Can a Swiss bank sue a foreign client concerning a current account contract in Switzerland based on a jurisdiction clause?
Is a current account contract between a Swiss bank and a foreign client to be considered as a consumer related dispute?
And if yes, is this enough to have a right for being sued as consumer at your domicile?
Is there still room for foreign bank clients and consumers to escape the jurisdiction clauses of the Swiss banks?
A French citizen domiciled in France entered into a contractual relationship with a Swiss bank domiciled in Geneva and the parties agreed on Geneva as the place of jurisdiction.
The bank brought a claim against the client for the overdrawn amount on his current account with the bank. The claim was filed in the court of Geneva based on article 23 of the Lugano Convention.
The client contested the jurisdiction of the Geneva court by arguing that he considers the relationship with the bank to be a consumer relationship and that therefore the bank should have sued him at his domicile in France according to article 16 of the Lugano Convention. He argued that the jurisdiction clause in the contract did not meet the conditions of article 17 of the Lugano Convention and was therefore not valid.
The Swiss Federal Supreme Court considered whether the complex conditions of article 15 paragraph 1 lit. c Lugano Convention were met. The court took into account that there is a matter relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession. Hence, the client of the bank was considered a consumer in a first step.
The court then went on to consider if the second condition of article 15 paragraph 1 lit. c Lugano Convention was also met, namely whether the fact that the bank pursued commercial or professional activities in the state of the consumer or by any means, directs such activities to that state or to several states including that state and the contract falls within the scope of such activities.
The court considered that the bank was doing business in France with affiliated companies and different branches in France. However, there was no proof that any of these affiliated companies or branches of the bank in France did contribute in any way to the contractual relationship between the consumer and the Geneva bank. It was the consumer himself who had entered into contact with the bank in Geneva. Hence, the Swiss Federal Supreme Court decided that the contractual relationship did not meet the requirement of commercial activities of the bank in France according to article 15 paragraph 1 lit. c Lugano Convention.
Thereafter the Court examined whether the commercial activities of the bank in Geneva were directed towards France, the state of the consumer. The Court asserted that there is no proof that the bank had advertised or undertaken acquisition activities in order to especially direct its services to consumers with a domicile outside of Switzerland, especially in France, to encourage them to contact the Geneva bank. Furthermore, the court noted that it is well known that Swiss banks have a strong reputation outside of Switzerland, since Swiss banks for a long period of time have been able to offer special guarantees of stability, security and discretion and that banks have entered into a lot of contracts with consumers living outside of Switzerland. The court considered this a characteristic trait of this sector of the Swiss economy. But according to the Swiss Federal Supreme Court, one cannot from this advantageous position in the international economy alone conclude that the Swiss banks do direct their activities to other states in the sense of article 15 paragraph 1 lit. c Lugano Convention. Given this, and even though the bank in question occupied a position in the forefront of the Swiss banking sector, this is not enough to conclude that the bank did direct its commercial activities towards France and other states.
Apart from that the Court considered that the consumer living in France but very near to Geneva is to be considered a cross-border commuter that does not need special protection, which seems to be proven for the Court by the fact that this specific consumer had already sued this Swiss bank in Geneva in another matter some years ago.
For all of these reasons, the Swiss Federal Supreme Court ruled that the jurisdiction clause entered into between the Swiss bank and the French consumer was valid and the bank did not have to sue the consumer in France.
The decision is protecting the Swiss banks in this case. It is surprising that the decision does not mention the issue of the relevance of the website of the bank, which would have been a very interesting point. It is clear that all Swiss banks who do occupy a position in the forefront of the Swiss banking sector do clearly direct their services, especially on their websites, also to customers in other states.
Anyhow, even with this decision, it is also clear that there is still enough room for consumers that are sued by Swiss banks to argue that they should escape the jurisdiction clause of the bank.
Photo Credit: Bger.ch