The Swiss Arbitration Centre has announced new Supplemental Swiss Rules for Trust, Estate and Foundation Disputes (so-called "TEF Rules"). The TEF Rules are set to enter into force on 1 July 2025 and will be available in English, German, French and Italian, accompanied by an Explanatory Note in each of these four languages. They offer a modern and practical framework for resolving private wealth disputes through arbitration, specifically designed to address the specificities and particular complexities of trust, estate and foundation matters.

Overview and Key Features

The TEF Rules come at a time when arbitration is increasingly being used to resolve private wealth disputes, a trend supported in Switzerland by the 2021 amendments to the Swiss Civil Procedure Code (CPC) and the Swiss Private International Law Act (PILA). These amendments confirm that arbitration clauses in unilateral legal instruments such as wills, trust deeds and foundation statutes are in principle valid under Swiss law, provided the seat of arbitration is chosen to be in Switzerland. This development allows testators, settlors and founders to ensure disputes are dealt with confidentially and efficiently, even where assets or parties are spread across different countries.

The TEF Rules will supplement the Swiss Rules of International Arbitration and mainly apply in three situations: where an arbitration clause in a unilateral legal instrument refers to the Swiss Rules; where an arbitration agreement specifically refers to the TEF Rules or their predecessor rules; or where parties expressly agree to arbitrate under the TEF Rules. The rules cover the notification and representation of all persons whose rights may be affected by the dispute ("Entitled Persons"), the constitution of the arbitral tribunal, and the applicable substantive law in estate matters. Parties are required to identify and notify all Entitled Persons, including unborn or incapacitated individuals, and to ensure their interests are properly represented. The rules also allow Entitled Persons to comment on the appointment of arbitrators, and the Arbitration Court of the Swiss Arbitration Centre may appoint some or all tribunal members where not all are represented.

In estate matters, the TEF Rules clarify that the applicable substantive law is determined by the conflict of law rules, reflecting the mandatory nature of many estate law provisions. The TEF Rules are accompanied by model arbitration clauses for inclusion in wills, inheritance contracts, trust deeds and foundation statutes, which help parties draft clear and enforceable arbitration agreements.

Why the TEF Rules Matter

The TEF Rules bring a number of practical benefits. They provide certainty and predictability in cross-border disputes, helping parties avoid parallel court proceedings and jurisdictional conflicts, which are especially common when assets or beneficiaries are located in multiple countries. The ability to tailor proceedings and select arbitrators with relevant expertise means that complex disputes are handled professionally and efficiently. Confidentiality, privacy and discretion is another important advantage, highly valued by families and high-net-worth individuals. Perhaps most importantly, the TEF Rules ensure that all persons affected by a dispute have their interests properly represented. This may prove crucial not only for the acceptance of any award rendered in the arbitration, but also for any potential enforcement in Switzerland and abroad.

Looking Ahead

With the TEF Rules entering into force, Switzerland is further cementing its position as a leading venue for resolving private wealth disputes. The rules offer a clear, efficient and confidential process tailored to the needs of families, fiduciaries and beneficiaries, and are expected to encourage greater use of arbitration in trust, estate and foundation matters.

Apart from actively shaping the future of this field with their work in the Swiss Arbitration Centre and within STEP, our private wealth and arbitration teams at Schellenberg Wittmer are already acting in a number of private wealth arbitrations and have developed significant expertise in this area. Our team is well-versed in the procedural and substantive issues unique to these disputes, both as counsel and as arbitrators. We expect the volume of private wealth arbitrations to grow steadily in the years ahead, and we remain committed to providing clients with expert advice and representation.

We will shortly publish a more detailed analysis of the TEF Rules in an upcoming Schellenberg Wittmer Newsletter, providing deeper insights into their application and guidance for their implementation.