Launch of the Trust, Estate and Foundation (TEF) Rules of the Swiss Arbitration Centre (SAC) – A New Era for Private-Wealth Arbitration

A Tailored Framework for Trust, Estate and Foundation Disputes

The Swiss Arbitration Centre (SAC) has just launched the Supplemental Swiss Rules for Trust, Estate and Foundation Disputes (TEF Rules), which will enter into force on 1 July 2025. These rules represent a landmark development in the arbitration of private-wealth disputes, offering a bespoke procedural framework that complements the Swiss Rules of International Arbitration.

The TEF Rules are designed to address the unique procedural and substantive challenges that arise in disputes involving trusts, estates and foundations—areas where traditional commercial arbitration rules may often fall short.

With this new addition to its set of rules, the SAC further enhances its status as a well-known hub for arbitration and demonstrates its agility in providing a tailored framework for specific disputes.

The Added Value of the TEF Rules

Private-wealth disputes are increasingly international, complex and sensitive. They often involve:

• Multiple jurisdictions and conflicting legal systems.
• Unilateral legal instruments such as wills, trust deeds or foundation statutes.
• Numerous parties, including heirs, beneficiaries, trustees and protectors.
• Confidentiality concerns and the need for specialised expertise.

Arbitration responds to these challenges by providing a streamlined, confidential and expert-driven process. While Swiss law already expressly recognises the validity of arbitration clauses in unilateral legal instruments under both the Swiss Civil Procedure Code (CPC) (Art. 358 (2) CPC) and Chapter 12 of the Swiss Private International Law Act (PILA) (Art. 178 (4) PILA) since 2021, the TEF Rules now complement this possibility with dedicated provisions dealing with the peculiarities of such disputes, offering a tailor-made mechanism to ensure efficiency when arbitrating TEF disputes. Referring such disputes to arbitration prevents multiple legal cases in various regions, minimises conflicting and unenforceable decisions, and improves the efficiency of dispute resolution.

Key Features of the TEF Rules

1. Scope and Applicability
The TEF Rules apply to disputes arising out of or in connection with trusts, estates and foundations, whether the arbitration clause is found in a contract or a unilateral instrument. The TEF Rules shall apply to such arbitration proceedings governed by the Swiss Rules initiated on or after 1 July 2025, unless otherwise agreed by the parties.

2. Notification and Representation
The rules provide clear guidance on the scope of the affected persons that need to be encompassed as parties to the arbitration (referred to as "Entitled Persons"), their information rights and how they may be represented in the proceedings—ensuring procedural fairness, and securing the interests of the non-signatories of the arbitration clause in the dispute.

3. Constitution of the Arbitral Tribunal
Special provisions govern the appointment of arbitrators taking into account the peculiarities related to appointment of the arbitrators in multiparty disputes.

Looking Ahead
The TEF Rules further implement the recent changes in Swiss law that allow including arbitration clauses in unilateral acts, which is of particular relevance within the context of wealth and estate planning. By enhancing the possibility to use arbitration for disputes arising out of unilateral acts, Swiss arbitration law, together with the TEF Rules, offer a tailored framework, which:

• Reduces the burden of multi-jurisdictional litigation.
• Offers a neutral and confidential forum.
• Enhances efficiency and enforceability of outcomes.

Legal practitioners, trustees, estate planners and private clients are encouraged to review the TEF Rules and consider incorporating arbitration as the elected dispute resolution mechanism in a will, inheritance contract, trust deed or foundation by-laws. The incorporation of arbitration clauses in such documents does, however, call for a case-by-case assessment as there is no "one size fits all" clause.

Resources and Further Reading