<h3>1. Overview</h3>
<p>On March 17, 2023, the Swiss Parliament approved revisions to the Swiss Civil Procedure Code that improve litigants&#8216; access to Swiss courts. Specifically, the revisions enable cantons to establish international commercial courts to hear certain commercial disputes. Parties to such proceedings may choose to conduct the proceedings in English. The revisions also introduce a right for companies to refuse cooperation in civil proceedings by allowing them to refuse testimony and communications from their in-house legal counsel. The revised CPC further permits remote hearings. Finally, the new law obliges the courts to reduce advances on costs, extends the application of the conciliation procedure, and makes it easier to file multiple claims at the same time or to bring a counterclaim. A collective redress procedure, which was highly controversial in the consultation process, is not part of the bill but will be dealt with separately.</p>
<p>The final text of the revised CPC will be published in the Federal Gazette soon; currently only the text of the final vote of the Parliament is <a href="https://www.parlament.ch/centers/eparl/curia/2020/20200026/Schlussabstimmungstext%201%20SN%20D.pdf" target="_blank" rel="noopener">available</a> online.</p>
<p>If no referendum is lodged against it, the revised CPC will enter into force, likely on January 1, 2025.</p>
<h3>2. Creation of International Commercial Courts and Use of English and Other Official Languages as Language of the Proceedings</h3>
<p>The revised CPC permits cantons to establish international commercial courts. Zurich and Geneva have expressed an interest in establishing such courts.</p>
<p>These international commercial courts will be able to hear commercial cases in which at least one party is resident abroad, the amount in dispute is at least CHF 100,000, and the parties agreed that the respective commercial court shall have jurisdiction (article 6(4)(c) CPC-bill).</p>
<p>The cantons may further provide that parties in proceedings before an international commercial court can choose to litigate in English. The cantons may further allow the parties to use another official language of Switzerland that is not otherwise spoken in the canton in question (article 129(2) CPC-bill). If the parties elect to conduct international commercial court proceedings in English, they will also be permitted to appeal the decision of the international commercial court in English before the Swiss Federal Supreme Court (article 42(1bis) Swiss Federal Supreme Court Act-bill).</p>
<p>In Parliament, whether or not English or a language other than the official language in the canton in question should be allowed as languages of the proceedings was controversial. The law adopted by the Parliament is more limited than the draft bill of the Federal Council. According to the Parliament&#8217;s bill, it is not permissible to waive the use of the official language in advance (article 129(2)(a) CPC-bill). In addition, English may only be used before the international commercial courts once they are established (article 129(2)(b) CPC-bill).</p>
<h3>3. Right of Companies to Refuse Cooperation in Civil Proceedings with Regard to the Activities of their In-house Legal Department</h3>
<p>Under the new law, Swiss companies may refuse the cooperation in civil proceedings with regard to the activities of their in-house legal department (article 167a CPC-bill).</p>
<p>To invoke the right to refuse to cooperate, the company that is party to civil proceedings must be registered as a legal entity in the Swiss Commercial Register or in a comparable foreign register, its legal department must be headed by a person with a license to practice law (either in Switzerland or in his/her country of origin), and the activity in question must be part of a lawyer&#8217;s professional activities.</p>
<p>This provision limits the procedural disadvantages that Swiss companies have historically encountered vis-à-vis foreign companies because the communications of their in-house counsel are not protected by attorney-client privilege under Swiss law. During the consultation period for the new law, business representatives favored the amendment, which the Swiss Parliament supported.</p>
<h3>4. Use of Electronic Communications Technology in Court Hearings</h3>
<p>Going beyond the draft proposed by the Federal Council, the Parliament has included provisions on the use of electronic communications technology in court hearings. With the parties&#8216; consent, courts may conduct hearings by video conference and other electronic means (article 141a CPC-bill), including examining witnesses, questioning parties, and taking expert evidence (articles 170a, 187(1) and 193 CPC-bill), provided, however, that all parties to the proceedings participate and the requisite data protections and security are guaranteed. Evidentiary hearings conducted by video conference or other electronic means will need to be recorded (article 141b(1) CPC-bill).</p>
<h3>5. Reduction of Cost Barriers</h3>
<p>Various new provisions in the law regarding advances on costs and the liquidation of legal costs will also help to facilitate access to the courts:</p>
<p>Courts will now only be able to request plaintiffs to pay half of the total expected court costs in advance, instead of the total expected court costs (article 98 CPC-bill). Most cantons disapproved of this amendment, so that the Federal Council provided for a number of exceptions (article 98(2) CPC-bill), which the Parliament has adopted. Accordingly, in international commercial disputes, direct actions before higher courts, conciliation proceedings, certain summary proceedings, and appeals, courts may still require an advance of the total expected court costs.</p>
<p>Courts may continue to set off court costs against advance payments made by a party eventually found to be liable for costs. However, under the new law, advances paid by the party not liable for costs shall be repaid to that party. Any shortfall shall be claimed from the party liable to pay costs (article 111 CPC-bill). This means that the parties shall no longer bear the risk of collecting the costs from the other party, but the state shall bear the risk of cost collection.</p>
<p>Furthermore, under the new law, legal aid can be granted in proceedings concerning the precautionary taking of evidence (article 118(2) CPC-bill). This amendment will overturn the case law of the Swiss Federal Supreme Court which has previously denied legal aid in such cases.</p>
<h3>6. Other Revisions</h3>
<ul>
<li><strong>Extension of the conciliation procedure</strong>: Under the new law, the application of the conciliation procedure will be extended with regard to certain aspects: For example, conciliation authorities may now propose a decision to the parties in disputes with an amount in dispute of up to CHF 10,000 (article 210(1)(c) CPC-bill). In addition, a voluntary conciliation procedure shall be introduced for certain disputes before courts of sole cantonal instance, including commercial courts (articles 198(f) and 199(3) CPC-bill). This means that in future, it will be possible to interrupt a limitation period by means of a request for conciliation even in these cases.</li>
<li><strong>Improvements with regard to the coordination of proceedings</strong>: In line with the current case law of the Federal Supreme Court, a party will, according to the new law, be allowed to submit multiple claims in the same proceedings, even if the various claims would be subject to a different material jurisdiction or different types of proceedings (to the extent such different jurisdiction or types of proceedings only apply because of the amount in dispute of the various claims). In the case of different types of proceedings, a court will have to adjudicate all claims in ordinary proceedings (article 90(2) CPC-bill). Additionally, a party shall be allowed to file a counterclaim – irrespective of the different type of proceeding that would ordinarily govern such counterclaim – in ordinary proceedings; on the one hand, this shall apply to a counterclaim which would have to be dealt with in the simplified procedure on the basis of the amount in dispute involved, and on the other hand, in the case of a negative declaratory action in response to a partial action (this is in line with current case law of the Federal Supreme Court; article 224(1bis) CPC-bill).</li>
<li><strong>Re-formulation of the limits for new facts and evidence</strong>: The Swiss Federal Council left the provision on the limits for introducing new facts and evidence untouched in its draft. The Parliament has now introduced an amendment to article 229 CPC-bill. According to this amendment, if neither a second exchange of briefs nor an instruction hearing has taken place, new facts and evidence may be presented without restriction in the main hearing in the opening statement (article 229(1) CPC-bill). In other cases, only so-called proper and improper<em> nova</em> may be presented, at the latest until the opening statement in the main hearing (article 229(2) CPC-bill).</li>
<li><strong>Expert opinions of party-appointed experts as evidence</strong>: Expert opinions of party-appointed experts will no longer be considered as mere party allegations, but will now be treated as documentary evidence (article 177 CPC-bill). That being said, a court will be free to assess the evidentiary weight of the expert opinion.</li>
<li><strong>Interim measures against the media</strong>: The text adopted by the Parliament limits the so-called media privilege in connection with interim measures. According to the revised CPC, in order to adopt interim measures against the media, the disadvantage caused to the applicant most no longer be «particularly serious»; a «serious disadvantage» will be sufficient (article 266(a) CPC-bill).</li>
</ul>
<h3>7. Conclusion</h3>
<p>The adopted revision of the CPC improves practicality and law enforcement: In particular, the creation of a legal basis for international commercial courts and the admission of other official languages and English as languages of the proceedings will strengthen Switzerland&#8217;s position as a location for the resolution of international commercial disputes. The introduction of the use of electronic communications technology in hearings, lowering cost barriers and the extension of the application of the conciliation procedure (with the possibility to interrupt limitation periods more easily, amongst others, in commercial cases) will facilitate access to justice. In this context, it is notable that according to the new law, submissions filed with a Swiss court that does not have jurisdiction will need to be forwarded <em>ex officio</em> to the competent court (article 143(1bis) CPC-bill). The right of companies to refuse to cooperate with regard to activities of their in-house legal department will eliminate existing procedural disadvantages of Swiss companies in comparison to foreign companies.</p>


Homburger_Illu_ZPO_BH_Preview_2020_10 (2)

Revisions to the Swiss Civil Procedure Code

Corporate / M&A

Employment and Executive Compensation

IP / IT

Competition

Regulatory

Cadence-webnews

Homburger News

Candence Design Systems Inc. aquires BETA CAE Systems

Homburger advises Cadence on its  USD 1.24 bn acquisition of BETA CAE Systems

<p>On March 5, 2024, Cadence Design Systems Inc. (Nasdaq: CDNS), a leading global EDA and Intelligent System Design provider, announced that it has signed a definitive agreement to acquire BETA CAE Systems International AG, a leading provider of multi-domain, engineering simulation solutions headquartered in Switzerland.</p>
<p>Under the terms of the definitive agreement, Cadence will pay approximately USD 1.24 bn for the transaction, with 60 percent of the consideration to be paid in cash and 40 percent to be paid through the issuance of Cadence common stock to current BETA CAE shareholders. The transaction, which is subject to customary conditions, is expected to close in the second quarter of this year.</p>
<p>Homburger advises Cadence Design Systems Inc. on the Swiss aspects of the transaction. The Homburger team is led by Daniel Hasler and includes Léonard Aeschlimann, Bianca Nedwed, Daniel Bötticher, Paula Delissen and Luc Huber (all Corporate / M&amp;A), Gregor Bühler and Kimberly Amrein (both Employment and Executive Compensation), Kirsten Wesiak-Schmidt and Marc Wang (both IP / IT), Jonas Krull (Competition, Regulatory), as well as Peter Müller (Tax).</p>


Kimberly
Amrein

Homburger advises Cadence on its USD 1.24 bn acquisition of BETA CAE Systems

Revisions to the Swiss Civil Procedure Code

Gewährserfordernis und Compliance

Join the Team

Kimberly Amrein

Career

Languages

Bar Registration

Teams

KimberlyAmrein

Homburger advises Cadence on its USD 1.24 bn acquisition of BETA CAE Systems

Revisions to the Swiss Civil Procedure Code

Gewährserfordernis und Compliance

Join the Team

Kimberly Amrein

Career

Languages

Bar Registration

Teams

Kimberly
Amrein