Execution of US Pre-Trial Discovery Orders in Switzerland
By Mirco Ceregato, Bratschi Ltd.
The taking of a deposition in Switzerland is subject to Art. 271 of the Swiss Criminal Code. Therefore, in cases where jurisdictional discovery is granted by a US court against a defendant who resides in Switzerland, all involved parties and counsels are at risk of becoming liable to prosecution in Switzerland if the envisaged legal path is not duly followed.
In order to prevent the risk of being prosecuted, the means envisaged in the Hague Evidence Convention (“Convention”) must be used. The US was a signing party and Switzerland joined the Convention in 1994. The Convention comprises two separate and independent systems for the taking of evidence abroad: Chapter I of the Convention sets out provisions for the taking of evidence by means of Letters of Request; Chapter II provides for the taking of evidence by Consuls and Commissioners.
According to Chapter I, the judicial authority which ordered the evidencetaking sends a Letter of Request to the central authority at the requested state. The central authority of the requested state checks on formalities of the request and, if formalities are complied with, it forwards the Letter of Request to the competent judicial authority for execution. As Switzerland is a federalist country with twentysix cantons, Switzerland has not one central authority, but twenty-six. However, it is possible to file the Letter of Request with the Swiss Federal Department of Justice which forwards it to the competent central authority. The chart below illustrates this.
According to Art. 23 of the Convention, a contracting state may, at the time of signature, ratification, or accession, declare that it will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in common-law countries. Switzerland has made use of this reservation. However, such reservation is not intended to prohibit common-law style pre-trial discovery. This would be contrary to the purpose of the treaty. According to the Swiss Federal Supreme Court, the effect of Switzerland’s Art. 23 declaration is that Switzerland will accept Letters of Request for the production of documents issued during the pre-trial discovery period where the relevance and precision of the request matches the criteria inspired by Swiss procedural law. The practical problems when executing US pre-trial discovery orders in Switzerland, according to Chapter I of the Convention, are:
- Where documents are requested, the documents must be specifically identified and the relevance of the requested document for the dispute must be clear from the Letter of Request.
- Where witness examination is requested, the individual interrogatories must be drafted with clarity and the relevance of the questions for the dispute must be substantiated.
- The form used to take oral testimony for the purpose of pre-trial discovery (deposition) is unknown in Switzerland. Cross-examination must be requested in the Request Letter by way of a special method (Art. 9(2) of the Convention). A Swiss judge must survey the questioning and must intervene when necessary.
- English is not an offcial language in Switzerland.
- Switzerland has no sharp measures of compulsion against a party which does not comply with an order for document production or an order for testimony in a civil procedure.
Chapter II of the Convention envisages the use of US Consuls and Commissioners to execute a US pre-trial discovery order abroad instead of using the foreign court. To do so, the claimant must file a respective motion with the competent court in the US. However, in order to legally execute such a US court order for pre-trial discovery, two Swiss permissions are necessary. Firstly, the central authority must issue a permission according to Art. 15, para 2 of the Convention. And, secondly, the Swiss Federal Department of Justice must issue a permission according to Art. 271 of the Swiss Criminal Code. The chart on the right illustrates the procedure.
In contrast to the proceeding envisaged by Chapter I of the Convention, the evidence is to be taken not only according to the procedures provided for by the law of the requesting court (i.e. according to US law) but also by US persons familiar with commonlaw style, pre-trial discovery orders.
Although Chapter II of the Convention provides for a good solution for overcoming the practical problems outlined when using Chapter I, the defendant remains free to not cooperate at all or to interrupt the taking of evidence at any time (Art. 21, let. c of the Convention). This makes the use of the procedures envisaged in the Convention unattractive for US claimants. Therefore, US counsels often try to execute the evidence-taking against a Swiss resident on US soil or in countries which have no blocking statutes (Switzerland has one with Art. 271 of its Criminal Code). In Société Nationale Industrielle Aérospatiale, et al. vs US District Court for the Southern District of Iowa, 482 US 522, 107 S.Ct. 2542, 96 L.Ed.2d 461 (1987), the US Supreme Court held that the discovery procedures provided by the Convention do not necessarily control discovery with respect to foreign litigants before an American court. When determining whether to require use of the optional Convention procedures, or to permit discovery pursuant to the US Federal Rules, the Supreme Court instructed courts to consider the particular facts of each case, the sovereign interests at issue, and the likelihood that resort to Hague Convention procedures would prove effective. According to this precedent, there may be an avenue to circumvent the use of the Convention when executing a pre-trial discovery order in Switzerland. However, this must be assessed on a case by case basis.
Mirco CeregatoGGI member firm
Law Firm Services, Tax
Basel, Bern, Lausanne, St. Gallen, Zurich, Switzerland
T: +41 58 258 14 00
Bratschi Ltd is one of Switzerland’s leading law firms. It has offices in Zurich, Zug, Berne, Lausanne, Basel, and St. Gallen and focuses on business and tax law and counselling for medium-size enterprises.
Attorney-at-law and partner, Mirco Ceregato, leads Bratschi’s litigation and investigation department. In collaboration with US counsels, he has represented a large number of Swiss banks in the US Department of Justice’s programme for Non-Prosecution Agreements or Non- Target Letters for Swiss banks in the US and is a member of the American Bar Association’s International Section.
Published: Litigation & Dispute Resolution Newsletter, No. 11, Autumn 2019 l Photo: Bumble Dee - stock.adobe.com