Client secures about USD 32 million from major Swiss bank

In 2012, when the clients complained about poor performance of the portfolio, the bank replied – for the first time – that the figures were merely indicative. Further meetings ensued, resulting in the execution of a new credit facility agreement without reference to the minimum annual return of 5 per cent and an asset management agreement with a moderate risk profile authorising investments in products without capital protection.

The clients initiated proceedings before the Geneva First Instance Court in January 2018, claiming over USD 55 million on the following grounds:

• Unduly charged fees;
• underperformance of the investments below the 5 per cent return;
• loss of profits on investments not made; and
• loss of capital on investments sold.

The court upheld the claim in full. On appeal, the Geneva Court of Justice reduced the award to about USD 32 million, holding in particular that the clients had failed to substantiate all components of their alleged losses. Both parties appealed to the Swiss Supreme Court, which dismissed both appeals.

2. Legal reasoning

a. Capital guarantee and minimal return

The Supreme Court held that the bank could not rely on the “indicative” label – either in the document title or in small-print disclaimers – to disavow its commitment.

• The negotiations had focused specifically on the capital guarantee and the 5 per cent minimum return, which therefore formed an essential element of the agreement.
• Subsequent emails further confirmed the bank’s undertaking, and there was no evidence that later contracts replaced, rather than supplemented, the initial agreement.
• The court also noted that an asset management mandate with a moderate risk profile was not inconsistent with a guaranteed return over the entire portfolio.
• In particular, the mere reference to the possibility of investing in non-capital-protected products (e.g. shares and structured products) could not nullify the bank’s obligation to guarantee a 5 per cent return expressly undertaken after months of negotiations.

b. Scope of standard ratification clauses

The bank relied on the typical clause providing for tacit approval of account statements absent client’s objection within 30 days.

The Supreme Court rejected this argument. It emphasised that the bank had delivered documentation belatedly and in bulk, after repeated client requests and at a time when the clients had already raised performance concerns. Given the large volume of investments and the complexity of the documentation, a one-month deadline was unrealistic, particularly since only a detailed product analysis could have revealed whether the promised performance had been achieved (and the relevant benchmark of 5 per cent was annual).

The Court highlighted that, in an asset management relationship, clients are not expected to monitor every individual investment; doing so would exceed ordinary diligence and amount to duplicating the bank’s delegated duties, particularly where a result had been contractually guaranteed.

Against this background, deadlines set by standard ratification clauses must be applied flexibly and only where it is objectively feasible for the client to raise objections within the stipulated time. The bank’s reliance on the clause therefore amounted to an abuse of rights.

c. Duty to challenge damage calculation substantively and in detail

The Supreme Court also held that the bank failed to properly contest the claimants’ damage calculations. A blanket denial is insufficient; the degree of specificity required in a defence corresponds to the degree of detail in the opposing party’s allegations. The claimants had submitted comprehensive calculations supported by an expert report, which imposed a heightened duty on the bank to challenge them in detail. Instead, the bank merely raised general objections and vague references without concrete figures or evidence, which the court found inadequate.

The Supreme Court also rejected the client’s appeal regarding losses incurred from the sale of structured products before maturity, on the grounds that the client had failed to properly allege that these products offered full capital protection and to list the loss for each product.

3. Key takeaways for clients:

• Record negotiations thoroughly. Preserve drafts, annotated contracts, emails, meeting notes and written confirmations; such evidence may prevail over boilerplate disclaimers embedded in the fine print of the bank’s terms and conditions.
• Secure complete documentation. Ensure timely receipt and archiving of all banking documents, including successive versions of agreements and account statements. Missing or delayed delivery strengthens the client’s position.
• Raise objections in writing. Even where tacit approval clauses exist, formal complaints neutralise contractual deadlines and demonstrate diligence. In the above case, the clients expressed concerns via email regarding the methodology employed by the bank to calculate the loan, and reiterated the bank’s prior assurance of a 5 per cent guaranteed return; these emails ultimately weighed in their favour before the courts.
• Seek legal advice whenever a bank proposes changing the contractual banking relationship or signing documents. In practice, when an issue arises, banks often attempt to secure retrospective validation of the prior situation by having the client enter into a new agreement or sign asset statements.
• Engage a specialised financial expert for the damages calculation. Clients must submit a detailed, evidence-based statement of claim that clearly establish the bank’s liability. To strengthen the claim, legal counsel should collaborate with a specialised financial expert capable of producing a comprehensive expert report. Such a report should include precise loss calculations and technical analysis, thereby reducing the risk of dismissal for insufficient proof.

Reference: Swiss Federal Supreme Court 4A_361/2024, 4A_363/2024, 18 June 2025