New bespoke rules for private clients arbitration: the 2025 Supplemental Swiss Rules for Trust, Estate and Foundation Disputes

Introduction

In accordance with Swiss statutory provisions governing domestic and international arbitration, amended as of 1 January 2021, arbitration clauses contained in unilateral legal instruments, such as wills, trust deeds and foundations' statutes, are deemed valid if the seat of the arbitration is in Switzerland.

The TEF Rules entering into force on 1 July 2025 address specific needs to better resolve private client disputes, which require discretion, confidentiality and efficiency, coupled with the capacity to handle complex multiparty matters. The TEF Rules effectively deal with distinct issues that do not arise in commercial arbitration governed by the standard Swiss Rules, by supplementing those rules to cater to arbitrations over inheritance disputes and internal disputes arising in connection with trusts and foundations.

The TEF Rules are available here. The Swiss Arbitration Centre has also published a helpful Explanatory Note, which is accessible here.

The TEF Rules cover a broad range of disputes regarding trust, estate and foundations matters, including disputes arising from inheritance contracts ("TEF Disputes"). In line with their purpose, their scope of application also extends to merely putative or disputed heirs or beneficiaries of foundations or trusts, even if they did not sign the arbitration clause. By contrast, this is not the case for disputes arising between heirs or trustees, on the one hand, and third parties, on the other. Such disputes do not qualify as TEF Disputes, as arbitration clauses contained in last wills, trust deeds, foundations' statutes or inheritance contracts ("Instruments") as a rule do not bind third parties.

Key aspects of the TEF Rules

The TEF Rules contain only four provisions, aimed to:

• define their scope of application as arbitration rules (Article 1);
• deal with notifications, rights to information and representation of the persons born or unborn affected by the dispute referred to arbitration ("Entitled Persons") (Article 2);
• address the constitution of the arbitral tribunal whilst taking into consideration the rights of the Entitled Persons, in a multiparty setting (Article 3);
• ensure that potentially applicable mandatory provisions stemming from the law at the deceased's last domicile are not circumvented, the application of Article 35 of the Swiss Rules (governing the applicable substantive law) to estate matters being explicitly excluded (Article 4). For instance, while a testator with last domicile in Switzerland may elect the law of one of his/her citizenship to govern the estate, Swiss citizens cannot derogate from the provisions of Swiss law on the freely disposable portion, including Swiss forced heirship rules (Art. 91(1) of the Swiss Private International Law Act).

Moreover, the TEF Rules provide for several useful model arbitration clauses. Each model clause is tailored to the specific Instrument (last will, inheritance contract, trust deed, statutes of a foundation) in which it will be contained, and the Explanatory Note provides helpful guidance with drafting techniques.

Practical implications of the TEF Rules

• No other arbitration rules provide for a specific framework for the resolution of TEF Disputes. This reinforces the prominence and toolkit approach of the Swiss Rules as supplemented by other sets of rules, such as for resolving corporate law disputes, adding to the attractiveness of Switzerland as an arbitration-friendly jurisdiction to help parties resolve their disputes by arbitration.
• A major advantage of settling TEF Disputes by arbitration is the decreased risk of parallel proceedings in different countries, especially in light of the legal and practical complexities characterising estates with assets in various countries. The TEF Rules help to minimise conflicts of jurisdictions, without affecting the exclusive jurisdiction of certain courts (e.g. mandatory supervisory jurisdiction over trusts).
• Parties can designate arbitrators with relevant and extensive expertise in the field of their dispute. Arbitrators will generally be better equipped to handle those complex cases than state courts.
• The TEF Rules provide for a welcome innovation addressing the specific needs of Entitled Persons. Involving such Entitled Persons according to the TEF Rules will likely enhance the enforceability of arbitral awards adjudicating on TEF Disputes.
• TEF Disputes often involve sensitive personal or business information of the deceased, the heirs or their family businesses, which require utmost confidentiality, privacy and discretion. Resolving such disputes by arbitration will ensure that they remain confidential (enjoying the protection offered by Article 44 Swiss Rules) in contrast to state court proceedings which are in principle public.
• Arbitrating TEF Disputes will as a rule also ensure increased speed as compared to state court proceedings (in particular by avoiding time-consuming appeals) and the arbitration proceedings can be tailored to the parties' needs (e.g. by choosing the language of the proceedings).
• The grounds to challenge arbitral awards are quite limited. This ensures more legal certainty for parties who choose to submit TEF Disputes to arbitration.
• The launch of these innovative TEF Rules will no doubt increase the number of private client arbitrations in the years to come.

Thanks to our extensive expertise in both arbitration and private client matters, we are well placed to assist you in case of any questions.

Legal Note: The information contained in this Smart Insight is of general nature and does not constitute legal advice.