Article of Dr. Helmut Schwärzler, Gabriela Loepfe-Lazar and Isabelle Thöny, International Bar Association, 02.01.2019

In October 2012 the Swiss Federal Supreme Court ordered a Swiss bank to reimburse kickbacks to its client with retroactive effect. This judgement made clear that clients with an asset management agreement are entitled to all commissions and/or retrocessions that financial service providers receive from third parties. The judgment found that the obligation to surrender kickbacks depends also on a conflict of interest.

Although in this judgement, the Federal Supreme Court has made the obligation to surrender kickbacks dependent on a conflict of interest, literature and established case law disagree with this narrow interpretation. The legal opinion that the reimbursement of kickbacks to the client does not necessarily presuppose a conflict of interest between the financial service provider and the third party was referred as “obiter dictum” by the Commercial Court of Canton of Zurich in 2017.

For principals the following questions arise: Under which circumstances and based on which contractual relationships can retrocession fees be reclaimed? Can an obligation to surrender kickbacks be waived? How is the prescription of claims regulated in Switzerland?

The following article is intended to give a brief overview on the current case law and legal practice on retrocessions in Switzerland.

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