Seizure of money-laundering assets
By Claudio Simonetti
Our Supreme Court (BGE/ATF 129 IV 322, 6S.22/2003)
recently resolved an important legal dispute. It was held that the author of a
money laundering offence committed in Switzerland shall be liable for damages
towards the victim of the predicate criminal conduct, i.e. the crime as a
result of which proceeds were generated, and which were "laundered"
in Switzerland.
As a consequence it will now be possible to seek damages not only from the author of
the predicate offence but also against the individual who committed a
money-laundering offence in Switzerland, and, where appropriate, apply for the
seizure and confiscation (in criminal and in civil proceedings) of their assets
in Switzerland in favour of the victim.
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Condominium and arbitration agreement
By Francesco Naef
Is an arbitration agreement, foreseen in the bylaws of a condominium, binding for the parties in a lawsuit between the corporation of co-owners and one co-owner?
According to a recent decision of the Swiss Supreme Court
(decision 4P.113/2001 of 11 September 2001)
, there may be two different answers to this question, depending on whether the nature of the arbitration proceeding be domestic or international.
On one hand, as the Concordat on domestic arbitration provides stringent form requirements for the validity of the arbitration agreement (article 6), an arbitration clause in the bylaws of a condominium is binding only for that (new) co-owner, which declared in written form to expressly accept said clause (DTF 110 Ia 106). On the other hand, according to the Swiss Private International Law Act (article 178) which governs international arbitration, the arbitration agreement in the bylaws must not be necessarily accepted in explicit way by the co-owner: his general acceptance of the bylaws is sufficient. It is decisive to know the domicile of the co-owner at the time of his acceptance of the bylaws: since it will be a domestic arbitration if his domicile was in Switzerland, conversely an international arbitration if it was abroad.
On the contrary, the corporation of co-owners is bound by the arbitration clause (in an international arbitration), simply if that clause was included in the bylaws of condominium at the time of the beginning of the lawsuit.
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Switzerland’s European integration policy
By Daniele Calvarese
On 6 December 1992 the Swiss people decided not become part
of the European Union Although the Swiss government has confirmed that EU
membership is the long-term goal of its integration policy it has since that
date been negotiating separate agreements with the European Community.
As of June 21 1999 Switzerland and the European Community
have signed seven bilateral agreements relating to the following sectors
· Free movement of persons
· Civil aviation
· Overland transport
· Agriculture
· Technical barriers to trade
· Public Procurement markets
· Research
The agreements were approved by the Swiss parliament
in its 1999 summer/autumn session and by the Swiss people on 21 May 2000. The
agreements have come into force on 1 June 2002. The step by step
introduction of freedom of movement of persons foresees that after June 1st
2004 controls in relation to the working conditions of EU citizens are
brought to end. From that date on companion measures to prevent social welfare
and wage dumping will be introduced. The companion measures are essentially the
facilitation of the adoption of collective labour agreements and, if necessary,
the introduction of a model employment contract setting minimum wages levels
differentiated according to regions.
Of particular interest to companies willing to invest in
Switzerland is the agreement on the free movement of persons, which will
gradually open up the labour market. The agreement covers workers, the
self-employed, and persons not gainfully employed of sufficient financial means.
Moreover, for companies with domicile in neighbouring countries the agreement on
public procurement markets will represent a chance to extend their business in
Switzerland.
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Medical procedure as a criminal offence
By Francesco Naef
The Swiss Federal Court, i.e. the country's court of last resort, has decided in a recent case (DTF 124 IV 258) that a medical procedure performed without the
informed consent of the patient is a personal injury punishable under the Swiss Penal Code, even if it was performed
according to the physician's duty of care.
This decision is important because the Court has confirmed a previous ruling (DTF 99 IV 208) it had handed down on this issue, rejecting the dissenting opinions of several scholarly commentators.
The patient's consent can be expressed or implied, but the Court did point out that the patient should give his
informed consent before the operation, and that his will only is the decisive element: an operation recommended by the
medical science is a personal injury if it is performed against the patient's will.
This means that his consent cannot be readily assumed simply because the operation was objectively recommended or reasonable: the patient is free to take unreasonable decisions about his own health.
Finally, the patient's consent must be an informed one: he can only give a valid consent if he is informed by the physician
about the operation's risks (DTF 117 Ib 197).
This judicial doctrine of the Federal Court means that a medical operation can often be seen as a criminal offence. That is
an issue that should be very carefully considered by physicians involved in medical malpractice cases.
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Is Islamic Law compatible with Swiss Law?
By Claudio Simonetti
In a very recent case (DTF 125 III 443), the Swiss Federal Court (our Court of last resort) held that the payment of default interest, i.e. interest a debtor who defaults on payment of a financial debt must pay to the creditor, is neither a fundamental principle of current Swiss law nor an universally recog-nised and generally admitted tenet. Our Federal Court was considering a matter that involves a claim arising from an unpaid irrevocable letter of credit dating back to 1983 issued by a Saudi bank in favour a Beirut-based company. After several unsuccessful attempts to cash the letter of credit, the Lebanese company eventually assigned its claim to the Swiss branch of a French bank. The bank succeeded in freezing the Saudi bank's assets held in Switzerland and sued for the amount of the letter of credit plus default interest (on a 16 years-old claim!).
The Cantonal Court of first instance ruled that Saudi law was applicable to the relationships be-tween the Saudi bank and the Lebanese company, and hence to the assigned claim. It then es-tablished that Saudi law - much like other Islamic countries' law - strictly prohibits the payment of penalty interest. It further found that neither the letter of credit, nor the ICC rules on documentary credits which the letter of credit referred to, included a provision concerning default interest. As a consequence, it held that no default interest was due.
Before the Federal Court the plaintiff invoked two main arguments: firstly, that the application of Saudi law and therefore the prohibition of default interest led to a result incompatible with Swiss public policy; and secondly, that default interest - by reason of its importance in trade - should be due regardless of the provisions of Saudi law.
This second argument was immediately set aside by our Federal Court simply on the ground that the provisions of Swiss law on default interest may be pre-empted by mutual agreement of the par-ties and are therefore not mandatory. Only a provision of law that is mandatory by reason of its special social, political or economical aims may be applicable regardless of the relevant foreign law.
As to the plaintiff's first argument, our Federal Court emphasized the fact that the original transac-tion involved foreign parties based in Mideastern countries and that such a commercial transaction was only marginally linked to Switzerland, so that great circumspection was necessary before imposing Swiss legal tenets on a relationship governed by foreign law. According to our Federal Court only the violation of an universally recognised and almost constantly admitted tenet can justify the application of a provision of Swiss rather than foreign law.
To begin with our Federal Court put the problem into a historical perspective: the Church has for centuries prohibited the payment of interest, and Islamic law continues to do so; and it concluded that the payment of default interest is not an universally recognised rule. Our Federal Court then noted that the concept of default interest is not generally admitted under Swiss law either (e.g. in certain cases Social security provisions do not foresee the payment of default interest).
Thus our Federal court turned down the appeal and upheld the decision of the Cantonal Court.
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