SWITZERLAND Law and Practice Contributed by: Alexander Vogel, Marc Baumberger and Selina Bruderer, MLL Legal
• tag-along rights – these allow the minority share - holder to sell its stake on the same terms if the majority sells its shares; • drag-along rights – while typically protecting the majority, drag-along provisions can be balanced to ensure that minority shareholders participate in exit scenarios; and • information rights – contractual rights to receive periodic reports, financial statements or other relevant information beyond statutory disclosure requirements. These tools are especially important in international JVs, where parties may come from different legal cul - tures and rely heavily on the contract to define govern - ance and protections. 6.8 Applicable Law and Dispute Resolution in International JVs Governing Law and Jurisdiction In international JVs involving a Swiss party or Swiss JV vehicle, the choice of substantive and procedural law is a critical element of the JV agreement. Par - ties are generally free to choose the governing law and dispute resolution forum. Swiss law is frequently selected due to its neutrality, predictability and busi - ness-friendly environment. When the JV vehicle is incorporated in Switzerland, it is common for the parties to choose Swiss substan - tive law to ensure alignment with the applicable cor - porate and regulatory framework. However, in inter - national JVs, one of the parties’ home laws may also be selected as a compromise, especially when the vehicle is not incorporated in Switzerland. Dispute Resolution Forums Disputes arising from JV agreements are typically resolved through either: • state courts, often in Switzerland, if the JV has strong ties to the country; or • arbitration, which is preferred in many cross-border JVs for its confidentiality, neutrality and interna - tional enforceability. Switzerland is a widely accepted venue for interna - tional arbitration, and many JV agreements provide
for arbitration under the Swiss Rules of International Arbitration or other institutional rules (eg, ICC, LCIA). Consequences of Failing to Agree on Procedural Law If the parties fail to agree on a governing law or dis - pute resolution forum, the applicable law will be deter - mined by conflict of law rules (eg, the Swiss Federal Act on Private International Law). This can lead to uncertainty and increase the complexity and cost of dispute resolution. Similarly, in the absence of a clear forum, jurisdictional disputes may arise, delaying Swiss law does not impose mandatory alternative dispute resolution (ADR) mechanisms for commercial disputes. However, ADR clauses – such as mediation or escalation procedures – can be freely agreed upon by the parties in the JV agreement. International Treaties and Enforcement Switzerland is a signatory to several important inter - national treaties governing dispute resolution. Enforcement in Switzerland enforcement and litigation. Mandatory ADR Procedures Foreign judgments are enforceable in Switzerland if issued by a competent court and subject to reci - procity, public policy and procedural fairness stand - ards. Foreign arbitral awards are readily enforceable under the New York Convention, and Swiss courts are known for their arbitration-friendly stance and limited grounds for refusing enforcement. In a Swiss corporate JV, the board of directors is typically structured to reflect the relative owner - ship or strategic interests of the JV participants. The shareholders’ agreement or the investment agree - ment between the shareholders, which acts as the JV agreement, commonly includes provisions on the appointment and removal of directors, including the designation of the chairperson and vice-chairperson, quorum requirements and whether the chairperson holds a casting vote in the event of a tie. These provi - 7. The JV Board 7.1 Board Structure
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