Important victory before the Swiss Federal Supreme Court in US sanctions-related case

Lenz & Staehelin successfully represented Bank Julius Baer & Co. AG Ltd. in appeal proceedings before the Swiss Federal Supreme Court. The appeal was brought by a customer of the bank, a Panama based company whose ultimate beneficial owner is a well known Russian businessman. When the latter became a target of US sanctions, a dispute arose about whether the bank has the right to refuse execution of certain transactions that would violate US sanctions law. In the first instance, all claims brought by the bank's customer before the Zurich Commercial Court were dismissed in their entirety. In its decision of November 2020, the Zurich Commercial Court found that the bank was not only contractually entitled, but also expected to refuse execution of the relevant transaction under Swiss banking supervisory law. In its decision of 6 August 2021, the Supreme Court fully confirmed the bank's contractual right to reject execution of the transaction based on a provision included in the general business terms. As a result, the Supreme Court did not have to address the impact of US sanctions on Swiss banking supervisory law.

The Lenz & Staehelin team advising Bank Julius Baer & Co. AG consisted of partner Harold Frey and associate Severin Christen (both Dispute Resolution).

The full decisions can be obtained here:

Judgment of the Swiss Federal Supreme Court

Judgment of the Zurich Commercial Court

Published: 13 September 2021