Sanctions 2026

SWITZERLAND Law and Practice Contributed by: Philippe M. Reich, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG

of the offending person would require disproportion - ate investigative measures. 2.2.3 Civil Enforcement Action The authors are currently not aware of any case law in this jurisdiction relating to civil enforcement action concerning sanctions breaches. However, recent court decisions examine the effect of sanctions on the enforcement of judgments or arbitral awards, where the creditor or the debtor is subject to sanctions. Judgment of 13 March 2026 of the Swiss Federal Supreme Court (4A_305/2025) This judgment refers to the judgments of the High Court of the Canton of Aargau (Civil Court, 4th Cham - ber) of 24 January and 19 May 2025 (ZSU.2024.159; ZSU.2024.292). The case relates to an appeal against a decision upholding a seizure order for the enforce - ment of a final LCIA costs award. The appellant argued that payment of the debt had become legally impos - sible within the meaning of Article 119 of the Swiss Code of Obligations (CO), because no bank would process a payment to the respondent, an Angolan company that was deemed to be controlled by an entity listed in Annex 8 of the Ukraine Ordinance, with - out exposing itself to the prohibition on making funds available under Article 15 paragraph 2 of the Ukraine Ordinance. The element of control was established based on the fact that representatives of the listed entity sat on the respondent’s board of directors, and held key management positions within the respond - ent, as well as the fact that the listed entity held 41% of the respondent’s shares. The High Court examined whether the payment obli - gation arising from the arbitral award had become objectively impossible due to the sanctions imposed on the entity deemed to control the respondent, as defined in Article 119 CO. It upheld the appeal and concluded that there was no basis for the seizure. In Judgment 4A_305/2025 of 13 March 2026, the Swiss Federal Supreme Court dismissed the appeal against the High Court’s judgment of 19 May 2025, albeit on substituted grounds.

The respondent was found to be controlled by a sanctioned person within the meaning of Article 15 paragraph 1 lit. c of the Ukraine Ordinance. Accord - ingly, enforcement of the arbitral award would violate the Ukraine Ordinance. This applies irrespective of whether Swiss or foreign law governs the underlying claim, because the Ukraine Ordinance constitutes a mandatory provision of Swiss law within the meaning of Article 18 of the Federal Act on Private International Law and therefore applies regardless of the law oth - erwise governing the legal relationship (consideration 5.3.1.2). With regard to the legal fate of a claim held by a sanctioned creditor and pursued in debt enforce - ment proceedings, the Federal Supreme Court found that the prohibition on making funds available pre - vents the creditor, for the duration of the sanctions, from demanding payment. Since the debtor cannot be compelled, on pain of criminal penalties, to per - form a prohibited payment, the relevant claim must be regarded as deferred for as long as the sanctions remain in place. The Court considered this situation to be at least analogous to a statutory deferral, with the result that the limitation period is interrupted and default interest ceases to accrue during the period of deferral. Accordingly, where the requirements of Arti - cle 15 paragraph 2 of the Ukraine Ordinance are met, a legal stay of enforcement must be assumed within the meaning of Article 81of the Swiss Debt Enforce - ment and Bankruptcy Act (DEBA) (considerations 5.3.1.3, 5.3.2.1–5.3.2.3, 5.3.3 and 5.3.4). Judgment of 28 August 2025 of the Swiss Federal Supreme Court (5A_802/2024) The case concerned the enforcement of a foreign judgment and the decision of the debt enforcement office to attach and seize three bank accounts that had previously been blocked by SECO pursuant to Article 15 paragraph 1 of the Ukraine Ordinance. The court examined whether Article 44 DEBA applies by analogy to Ordinances issued under the EmbA. Article 44 DEBA provides as follows: “The realisation of items that have been seized under criminal or fiscal provisions... shall be carried out in accordance with the relevant federal or cantonal provisions”.

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