debtor.

The steps to perfect a pledge or assignment of receivables are as follows:

  • The pledge or assignment of receivables requires a valid security agreement in written form, and in the case of assignment, a written declaration of assignment by the assignor (which in practice is part of the security agreement).
  • Existing written acknowledgments of debts representing the pledged or assigned claim must be handed over to the pledgee or assignee.

The notification of debtors is generally not a requirement to perfect the pledge or assignment except where a waiver of a restriction of the assignability in an underlying contract must be obtained or where a second-ranking pledge over receivables is created.  However, provided a notification to a debtor has not been made, a debtor may in good faith pay its debt to the assignor without becoming liable to the assignee.  Therefore, it is market standard in Swiss security assignment agreements to include an obligation to notify debtors at the time of signing of the assignment agreement or as soon as possible thereafter.  Debtors of trade receivables, however, are generally only notified after the occurrence of an event of default in order not to prejudice the legitimate business interests of the security provider.

Even though the notification of the debtor is in most cases not a requirement to perfect a security over receivables, a pledgee or assignee must be entitled to notify debtors at any time, i.e. even before an enforcement event.  If such right is not granted to the assignee, the pledge or assignment for security purposes may be qualified as a conditional security interest that only arises once the secured party has notified the debtor.

3.5        Can collateral security be taken over cash deposited in bank accounts? Briefly, what is the procedure?

Security over cash accounts can be taken in the form of a pledge or a security assignment.  Cash deposits held in bank accounts are treated as claims of the beneficiary against the bank.  Therefore, the creation of security over cash deposits is based on the same principles and procedures that apply to security over claims and receivables.  In case of a pledge over a cash account, the bank should always be notified.  The Swiss bank’s general business terms usually provide for a first-ranking security interest over the bank account.  A third party therefore obtains a second-ranking security interest over a Swiss bank account only, unless the bank waives its priority rights.  To create and perfect such second-ranking security interest, the bank as first-ranking pledgee must be given notice.

3.6        Can collateral security be taken over shares in companies incorporated in your jurisdiction? Are the shares in certificated form? Can such security validly be granted under a New York or English law-governed document? Briefly, what is the procedure?

It is possible to create a security interest over shares of a Swiss company, the most common form to take such security being a pledge (even though a security transfer of title or security assignment may also be possible in certain cases).  Swiss law does not mandatorily require a Swiss company to issue share certificates.  Thus, shares of Swiss stock corporations may or may not be in certificated form, which may affect the procedure to perfect a share pledge:

  • Irrespective of whether share certificates have been issued, creation of a valid security interest over shares requires a valid written security agreement.
  • If shares are certificated, the share pledge must be perfected by transferring the original share certificates to the pledgor.  In case of registered shares ( Namenaktien ), which have become the common form of shares in Swiss stock corporations, the share certificates must be endorsed in blank.
  • Uncertificated shares must be pledged, transferred or assigned in writing.

A security over shares over a Swiss company governed by New York or English law is possible but not recommended.  Such security would give rise to conflict of law issues and may not be valid vis-à-vis a third party, which may impede an effective enforcement in Switzerland.

The Federal Intermediated Security Act (“ FISA ”) sets out rules on how intermediated securities are granted.  Under the FISA, a security interest over intermediated security can be created by either transferring or crediting such securities to the securities account of the secured party.  Alternatively, the security over intermediated security can be granted by an agreement between the security provider and the intermediary (a so-called control agreement) setting forth an irrevocable requirement for the intermediary to comply with instructions from the secured party only.

3.7        Can security be taken over inventory? Briefly, what is the procedure?

Security over inventory can be taken in the same manner as in the case for security over movable assets or machinery or equipment (please see question 3.3 above).  In the absence of a floating charge concept in Switzerland, a security over inventory is possible but impractical.

3.8        Can a company grant a security interest in order to secure its obligations (i) as a borrower under a credit facility, and (ii) as a guarantor of the obligations of other borrowers and/or guarantors of obligations under a credit facility (see below for questions relating to the giving of guarantees and financial assistance)?

A company can grant a security interest to secure its own obligations under a credit facility as well as obligations of a third party, such as another borrower or guarantor.  In case such third party is a direct or indirect shareholder of the security provider or a subsidiary of such shareholder (i.e. a sister company of the security provider), the financial assistance restrictions described under question 4.1 apply.

3.9        What are the notarisation, registration, stamp duty and other fees (whether related to property value or otherwise) in relation to security over different types of assets?

Most common forms of Swiss collateral, such as share or bank account pledges or security assignments, are not subject to notarisation or registration requirements.  Therefore, no notarisation or registration fees apply to these types of collateral.  If security is granted over real property, notaries’ fees, registration fees (for the land register) as well as cantonal and communal stamp duties may be payable depending on the location of the real estate and the transaction value.

3.10      Do the filing, notification or registration requirements in relation to security over different types of assets involve a significant amount of time or expense?

In the limited cases where a notification or registration is advisable, it is not time consuming and can be achieved within a couple of days.  In case of a mortgage over real property, however, the notarisation and entry into the land register may take longer.

3.11      Are any regulatory or similar consents required with respect to the creation of security?

Except for security granted over certain assets of regulated entities, there are generally no regulatory consents required with respect to the creation of security.

3.12      If the borrowings to be secured are under a revolving credit facility, are there any special priority or other concerns?

There are no special priority or other concerns due to the fact that borrowings under a revolving credit facility are secured.

3.13      Are there particular documentary or execution requirements (notarisation, execution under power of attorney, counterparts, deeds)?

In case of a mortgage, the issuance of mortgage notes or the entry or establishment of a land charge must be notarised.

4.1        Are there prohibitions or restrictions on the ability of a company to guarantee and/or give security to support borrowings incurred to finance or refinance the direct or indirect acquisition of: (a) shares of the company; (b) shares of any company that directly or indirectly owns shares in the company; or (c) shares in a sister subsidiary?

  • Shares of the company: In general, the provision of a guarantee or other security by a Swiss company for the benefit of a direct or indirect shareholder of the guarantor/security provider (“up-stream”) or a subsidiary of such shareholder (i.e. a sister company of the security provider, “cross-stream”), is subject to financial assistance restrictions.  The law is not settled in this regard and there is only a limited set of precedents in relation to this matter.  In practice, the company’s articles of association are amended to explicitly allow such guarantees/securities and the guarantor’s/security provider’s liability is limited contractually to its freely distributable reserves, i.e. to an amount that could also be distributed as a dividend to its shareholders.  Further, board and shareholders’ resolutions are sought in relation to the entry into such a guarantee/security arrangement. 
  • Shares of any company that directly or indirectly owns shares in the company: Please refer to the answer under (a).
  • Shares in a sister subsidiary: Please refer to the answer under (a).

Syndicated Lending/Agency/Trustee/Transfers

5.1        Will your jurisdiction recognise the role of an agent or trustee and allow the agent or trustee (rather than each lender acting separately) to enforce the loan documentation and collateral security and to apply the proceeds from the collateral to the claims of all the lenders?

To enforce lenders’ rights under loan documents, the concept of an agent is recognised in Switzerland.  The appointment of an agent is frequently used in syndicated facilities governed by foreign law where Swiss parties are involved.

It is not possible to set up trusts under Swiss law in the absence of a substantive trust law.  Foreign trusts, however, are recognised in Switzerland since the Swiss Private International Law Act (“ PILA ”) transposes certain provisions of the Hague Convention on the Law Applicable to Trusts and on their Recognition (“ Hague Trust Convention ”), which is applicable in Switzerland.  Subject to the conditions of PILA and the Hague Trust Convention, a decision by a foreign court on trust-related matters is recognised.

Whether a security agent or security trustee can enforce its rights in respect of a Swiss law-governed security interest depends on the nature of such security interest:

  • Swiss law pledges are subject to the principle of accessority ( Akzessorietätsprinzip ), which means that the creditor of the secured claims and the pledgee must be identical.  Consequently, the pledge cannot be granted to a third party as pledge holder.  The pledge can be granted to numerous creditors, i.e. to lenders as a group under a syndicated financing.  However, due to frequent changes of lenders and since involvement of all lenders in the procedure of perfecting or enforcing a pledge is not practical, it is possible that a lender as a secured party is represented by a third party acting as a security agent and as a direct representative in the name and on account of each lender.
  • Accessority does not apply to security assignments or security transfers.  For these types of collateral, the security agent or security trustee can hold the assigned claims or transferred rights in its own name and on account of itself and the other secured parties.

5.2        If an agent or trustee is not recognised in your jurisdiction, is an alternative mechanism available to achieve the effect referred to above, which would allow one party to enforce claims on behalf of all the lenders so that individual lenders do not need to enforce their security separately?

The concepts of agents and foreign trustees are recognised in Switzerland.

5.3        Assume a loan is made to a company organised under the laws of your jurisdiction and guaranteed by a guarantor organised under the laws of your jurisdiction. If such loan is transferred by Lender A to Lender B, are there any special requirements necessary to make the loan and guarantee enforceable by Lender B?

There are no special requirements.  The transfer is possible and can be effected by way of assignment (to which the guarantor usually gives consent in advance under the loan documents).

6.1        Are there any requirements to deduct or withhold tax from (a) interest payable on loans made to domestic or foreign lenders, or (b) the proceeds of a claim under a guarantee or the proceeds of enforcing security?

With regard to a deduction or withholding taxes on interest payments, interest paid on loans extended to a Swiss borrower are generally not subject to Swiss withholding tax.  However, withholding tax applies to interest payments on bonds (at a rate of 35%).  According to guidelines of the Swiss tax authorities, a loan is considered a bond if either the aggregate number of non-bank lenders (including sub-participations) exceeds 10 under financing arrangements with identical terms, or if the aggregate number of non-bank lenders of a Swiss borrower exceeds 20.  Against this background, transfer restrictions and other Swiss 10/20 non-bank rules-related language must be incorporated into the relevant loan document.

The restrictions may under certain circumstances also apply if a Swiss company does not act as borrower but solely as guarantor or security provider.  A guarantee or security for the benefit of a foreign borrowing subsidiary – i.e. a guarantee by a Swiss company of a downstream nature – may trigger Swiss interest withholding tax on bonds or debentures in respect of interest payments by the foreign borrowing subsidiary.  This may be the case if a Swiss guarantor uses the proceeds directly or indirectly in Switzerland and has more than 10 non-bank lenders in a facility with identical terms or more than 20 non-bank lenders under all its credit facilities in total.

The granting or taking of security between related parties can be seen at arm’s length if the security provider is paid an appropriate guarantee fee.  If an up- or cross-stream guarantee that is not granted on arm’s-length terms is enforced, the difference between the consideration granted by the affiliate to the Swiss security provider (if any) and an arm’s-length consideration may constitute a hidden dividend distribution on which Swiss withholding tax (currently 35%) is payable.  Further, in case such up- or cross-stream guarantee is enforced, any amount recovered may be considered a distribution and as such will also be subject to Swiss withholding tax.  While this is generally recoverable if the recipient or beneficiary is a Swiss resident entity, a non-resident may be entitled to a refund only if there is an applicable double taxation treaty.  If no double tax treaty applies, the dividend withholding tax may become the final burden for the recipient.

6.2        What tax incentives or other incentives are provided preferentially to foreign lenders? What taxes apply to foreign lenders with respect to their loans, mortgages or other security documents, either for the purposes of effectiveness or registration?

There are no particular tax incentives or other incentives provided preferentially to foreign lenders.

The Swiss Confederation and the cantons or communes levy a withholding (source) tax on interest paid to foreign lenders that benefit from mortgage security on Swiss real estate.  The combined rate of the tax is between 13% and 33%, depending on the canton and commune in which the real estate is located.  This interest withholding tax is reduced (to zero) under a number of double taxation treaties, including those with France, Germany, Luxembourg, the United Kingdom and the United States.

6.3        Will any income of a foreign lender become taxable in your jurisdiction solely because of a loan to, or guarantee and/or grant of, security from a company in your jurisdiction?

No income tax will apply to foreign lenders in these scenarios.

6.4        Will there be any other significant costs that would be incurred by foreign lenders in the grant of such loan/guarantee/security, such as notarial fees, etc.?

Please see question 3.9.

6.5        Are there any adverse consequences for a company that is a borrower (such as under thin capitalisation principles) if some or all of the lenders are organised under the laws of a jurisdiction other than your own? Please disregard withholding tax concerns for the purposes of this question.

There are no adverse consequences in addition to those addressed in question 6.1.

7.1        Will the courts in your jurisdiction recognise a governing law in a contract that is the law of another jurisdiction (a “foreign governing law”)? Will courts in your jurisdiction enforce a contract that has a foreign governing law?

The recognition of foreign governing law in contracts is subject to the PILA.  Subject to the below limitations, Swiss courts will generally recognise a foreign governing law in a contract, provided that the relevant foreign law provisions are not contrary to Swiss public policy and they can be established by the parties. 

The recognition of a choice of foreign law is limited to contractual matters.  For security documents, Swiss law distinguishes the agreement to create the security ( Verpflichtungsgeschäft/titre d’acquisition ) from the creation of the security interest ( Verfügungsgeschäft/acte de disposition ).  While the agreement can be governed by the law chosen by the parties, the law governing the creation of the security is not left to the parties’ discretion.

In the context of pledges over movable assets (limited rights in rem ), the acquisition or loss of such rights in rem is governed by the country where such assets are located at the time of the event giving rise to such acquisition or loss.  The parties can, however, subject the acquisition and loss of such rights to the law governing the agreement to create the security (art. 104(1) PILA).  Such choice of law cannot, however, be asserted against third parties, who can rely on the law of the location of the assets at the time of the acquisition or loss of such rights.

The acquisition or loss of rights in rem over real estate are subject to the law of the place where the property is located.  Choice of law is not permitted (art. 99 PILA).

The pledge of claims or securities (with the exception of intermediated securities) is governed by the law of the country of the habitual residence of the pledgee, and in case of the pledge of other rights, by the law applicable to such rights.  The parties can choose the applicable law to such pledge; such choice of law can, however, not be asserted against third parties (art. 105(1) PILA).  In addition, irrespective of the law applicable between the pledgor and the pledgee, such law cannot be enforced against the debtor of the claim who may thus still rely on the law applicable to the actual claim, security or right.

As for the assignment by way of security of claims and uncertificated securities, such assignments are subject to the law governing the claim or the law chosen by the parties.  The choice of law cannot be asserted against the debtor of the claim without the debtor’s prior consent (art. 145(1) PILA).

The transfer of intermediated securities is governed by the Hague Convention on Securities Held with an Intermediary, which determines that the applicable law chosen by the parties to the relevant account agreement also applies to the disposal or encumbrance of securities held in that account.  Such law can, however, only apply if the relevant intermediary has an office in the relevant jurisdiction at the time of the agreement.  If that is not the case, the applicable law is the law of the jurisdiction of such intermediary’s office.

7.2        Will the courts in your jurisdiction recognise and enforce a judgment given against a company in New York courts or English courts (a “foreign judgment”) without re-examination of the merits of the case?

The courts of Switzerland will recognise as valid and will enforce a final and conclusive civil law judgment given against a company rendered by New York courts or by English courts without re-examination of the merits of the case, subject to the conditions set forth in the PILA.  A foreign judgment will generally be recognised under the PILA provided that the following conditions are cumulatively met: (i) the foreign court had jurisdiction in accordance with the rules of the PILA; (ii) the foreign judgment does not violate the Swiss public order (for example, the general principle of fairness of proceedings); (iii) the foreign judgment is final and non-appealable; (iv) the dispute was not pending first in Switzerland or has not been already determined in a third jurisdiction (provided that the relevant judgment can be recognised under the PILA); and (v) the proceedings leading to the foreign judgment did not violate basic principles, such as, in particular, the defendant being properly served or accepting the foreign jurisdiction or the defendant being able to exercise its right to be heard.

7.3        Assuming a company is in payment default under a loan agreement or a guarantee agreement and has no legal defence to payment, approximately how long would it take for a foreign lender to (a) assuming the answer to question 7.1 is yes, file a suit against the company in a court in your jurisdiction, obtain a judgment, and enforce the judgment against the assets of the company, and (b) assuming the answer to question 7.2 is yes, enforce a foreign judgment in a court in your jurisdiction against the assets of the company?

Swiss law allows for the direct enforcement of payment claims if the creditor holds a written acknowledgment of debt or an executory title or is the beneficiary of a security interest on assets of the debtor.  In the absence of such a document or pledge, the creditor generally must file a suit by way of ordinary proceedings, on the merits of the claim.  If the action is determined in favour of the creditor, it may enforce the judgment by way of initiating ordinary debt enforcement proceedings.

The enforcement of pecuniary claims, whether arising directly from a contract or from a foreign judgment, is subject to the Swiss Act on Debt Enforcement and Bankruptcy (“ DEBA ”).  In such cases, the creditor will commence collection proceedings to seize the debtor’s assets in order to enforce its claim.  For this purpose, the creditor will file a request with the competent debt collection office, upon which the debt collection office will serve a summons for payment upon the debtor.  The debtor may raise an objection against such summons for payment, in which case the creditor will apply to the competent court to have the debtor’s objection lifted.  This first phase of debt enforcement may generally take a few weeks or months.  There are certain minor formal differences in case of proceedings aiming at the realisation of pledged assets.  Overall, however, the time for this first part remains the same. 

If the objection is set aside and the matter has not yet been determined on the merits of the claim, the creditor may file suit by ordinary proceedings. 

In relation to part (a) of the question, the length of the proceedings will depend on whether the creditor is in possession of a written recognition of a debt by the debtor or the guarantor (as defined in the DEBA).  A loan agreement or a guarantee duly signed by the debtor is generally considered a recognition of a debt, provided that the creditor can provide proof of disbursement.  In such cases, the creditor’s rights will be subject to summary proceedings, which may take a few months before obtaining a first instance decision.  If no recognition of debt is available, the creditor will be subject to standard proceedings, which may take about a year before the first instance renders a decision.  The rendered judgments are generally subject to appeal before higher cantonal instances and, as the case may be, the Swiss Federal Court, which may considerably extend such time estimates.

In relation to part (b) of the question, a foreign judgment first needs to be recognised (this can be confirmed by a court at the same time).  The enforcement proceedings are, in principle, summary proceedings, which are quicker than ordinary proceedings and may take a few months.  Again, the decisions are subject to the above-mentioned means of appeal.

If the debtor does not raise an objection, or, if it does, when the objection has been set aside, the debt enforcement proceedings continue by realisation of the pledged assets themselves or by bankruptcy (if the debtor may, under the DEBA, be subject to bankruptcy, which is generally the case for Swiss companies).  The length of the proceedings will in part depend on the type of pledged assets (movable/immovable) and can take from several months to more than a year.  In the latter case, the assets of the company are liquidated and distributed amongst the company’s creditors.  The length of the debt enforcement proceedings will strongly depend on the type of enforcement (seizure or bankruptcy) and, in case of the bankruptcy, on the size of the company.  Given the large number of possible scenarios, the time estimate can range from months to years.

7.4        With respect to enforcing collateral security, are there any significant restrictions that may impact the timing and value of enforcement, such as (a) a requirement for a public auction, or (b) regulatory consents?

There is no mandatory requirement for a public auction or regulatory consent in case of enforcement of collateral security.  The parties can agree that the enforcement is effected by private realisation ( private Verwertung ) or appropriation ( Selbsteintritt ) and collection of the pledged assets.  In addition, the parties can agree in advance that a discretionary sale ( Freihandverkauf ) is permitted.  Please note, however, that the private realisation or appropriation and discretionary sale of immovable properties is generally not possible because such a permission for private sale would require the notarisation of the security agreement (which is rarely, if ever, done due to the notarisation costs).  Private enforcement is in most cases faster and less formal.  However, the secured party is generally required in case of a realisation of the security to obtain the best price for the relevant assets, taking into account the circumstances at the time of the sale.  In addition, on bankruptcy, pledged assets will form part of the bankruptcy estate.  The private enforcement of those assets is not permitted and must occur under the DEBA.  As for intermediated securities which have been granted as a security, private enforcement does not have to be specifically agreed on between the parties but is only permitted if the value of the intermediated securities may be determined objectively.  In case of bankruptcy, the pledged assets form part of the bankrupt estate and as a result, the private enforcement of pledged assets is no longer permitted (this restriction does not apply to intermediated securities).

In case of no agreement relating to the enforcement of collateral, such enforcement will take place by public auction in accordance with the provisions of the DEBA.  According to the DEBA, if enforcement proceedings are brought against a claim secured by a pledge, the enforcement proceeding shall be continued by the realisation of the pledge ( beneficium excussionis realis ).  It is, however, possible for the parties to agree that the enforcement of the claims is pursued by the creditor according to regular debt enforcement proceedings without having first to enforce the creditor’s rights under any particular document and/or to institute proceedings for realisation of pledged assets first.

7.5        Do restrictions apply to foreign lenders in the event of (a) filing suit against a company in your jurisdiction, or (b) foreclosure on collateral security?

There are no restrictions applicable to foreign lenders in case of (a) or (b).  However, if the foreign lender intends to foreclose on a collateral consisting of Swiss residential property, this is subject to restriction under the Federal Law on the Acquisition of Real Estate by Persons Abroad.  Under that law, foreign lenders (or foreign-owned Swiss lenders) are subject to certain restrictions when they take security by way of mortgage over residential property in Switzerland.  The validity of the mortgage could be challenged if such restrictions are not complied with.  In addition, even if the mortgage has been validly granted, the law would not enable the foreign lender to acquire the property upon its forced sale unless it has received a specific authorisation from the competent authorities in the canton where the property is located.

7.6        Do the bankruptcy, reorganisation or similar laws in your jurisdiction provide for any kind of moratorium on enforcement of lender claims? If so, does the moratorium apply to the enforcement of collateral security?

The DEBA provides for moratorium procedures that can be applied for before a competent court by the debtor company or, in certain cases, by its creditors.  If there are prospects for a successful restructuring or a composition plan, the competent court can grant a moratorium ( Nachlassstundung/sursis condordataire ), which may result in a successful restructuring or in the confirmation of a composition agreement ( Nachlassvertrag/concordat ) that is binding on all creditors of unsecured claims.  The moratorium does not directly affect the securities granted by the debtor.  However, enforcement proceedings regarding securities (movable assets or claims and rights) cannot be started or continued during the period for which the moratorium is effective.  As for pledges on immovable assets, they cannot be realised during that time.  In addition, the composition agreement will not affect the security either so that it can be realised by the relevant creditor.

7.7        Will the courts in your jurisdiction recognise and enforce an arbitral award given against the company without re-examination of the merits?

Foreign final arbitral awards obtained in the competent arbitral courts are generally recognised in Switzerland without re-examination or re-ligation of the matters, provided that the conditions for the recognition and enforcement of arbitration awards set out in the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1985 (“ New York Convention ”) are fulfilled, i.e. there are no refusal grounds relating in particular to incapacity of a party, violation of due process, outside of scope disputes or wrong composition of the tribunal.

8.1        How does a bankruptcy proceeding in respect of a company affect the ability of a lender to enforce its rights as a secured party over the collateral security?

In Switzerland, the enforcement of claims and security interests is generally governed by the DEBA.  Insolvency proceedings are initiated by the debtor (mandatorily in case of over-indebtedness ( Überschuldung/surendettement ) according to art. 725 CO) or a creditor filing a petition for the opening of insolvency proceedings based on an application for commencement of enforcement proceedings ( Betreibungsbegehren/requisition de poursuite ) with the competent debt collection office.

Insolvency results in the acceleration of all claims against a debtor (secured or unsecured), except for those secured by a mortgage on the debtor’s real estate, and such claims become due.  After an insolvency has been declared by the competent insolvency court, assets that are subject to a pledge will fall within the debtor’s insolvency estate ( Konkursmasse/masse en faillite ) and will be realised by the insolvency administration.  Lenders must, in principle, register their claims and their rights on the pledged assets with the bankruptcy administrator.  The opening of bankruptcy proceedings prevents the bankrupt debtor from disposing of any of its assets.  In principle, interest ceases to accrue on the bankrupt’s debt; however, claims secured by a pledge enjoy a preferential treatment as interest which would have accrued until the collateral is realised will be honoured provided that the proceeds of the collateral suffice to cover such interest.  All creditors must participate in the insolvency proceedings and secured creditors are generally not entitled to enforce any security interest outside the insolvency proceedings (except for security over intermediated securities).  The realisation proceedings according to the DEBA are conducted by way of a public auction or, subject to certain conditions, a sale by mutual agreement.

Proceeds from enforcement are used to cover first enforcement costs, then the claims of creditors secured by pledge (in accordance with their rank) and, in case of any excess proceeds, unsecured creditors.

Contrary to pledged assets, assets of which the property has been legally transferred for security purposes before the opening of bankruptcy proceedings do not form part of the bankruptcy estate.  They can, therefore, be subject to private enforcement during the ongoing bankruptcy proceedings.  As for future claims and rights which have been assigned for security purposes or pledged but have come into existence only after the debtor has been adjudicated bankrupt, they will fall within the bankruptcy estate of the securing party.

8.2        Are there any preference periods, clawback rights or other preferential creditors’ rights (e.g., tax debts, employees’ claims) with respect to the security?

Unsecured claims rank in the following order: (i) prioritised claims under Swiss bankruptcy laws, such as claims of employees, claims of certain social insurances and pension funds and certain family law claims; (ii) any other unsecured claims; and (iii) any subordinated claims.

The creditors of a Swiss debtor may challenge the entering into of certain agreements and the performance of the obligations thereunder subject to the conditions set out in arts 285 et seqq . DEBA.  A transaction may be subject to challenge if (i) no or no adequate consideration has been given so that the transaction has been made at an undervalue in the year before the adjudication of bankruptcy (art. 286 DEBA), (ii) the debtor granted security for liabilities which it was not obliged to secure or discharged a debt before it becomes due or by an unusual means of payment in the year prior to adjudication of bankruptcy, at a time when the debtor was over-indebted and the secured party was or should have been aware of such over-indebtedness (art. 287 DEBA), or (iii) the granting of the security occurred in the five years before the adjudication of bankruptcy and the security provider had the intention to disfavour or favour certain of its creditors or should have reasonably foreseen such result and this intention was or must have been known to the receiving party (art. 288 DEBA).  As for cases (i) and (iii) for transactions with related parties, such as group companies, the burden of proof is reversed so that the challenged parties will have to prove that, in case of (i), there was no disproportion in the transaction and, in case of (iii), it could not recognise the intention to harm creditors.

8.3        Are there any entities that are excluded from bankruptcy proceedings and, if so, what is the applicable legislation?

Persons that are not registered in the register of commerce are not subject to bankruptcy proceedings.

Insolvencies of banks, securities dealers, insurance companies, securities firms and collective investment schemes are subject to special insolvency rules and their insolvency will be handled by the Swiss Financial Markets Authority.

Municipalities and other public bodies are not subject to debt enforcement proceedings resulting in bankruptcy.  Only enforcement proceedings on seizing of assets and the enforcement of collateral are possible against Swiss municipalities.

8.4        Are there any processes other than court proceedings that are available to a creditor to seize the assets of a company in an enforcement?

There is no possibility for a creditor to seize assets of a company in an enforcement other than through proceedings under the DEBA, which will always involve a court at a certain stage in order to verify the merits of a claim.

9.1        Is a party’s submission to a foreign jurisdiction legally binding and enforceable under the laws of your jurisdiction?

Overall, Swiss courts recognise the choice of foreign jurisdiction in civil law matters, subject to the limitations of the PILA and applicable international treaties, such as the Lugano Convention.  However, in certain cases, such as, for example, in matters relating to property, the jurisdiction is subject to exclusive mandatory rules so that it is not possible to freely chose the competent courts. 

As for one-sided jurisdiction clauses favouring one contractual party, the French supreme court, applying the Lugano Convention, has decided that such clauses can only be accepted if they are both drafted based on objective criteria and sufficiently precise, so that they meet the predictability requirement for such clauses.  This ruling has been criticised by a large number of scholars.  It cannot, however, be entirely ruled out that a Swiss court may take a similar view.

9.2        Is a party’s waiver of sovereign immunity legally binding and enforceable under the laws of your jurisdiction?

Persons and assets relating to a diplomatic mission are protected by immunity in accordance with the Vienna Convention on Diplomatic Relations.  Switzerland does, however, recognise and enforce waivers of sovereign immunity.

10.1      What are the licensing and other eligibility requirements in your jurisdiction for lenders to a company in your jurisdiction, if any? Are these licensing and eligibility requirements different for a “foreign” lender (i.e. a lender that is not located in your jurisdiction)? In connection with any such requirements, is a distinction made under the laws of your jurisdiction between a lender that is a bank versus a lender that is a non-bank? If there are such requirements in your jurisdiction, what are the consequences for a lender that has not satisfied such requirements but has nonetheless made a loan to a company in your jurisdiction? What are the licensing and other eligibility requirements in your jurisdiction for an agent under a syndicated facility for lenders to a company in your jurisdiction?

There are no licensing or other eligibility requirements in Switzerland for lenders to a company.  However, under certain circumstances, the granting of credits on a professional basis by entities in Switzerland or from Switzerland may be subject to anti-money laundering rules, in which case the relevant entity needs to become a member of a self-regulatory organisation.  In addition, lending activity may also give rise to a qualification as a bank if the entity refinances itself to a considerable extent with several banks and the relevant refinancing transactions exceed CHF 500 million.  In such cases, a banking licence issued by the Swiss Financial Markets Authority is required.  These requirements only apply if the lending activities are conducted in Switzerland.  The establishment of a physical presence of a foreign bank in Switzerland is also potentially subject to licensing requirements.  Foreign entities are considered foreign banks if they (a) hold a foreign banking licence, (b) use the term bank or banker in their trade name, or (c) conduct banking activities as assessed from a Swiss law perspective.  A foreign bank authorisation is necessary if such entity employs persons in Switzerland who, permanently and in a professional capacity in or from Switzerland, enter into transactions, maintain customer accounts, legally bind the foreign bank or forward client orders to a foreign bank by representing it for advertising or other purposes.  Entities exercising relevant activities that do not have a licence are subject to a large range of measures ranging from specific orders, industry bans and confiscation of profits to liquidation.

11.1      Please provide a short summary of any regulatory rules and market practice in your jurisdiction with respect to transitioning loans from LIBOR pricing.

In December 2020, the Swiss Financial Market Supervisory Authority issued regulatory guidance according to which supervised institutions should transition from IBOR rates to alternative reference rates (“ ARR ”), by amending existing contracts to include appropriate fallback clauses and base any new credit agreements on such ARR.

In Switzerland, the National Working Group on Swiss Franc Reference Rates (“ NWG ”) has recommended the use of Swiss Average Rate Overnight (“ SARON ”) calculated in arrears as a replacement rate for CHF LIBOR.

In line with such recommendations, banking institutions have amended existing contracts and template loan documentation to include interest rate provisions which are generally based on risk-free rates such as SARON (plus, as the case may be, credit adjustment spreads) as reference rates for the calculation of interests due.  The applicable interest rate is generally calculated in arrears with the lookback period for the relevant reference rate ending around two to five business days before the actual interest is due and the relevant reference rate being generally floored at zero.  A certain number of market participants have based the calculation of their interest rates on their respective cost of funds.

As for syndicated lending, the NWG has published a Rate Switch Amendment Agreement to facilitate the conversion of the interest rates applicable under syndicated loans.

12.1      How has COVID-19 impacted document execution and delivery requirements and mechanics in your jurisdiction during 2022 (including in respect of notary requirements and delivery of original documents)? Do you anticipate any changes in document execution and delivery requirements and mechanics implemented during 2021/2022 due to COVID-19 to continue into 2023 and beyond?

All limitations relating to COVID-19 were lifted by the Federal Council in March 2022.  However, the Federal Council maintained in effect the special regime for the holding of shareholders/members meetings until the end of 2022, permitting that such meetings be held in written or electronic form pursuant to art. 27 Ordinance 3 on Measures to Combat the Coronavirus (COVID-19), until the entry into force of the revision of Swiss corporate law on 1 January 2023.

Finally, since there are currently no national nor cantonal measures in place anymore, we do not expect any changes.

12.2      Are there any other material considerations that should be taken into account by lenders when participating in financings in your jurisdiction?

Other than the above, we have not identified other material considerations which in our view should be taken into account by lenders generally.

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Frédéric Bétrisey Bär & Karrer Ltd.

Taulant Dervishaj Bär & Karrer Ltd.

Lukas Roesler Bär & Karrer Ltd.

Micha Schilling Bär & Karrer Ltd.

Bär & Karrer Ltd.

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Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

Founded in 1939, our law firm combines the ability to represent clients in domestic or international matters with the personal interaction with clients that is traditional to a long established law firm.

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30.01.2024 | Patents , IP news

Switzerland among European top nations in innovation to fight cancer

Ahead of World Cancer Day (4 February), the European Patent Office (EPO) has just released a new...

23.01.2024 | Patents , Trade Marks

A study reveals that IP rights such as patents help Swiss SMEs and start-ups find investors

Many industries use patents, trade marks and copyright to protect their intellectual property. At...

Assigning rights and granting licences

Property rights can be assigned . Buyers become rights owners, which offers them advantages. As the holder of the rights, the buyer can, for example, bring actions against infringers on their own initiative.

In licence agreements, the uses of works are permitted but the rights still belong to the rights owner. A licence can limit the permitted uses in terms of place, time or scope. An exclusive licence grants the licensee the sole authority to use the work in the agreed manner. The licensee can assert the usage rights vis-à-vis third parties and the author. The exclusive licensee can also bring actions against infringers. We recommend consulting a specialist before drawing up a licence agreement. They will help you to avoid the various stumbling blocks and unfair competition.

Managing rights and licences

Companies often use protected works, including various computer programs. It is recommended to manage the rights and licences carefully by maintaining a list of all used works and keeping the user licences. You can then quickly find the answers to questions such as, “Can I use a photo commissioned for a brochure on the website too?” or “Does the new employee need another software licence or do we already have enough?”

Efficient management of rights and licences is especially important when using software, e.g. knowing who works with what programs and how many licences you really need. It might be sufficient to obtain a single-user licence for certain programmes and install it on a computer accessible to all.

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13.12.2023 | IPI

The IPI’s 2022/23 annual report has been published

Find out what the IPI was working on in the 2022/23 business year in our new annual report. Take a...

08.12.2023 | Indications of source , IPI

A swirling celebration of geographical indications

“The continued development of the Lisbon System is of great importance for trade mark holders...

13.02.2023 | Training , Event

Zoom event ‘Top tips to protect your business ideas’

You often hear people using the term ‘intellectual property’ or ‘IP’ in the entrepreneurial world....

19.01.2023 | Law and policy , Event

Conference on Intellectual Property & Sustainability at the University of Geneva

Date:              Tuesday, 7 February 2023 Time:              1.30pm – 5.30pm Location:       ...

07.07.2022 | Patents , Training , Event

IP@Lunch: Revised Swiss Patents Act – added value?

Date: 13 July 2022 Time: 11.30am – 2pm  Location: ZHAW, St.-Georgen-Platz 2, 8401 Winterthur,...

04.07.2022 | Event , Piraterie

Symposium: "Best practices in the fight against counterfeiting & piracy – NFTs not your cup of tea? Well, they should: NFTs as a new way of fighting counterfeiting and piracy"

Date: Thursday, 15 September 2022 Time: 10.00 – 17.00 Location: ...

Dominion Assignment Company

assignment swiss law

Founded by insurance industry experts, Independent Life has challenged traditional conventions and introduced innovation and an impressive roster of world class partners to the structured settlement market – including LKCM Headwater, KKR’s Kilter Finance, Hannover Re U.S. and BlackRock.

Our most recent innovation is iStructure – our indexed annuity which combines traditional structured settlement benefits with the power of uncapped indexing. iStructure is linked to the Franklin BofA World Index – designed exclusively for Independent Life by Franklin Templeton and Bank of America.

Introducing Dominion Assignment Company

Many iStructure case applications require or utilize an international assignment company. Independent Life has selected Dominion Assignment Company (Switzerland) SPC Limited (Dominion Assignment Company) as iStructure’s international assignment company. We are proud to introduce Dominion Assignment Company to U.S. markets including the structured settlement, settlement planning, and structured installment sale markets.

Dominion Assignment Company is incorporated and has a registered agent in the Cayman Islands. However, Dominion Assignment Company is completely owned, managed, controlled and regulated in Switzerland.

Swiss tax accounting rules combined with unique provisions of the U.S. – Switzerland Income Tax Treaty make Switzerland one of only a few jurisdictions in the world suitable for a company to accept assignments of periodic payment liabilities owed to U.S. payees from U.S. assignors while permitting the maximum income tax deferral for U.S. payees.

Dominion Assignment Company pays Swiss federal tax. Because it is Swiss-owned and Swiss-resident for Swiss tax purposes, Dominion Assignment Company is a resident of Switzerland for purposes of the tax treaty between Switzerland and the United States and qualifies for treaty benefits. Pursuant to Article 7 of the Treaty, Dominion Assignment Company is not taxed in the United States on the receipt of U.S.-source assignment payments because income derived in connection with a Swiss business is taxable only in Switzerland. Dominion Assignment Company also qualifies for treaty benefits with respect to annuities under Article 18 of the Treaty, which benefits include an effective override of the requirement of IRC Sec. 72(u) that a deferred annuity be owned by a “natural person” in order to be treated as an annuity for tax purposes.

Organization and Ownership

Dominion Assignment Company is established as a special purpose vehicle (SPV) segregated portfolio company owned by a trust for the benefit of Swiss public charities. Dominion Fiduciary Services (Switzerland) SA (Dominion Fiduciary Services) serves as trustee of the trust and operates and administers Dominion Assignment Company in Geneva.

Dominion Assignment Company has no obligations or liabilities other than the obligations of each segregated portfolio to a specific payee under the periodic payment liability which originated in that specific segregated portfolio. The entire SPV structure is insulated from creditors, such that no assets in any segregated portfolio can be reached by the creditors of any other segregated portfolio within the structure or by the creditors of any other Dominion entity.

Dominion Assignment Company and Dominion Fiduciary Services are part of the Dominion Group (Dominion). Established in 2001, with offices in Geneva, Jersey (Channel Islands), London, Malta, Savannah, and Singapore, Dominion has become one of the world’s largest independent employee-owned and managed trust, pension, and corporate service providers. Dominion’s worldwide client base includes sovereign wealth funds, institutional investors, banks, high net worth individuals and ultra-high net worth family offices.

Dominion employs over 100 staff across its worldwide offices with most of the principals in each office being qualified accountants and lawyers, along with corporate, tax, and investment fund administration specialists. Over 90% of Dominion’s employees have or are studying for a degree or professional qualification. Like Independent Life, Dominion places great importance on its staff being appropriately qualified in all areas of the business.

Dominion’s specialist teams in Geneva focus on the administration of sophisticated trust and investment structures, including special purpose vehicles such as Dominion Assignment Company. Dominion’s Geneva office provides a full suite of services including bookkeeping, tax reporting, investment monitoring, and the production of financial statements. Dominion, however, does not provide tax, legal or investment advice and does not receive any revenue from funds held within client structures, ensuring Dominion always serves each client’s best interests on a wholly independent basis.

The Swiss financial industry, including trustees and corporate administrators, is highly regulated, generally even more so than in the United States. Dominion Fiduciary Services is regulated by SO-FIT (Supervisory Organization for Financial Intermediaries and Trustees), a self-regulatory organization recognized and supervised by the Swiss government body, FINMA (Swiss Financial Market Supervisory Authority).

Swiss law requires that Dominion Assignment Company, including all its segregated portfolios, is subject to an annual independent financial audit. This objective examination and evaluation of financial statements ensures that each of Dominion Assignment Company’s segregated portfolios fairly and accurately represent the state of each segregated portfolio’s assets, liabilities, and income. In addition, it assures the assets backing the periodic payment liabilities exist and are held in a manner consistent with meeting Dominion Assignment Company’s payment obligations, providing independent assurance to payees.

Our partnership with Dominion Assignment Company represents another example of how Independent Life is combining innovation and financial security to improve and grow the structured settlement market and provide attorneys, consultants and their clients with industry leading settlement solutions.

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Lapwai, ID (83501)

A mix of clouds and sun. High 57F. Winds light and variable..

A clear sky. Low 34F. Winds light and variable.

Updated: February 22, 2024 @ 1:14 pm

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For three years the Moscow City Council has done its best to avoid a flagrant but sensitive issue. Two women washing cars last week, minus their shirts, forced the issue

Time to address topless question; city of Moscow needs an enforceable indecent exposure law

  • Editorial, Craig Clohessy
  • Jun 24, 2002
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For three years the Moscow City Council has done its best to avoid a flagrant but sensitive issue.

Two women washing cars last week, minus their shirts, forced the issue of public toplessness back into the council's lap. And, based on the community's reaction, we doubt the council will be allowed to let the issue remain unresolved.

Moscow's indecent exposure ordinance was ruled too vague by a judge in 1998, resulting in the law being removed from the books. That left only the state law for the city to fall back on, and Idaho doesn't prevent women from walking around in public without their shirts.

When the issue came back before the council in 1999, a final vote was split.

Oddly enough, the women on the council voted against the topless ordinance and the men for the law.

When word of the public car wash broke on Friday, council members quickly learned they would have to do something.

By law the women, who said they were trying to earn rent money, were within their rights. Police eventually responded, but only because a fight broke out near the car washers.

The public, however, was not prepared to accept the city's inability to enforce public decency.

Council members, the police and city leaders spent much of Friday answering phone calls from irate residents.

"We make a big deal in this community of protecting our children," said First Presbyterian Church Pastor Jim Fisher. "Is this something we want to promote to our kids as OK? E I think the moral value of the majority ought to be important for something."

Councilman Steve Busch, who served on the council when the issue was last raised, agreed something will have to be done.

"It looks like the issue is being forced on us again," Busch said.

It's strange that such a readily accepted public standard elsewhere must be forced on the Moscow council to put in place.

We live in a very understanding community, but there should be limits to what the public is expected to put up with.

The council can't avoid the issue any longer. It's long past time for the city to develop an indecent exposure law that sticks.

-- Craig Clohessy, for the editorial board

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  6. International Assignments: Legal Framework, Information, and Guideline

    At a glance An assignment is the temporary assignment of an employee from their country of employment to another country. There are no specific standards in Swiss law for the assignment of employees abroad. Assignments concern the areas of labour law, tax law, the right of residence in the destination country and social security issues.

  7. Contract Formation and Enforcement in Switzerland: Overview

    The Q&A gives a high-level overview of key concepts of contract law, including contract formation with general information on authority and capacity, formal legal requirements, preliminary agreements and pre-contract considerations, formalities for execution, deeds, notarisation, legalisation and registration requirements, electronic signatures ...

  8. Transfer of IP rights in Switzerland

    Swiss Intellectual Property law requires both, (i) an undertaking to assign and (ii) a declaration to assign (which is considered the executive part of the assignment). In good contract drafting practices, the parties agree to both assignment steps within one document ("…undertake to assign and hereby assign…").

  9. Class actions in Switzerland

    Subject to a contractual provision to the contrary, Swiss law permits the transfer of monetary claims to a third party by way of assignment, without the consent of the debtor. Accordingly, instead of a joinder of parties, the claimants might also assign their claims to one party (e.g., to a consumer organisation or an ad hoc association founded ...

  10. Assignment of Arbitration Agreements • Aceris Law

    For instance, in Switzerland, the question of whether the parties are bound by the assignment is determined by the law governing the arbitration agreement under the Swiss conflict of laws rules. [9] On the other hand, the lex fori may encourage forum shopping in a search to find a more favourable legal framework for the assignment. [10]

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  12. PDF Unsigned contracts: can they be binding under Swiss law?

    contracts; and (v) the assignment of certain intellectual property rights (trademarks, patent and designs - but not copyright). ... Swiss contract law presumes that when the parties wish to be bound by a signed agreement, they only intend to be legally bound when the agreement is actually signed. However, this presumption may be reversed, for

  13. PDF Legal considerations of assignment of receivables under Swiss

    Pursuant to Swiss substantive law, the assignment of receivables must be made in writing. In such respect, scanned copies of duly executed original copies of declarations of assignment do not qualify as instruments in writing.

  14. Swiss Assignment Agreement

    Assignment means the assignments for security purposes under this Agreement by the Assignor of the Assigned Claims to the Administrative Agent pursuant to art. 164 et seq. of the Swiss Code of Obligations ( Sicherungszession );

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  16. Assignments: The Basic Law

    Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court, 35 Cal. 2d 109, 113-114 (Cal. 1950). An assignment will generally be permitted under the law unless there is an express prohibition against assignment ...

  17. Rights assignment and licensing

    Assigning rights and granting licences Property rights can be assigned. Buyers become rights owners, which offers them advantages. As the holder of the rights, the buyer can, for example, bring actions against infringers on their own initiative. In licence agreements, the uses of works are permitted but the rights still belong to the rights owner.

  18. Dominion Assignment Company

    Swiss law requires that Dominion Assignment Company, including all its segregated portfolios, is subject to an annual independent financial audit. This objective examination and evaluation of financial statements ensures that each of Dominion Assignment Company's segregated portfolios fairly and accurately represent the state of each ...

  19. At a glance: security interests and guarantees in Switzerland

    In Switzerland, the two most commonly used types of security interests are a right of pledge and a security assignment or security transfer. Swiss law does not recognise the concept of a floating ...

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    February 20, 2024 at 6:56 AM EST. Save. The chairman of Temenos AG said the company isn't going to give itself a deadline for naming a new chief executive officer as the embattled Swiss fintech ...

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