Interesting new SFT Judgment related to Swiss Banking Law (Complaints Clauses)
On 28 July 2020, the Swiss Federal Tribunal (SFT) not only published the new precedent 4A_9/2020, but also a further new judgment that deals with the topic of disputed client instructions given to a Swiss financial institution. This other judgment 4A_161/2020 dated 6 July 2020, albeit not marked by the SFT as a new precedent, is, in my opinion, also interesting and noteworthy.
In a very compressed fashion, the dispute that was at the basis of the new SFT judgment 4A_161/2020 resulted from instructions given to a Swiss bank, which pursuant to the bank customer were fraudulent and which the bank, having acted with the required degree of diligence, should have detected as being fraudulent. Interestingly, in the relevant case, it had been retained by the courts that the bank had indeed acted with gross negligence when it carried out the relevant instructions. However, the lower instance as well as the SFT upheld the bank’s line of defense that the customer, whose attorney had received all relevant bank statements documenting the disputed transactions, failed to contest such transactions within the agreed time frame (30 days after reception of the relevant statements, pursuant to the complaints clause contained in the bank’s general terms and conditions).
In the judgment 4A_161/2020, the SFT confirms, in particular, that if a bank customer failed to observe an agreed complaints clause, i.e., did not complain within the agreed time frame (usually 30 days) against the bank statement (debit note) received by him/her and/or his/her representative, the disputed transaction documented in the bank statement (debit note) is deemed to have been accepted by the customer, even if the bank acted in a grossly negligent fashion in connection with such transaction. Differently put, the customer’s mentioned omission to remonstrate against the disputed transaction within the agreed time frame following reception of the corresponding debit note constitutes a violation of the customer’s contractual duties vis-à-vis the financial institution, which, non-technically speaking, moves the financial institution’s (gross) negligence into the background.
In the words of the SFT (see consideration 5.2.2 of 4A_161/2020; emphasis added):
“Il y a toutefois lieu d’admettre que, lorsque les avis de débit en relation avec les ordres frauduleux, les relevés de compte et les états des avoirs ont été communiqués au client par la voie ordinaire (et non en banque restante) et qu’il ne s’y est pas opposé dans le délai convenu, il est censé les avoir approuvés. Lorsque le client convient avec la banque que la correspondance bancaire doit être adressée à un représentant désigné par lui, les communications faites à ce représentant, qui est l’auxiliaire du client (art. 101 CO), sont réputées notifiées à celui-ci et, partant, faute de contestation par le représentant, sont réputées approuvées. Dans une telle situation, la faute concomitante du client interrompt le rapport de causalité entre la faute grave de la banque et le dommage subi par le client.”
See further consideration 5.3 of 4A_161/2020 (emphasis added):
“En l’espèce, avec les premiers juges, la cour cantonale a jugé que la banque avait commis une faute grave dans la vérification des ordres de virement litigieux. Elle a considéré toutefois que la clause de réclamation figurant à l’art. 11 des [conditions générales ; CG] était valable et que, puisque toute la correspondance bancaire – avis de débit, avis de retrait, états des avoirs et relevés des comptes – concernant les montants litigieux avait bien été adressée à Me F.________, que celui-ci était doté du pouvoir de signature individuel sur les comptes litigieux, qu’il agissait en tant que représentant de la cliente, respectivement de son ayant droit économique et qu’il n’avait pas contesté ces opérations, la cliente était réputée les avoir reconnues et approuvées en vertu de l’art. 11 des CG. Cette appréciation ne peut qu’être confirmée.”
And also consideration 5.4.4 of 4A_161/2020:
“Contrairement à ce que croit la [cliente bancaire], le fait de ne pas consulter les avis de débit reçus et de ne pas réagir à des opérations non voulues est une violation contractuelle.”
This new SFT judgment stresses the importance of the customer’s responsibility to diligently examine all statements received by his or her Swiss financial institution and to, if necessary, lodge a formal complaint with the institution in the applicable time frame to duly reject the relevant transaction(s) and corresponding statement(s), to avoid the negative consequences from the violation of a complaints clause summarized above. From another perspective, the judgment 4A_161/2020 confirms the validity of the standard contractual complaints clauses used by Swiss financial institutions. If and when customers or their representatives actually receive financial statements (i.e., did not agree on a hold-mail solution with the financial institutions, which is governed by different legal principles), the financial institution issuing such statements, particularly debit notes, may rely on them once the relevant notification period has lapsed.
Philipp H. Haberbeck, Zurich, 30 July 2020 (www.haberbeck.ch)
The information contained in this article is for general informational purposes only and is not intended to constitute legal advice. Readers of this article should not take any actions or decisions without seeking specific legal advice. Any mandate is subject to the full execution of an engagement letter.
Rechtsgebiete: Bank- und Finanzmarktrecht