SWITZERLAND Law and Practice Contributed by: Yves Klein and Antonia Mottironi, Monfrini Bitton Klein and Ardenter Law
3.3 Shareholders’ Claims Against Fraudulent Directors Article 754, paragraph 1, SCO provides that the mem - bers of the board of directors and all persons engaged in the business management or liquidation of the company are liable both to the company and to the individual shareholders and creditors for any losses or damage arising from any intentional or negligent breach of their duties. Outside of bankruptcy (namely as long as the com - pany is solvent), in addition to the company, the indi - vidual shareholders are also entitled to sue for any losses caused to the company. The shareholder’s claim is for performance to the company (Article 756, paragraph 1, SCO). In the event of the bankruptcy of the damaged com - pany, its creditors are also entitled to request that the company be compensated for the losses suffered. However, in the first instance, the insolvency office holder may assert the claims of the shareholders and the company’s creditors (Article 757, paragraph 1, SCO). Subject to any assignment of claims to credi - tors (Article 757, paragraph 3, SCO), where the insol - vency office holder waives their right to assert such claims, any shareholder or creditor shall be entitled to bring them. The proceeds shall first be used to satisfy the claims of the litigant creditors. Any surplus shall be divided among the litigant shareholders in propor - tion to their equity participation in the company; the remainder shall be added to the insolvent’s estate (Article 757, paragraph 2, SCO). 4. Overseas Parties in Fraud Claims 4.1 Joining Overseas Parties to Fraud Claims The joining of parties in civil or criminal proceedings depends on their legal standing as provided for by Swiss law. Outside of mutual legal assistance in criminal and civil matters, Swiss courts and authorities do not exercise extraterritorial jurisdiction. In criminal proceedings, as mentioned in 2.5 Crimi- nal Redress , only individuals or legal entities whose
inadequate organisation (Article 102, paragraph 1, SPC); and • primary liability with regard to money laundering, organised crime and bribery independently of the criminal liability of individuals if a company did not take all the reasonable and necessary organisation - al measures to prevent such offences (Article 102, paragraph 2, SPC). 3.2 Claims Against Ultimate Beneficial Owners Swiss private law applies the principle of separate - ness of legal entities and good faith is presumed. Only the manifest abuse of a right is sanctioned by law (Article 2, paragraph 2, SCC). Criminal findings of fraud may enable courts to moti - vate findings of bad faith but do not suffice to obtain the piercing of the corporate veil. The presence of anti-money laundering forms in bank - ing documentation identifying a legal or natural person as the ultimate beneficial owner of a bank account is not sufficient to demonstrate a manifest abuse of rights. However, according to the principle of transparency, the formal existence of two legally distinct persons cannot be accepted without reservation when all or almost all of the assets of a company belong either directly or through intermediaries to the same per - son, whether natural or legal. The claimant must demonstrate that despite the legal duality of persons, there are not two independent entities, the company being a mere instrument in the hand of its author, who together form a single economical unit. In accordance with economic reality, there is an identity of persons whenever the fact of invoking the diversity of sub - jects constitutes an abuse of rights or has the effect of manifestly prejudicing legitimate interests. In criminal proceedings, forfeiture of assets (that may then be allocated to the plaintiff) is not permitted if a third party has acquired the assets in ignorance of the grounds for forfeiture, provided they have paid adequate consideration therefor or forfeiture would cause them to endure disproportionate hardship (Arti - cle 70, paragraph 2, SPC).
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