SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
is determined under Articles 132 et seq of the PILA, with Article 135 providing specific connecting factors for product liability claims. For contractual claims under insurance policies cover- ing AI-related losses, the governing law of the policy applies as agreed by the parties, subject to the appli- cable PILA rules and mandatory provisions. Regulatory Landscape and Outlook Switzerland has no comprehensive AI legislation com- parable to the EU AI Act, although a Swiss regula- tory framework is under development, in particular to implement the Council of Europe’s AI Convention. The revised EU Product Liability Directive, adopted in 2024 and expressly extending liability to software and AI systems, does not apply directly in Switzerland but may influence future developments in Swiss prod- uct liability law and coverage disputes under product liability and technology errors and omissions policies. Increased AI deployment is likely to create further dis- putes over aggregation and over when and where an insured event occurred for coverage purposes. 3. Arbitration in Insurance Disputes 3.1 Recognition of Arbitration Clauses Party Autonomy Switzerland has a very liberal international arbitration law. Swiss law broadly permits arbitration in insurance and reinsurance contracts. International arbitration is governed by Chapter 12 of the PILA; domestic arbi- tration by Part 3 of the Swiss Civil Procedure Code (CPC). Disputes arising from insurance and reinsur- ance contracts qualify as arbitral under Article 177 (1) of the PILA and Article 354 of the CPC. Article 178 (1) of the PILA requires an arbitration agreement in writing or another text-evidenced form, including correspondence or electronic messages; Article 358 of the CPC takes a similar approach. Validity and Referral Article 178 (2) of the PILA adopts the validation prin- ciple (in favorem validitatis): the arbitration clause is valid if it satisfies the law chosen by the parties, the law governing the subject matter of the dispute (in particular, the law governing the main contract), or
Swiss law. Swiss courts interpret this rule broadly. Where a valid clause exists, a Swiss court declines jurisdiction and refers the parties to arbitration under Article 7 of the PILA.
3.2 Enforcement of Arbitral Awards Domestic and Swiss-Seated Awards
An award rendered in Switzerland, whether under Part 3 of the CPC or Chapter 12 of the PILA, is directly enforceable in Switzerland in essentially the same way as a court judgment. A party normally seeks a confir- mation of enforceability from the competent cantonal court. Foreign Awards Switzerland has been a party to the New York Con- vention since 1965. Article 194 of the PILA directs the recognition and enforcement of foreign awards to that Convention, and Switzerland has made nei- ther a reciprocity nor a commercial reservation. The usual route is an exequatur application, meaning a request to the competent cantonal court to recognise the award for enforcement. In practice, recognition is also often sought incidentally in debt enforcement proceedings, where the award creditor may request definitive Rechtsöffnung under Article 81 (3) of the Debt Enforcement and Bankruptcy Act. Narrow Grounds for Refusal Article V of the New York Convention provides an exhaustive list of refusal grounds, applied restric- tively by Swiss courts. Automatic suspensive effect of a remedy in the state of origin is insufficient under Article V(1)(e); a judicial suspension order is required. 3.3 Practical Use of Arbitration in Insurance Matters Market Use Arbitration is regularly an option for high-value poli- cies, particularly international programmes or reinsur- ance contracts, but less common for standard domes- tic or consumer policies. It is particularly prevalent in reinsurance, FIPI, D&O, W&I, contractors’ and erec- tion all risks (CAR/EAR) and international liability pro- grammes, where large sums, technical evidence and several jurisdictions are involved. Arbitration clauses are often seen in the financial services sector.
230 I NSURANCE L I T IGATI O N 2026
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