Asset recovery update: can foreign receivers achieve indirect effects in Switzerland through corporate representation?

Background – A BVI receivership and Swiss bank accounts

The case concerned a British Virgin Islands (BVI) company holding bank accounts with a Swiss bank.

In the context of foreign litigation, the BVI court issued a worldwide freezing order and appointed receivers with extensive powers, including those to appoint and remove directors and conduct litigation on behalf of the company.

The receivers removed incumbent directors and appointed new ones, who subsequently exercised corporate powers to appoint additional directors under BVI law. One of these directors then instructed Swiss lawyers to bring proceedings in Switzerland against the bank, seeking account information, document disclosure and changes to the signature rights.

The Swiss bank challenged the claim, arguing in essence that the receivership order could not be recognised in Switzerland – and that, therefore, any downstream effects such as the appointment of directors should also be disregarded.

Key issue: can receivers indirectly act via corporate representatives?

The central question before the Swiss Supreme Court was whether the director, whose appointment occurred as a consequence of the receivership order, could represent the company in Switzerland without recognition of the underlying receivership order.

The Court rejected the bank’s arguments and confirmed the validity of the director’s actions.

1. No recognition of receivership required

The Supreme Court reaffirmed that a receivership order is not recognisable in Switzerland (in line with its earlier decision in 5A_999/2022). However, it drew a critical distinction: the claimant did not rely on the receivership order itself, but on the authority of a director elected under corporate rules and legislation.

2. Corporate representation governed by company law

As a matter of Swiss private international law, corporate representation is distinct from enforcement measures. So, even though the receivers had triggered the initial changes in the board composition, the subsequent corporate acts were legally autonomous and governed exclusively by the company’s corporate statute and legislation. The Supreme Court held that determining who is allowed to represent a company is governed by its corporate statute (Art. 154–155 Private International Law Act (PILA)), in this case, BVI law (lex societatis). Under BVI law, the director was validly appointed, entered in the register of directors, and therefore authorised to act on behalf of the company.

3. No impermissible circumvention of enforcement rules

The Supreme Court rejected the bank’s argument that the situation should be analysed through the lens of Swiss enforcement of foreign decisions or cross-border insolvency law (Art. 25 ff. and 166 ff. PILA), which would in this case prevent recognition of the receivership. It emphasised that the claim did not seek to enforce a foreign judgment or to repatriate assets for the benefit of creditors. Rather, it was limited to the exercise of the company’s own contractual rights; namely the right to obtain information, access documents and modify signatory arrangements for its Swiss bank accounts.

In this respect, the Supreme Court attached particular importance to the fact that:

• no final judgment on the merits existed that could be enforced;
• the receivers themselves had not been appointed to execute existing judgments;
• the claimant did not seek to transfer assets abroad; and
• the action was confined to preparatory or informational measures concerning the company banking relationship.

On that basis, the Court concluded that the proceedings could not be characterised as a form of foreign enforcement of judgment, whether direct or disguised. Instead, they remained within the sphere of private law by exercising contractual rights through corporate representation. The territorial limitations applicable to foreign enforcement measures did not therefore apply.

4. No violation of Swiss sovereignty (Art. 271 Swiss Criminal Code)

Importantly, the Court confirmed that the director’s conduct was not an act of a foreign sovereign on Swiss territory, but rather the exercise of private rights by a corporate organ.

Practical implications for asset recovery

This decision introduces an important clarification for cross-border asset recovery strategies involving Swiss assets.

While receivers cannot directly act in Switzerland and often cannot have the receivership order recognised, directors validly appointed under local law are entitled to act on the company’s behalf – even if their appointment results from the receivership. The decisive factor is that the representative acts in the name and for the account of the company itself, rather than as a foreign enforcement agent pursuing the interests of the company’s creditors.

This distinction is closely tied to the nature of the claim. Actions aimed at asserting contractual or informational rights of the company, such as requests for account information, disclosure of documents, or internal account management, may fall outside the scope of enforcement law and be admissible without prior recognition of foreign decisions.

The decision leaves open how Swiss courts would approach situations where a company, acting through such a validly-appointed director, seeks to go further and dispose of assets or transfer them abroad. Based on the Court’s reasoning, a distinction may arise between (i) acts carried out in the company’s interests (typically acts in the ordinary course of the company’s business) and (ii) measures that, in substance, amount to asset recovery or enforcement in favour of creditors. However, this boundary remains fact-sensitive and was not directly addressed by the Court.