Disputes Insights #3: Is the Commercial Court of Zurich the Right Choice for Your Dispute?

If you have the option to choose the forum for your dispute, should you consider the Zurich Commercial Court (ZCC) and draft the jurisdiction clause of your contracts in such a way that it favours proceedings before the ZCC?

The Swiss Code of Civil Procedure is uniform across Switzerland. The reality in the courtroom is not. Therefore, when choosing which court to bring your dispute to, it is important to consider certain characteristics of Swiss Civil Procedure and the actual practice of the Zurich Commercial Court.

General Features of Swiss Civil Procedure

No Pre-Trial Discovery

Swiss civil proceedings do not provide for pre-trial discovery. There are no depositions, nor is there a disclosure or document production process prior to trial. In practice, this means that each party must independently obtain the evidence it requires, without assistance from the court. While this contributes to a leaner, more cost-effective process, it also limits fact-finding. Parties cannot access potentially relevant documents in the possession of the opposing party, which can affect risk assessment and case preparation.

Strict Standard of Proof

A fact is considered proven under Swiss law only if the court is convinced of its truth. This is a significantly higher threshold than the "preponderance of probability" standard used in many common law jurisdictions. This strict evidentiary standard makes it particularly challenging to quantify losses based on hypothetical comparisons, such as financial forecasts or alternative outcomes.

Early and Detailed Substantiation Required

Claimants must present their case in full detail at the outset, and defendants are equally required to substantiate their defence with thorough specificity. This includes a clear and specific account of all relevant events, ideally including precise dates, times, and facts. Failure to provide sufficient substantiation may result in dismissal. Swiss proceedings leave little room for shaping the case as it progresses.

Key Characteristics of the Zurich Commercial Court

In addition to the general features of Swiss civil litigation, the ZCC follows certain practices that distinguish it from other courts:

Written-Only Proceedings

ZCC proceedings are conducted entirely in writing. Parties file written submissions and rely exclusively on documentary evidence. There are no oral hearings or oral arguments. The court bases its decision solely on the written record.

No Witness Testimony

In practice, the ZCC does not hear witnesses. Witness statements are generally neither customary nor admissible. As a result, parties are limited to documentary evidence and legal argumentation in their written briefs.

Conciliation Hearing

After the exchange of initial submissions, the ZCC holds a conciliation hearing. This informal meeting is designed to explore the possibility of settlement. A delegation of two judges presents a preliminary assessment of the case and proposes a specific and quantified settlement solution. No minutes are taken, and discussions remain confidential. This pragmatic approach enjoys a high success rate and often leads to early resolution.

Composition of the Bench

The ZCC sits in panels of five judges. Two are professional judges from the Zurich High Court, appointed through the political system. The remaining three are not professional judges with industry backgrounds, drawn from sectors such as banking, insurance, auditing, construction, pharmaceuticals and the machine industry. While this brings valuable sector expertise to the bench, it can raise concerns about perceived impartiality – particularly in disputes involving parties from those industries. For example, in a dispute between a bank and its customer, the three not professional judges regularly include in-house counsel from other banks.

Limited Appeal

Decisions of the ZCC can be appealed to the Swiss Federal Supreme Court. However, the appeal is limited to points of law; the Federal Supreme Court does not re-evaluate the facts established by the ZCC. This makes the initial proceedings particularly important, as factual findings are final.

Strategic Considerations

The ZCC's streamlined process is efficient and settlement-oriented. However, it can be challenging for parties that require an evidentiary hearing or access to information controlled by the other side. Under Swiss law, the party that brings a claim bears the burden of proof. Therefore, the absence of oral hearings and witness testimony tends to favour defendants and can make it difficult for claimants to fully present their case.

The composition of the bench, while designed to enhance technical understanding, may raise concerns when one party is closely aligned with the industry represented. For instance, in disputes involving a bank acting against insurers, all three not professional judges will come from the insurance sector, which could create the impression – whether justified or not – of structural imbalance. Case law in some of these areas reflects a strong alignment with the perspectives of the represented industries.

The conciliation hearing is a valuable mechanism for facilitating settlement and reflects a broader Swiss tradition of compromise. However, the process can place considerable pressure on parties to settle. Furthermore, the same judge who presents the preliminary assessment often also drafts the final judgment, which, while permissible under Swiss law, may raise fairness concerns from an international perspective.

Conclusion

The ZCC may be a suitable forum if:

• Your strategy is to resolve the matter through settlement after initial pleadings;

• You are likely to be the defendant in future disputes;

• You do not rely on obtaining information from the opposing party;

• Your company operates in a sector represented on the ZCC bench.

By contrast, you may wish to consider alternative forums if:

• You anticipate the need for extensive fact-finding or live testimony;

• You expect to be in the position of claimant;

• You face an information asymmetry;

• You are opposing a party from a sector with strong representation on the bench.

The upcoming introduction of English-language proceedings before the Zurich International Commercial Court (ZICC) will improve accessibility for international parties. However, apart from the language, the procedural framework will remain the same. The practical considerations described above will therefore continue to apply.