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Jean Marguerat
Tomás Navarro Blakemore
Alexandre Fokiadès
Switzerland has long been a trusted centre for resolving private-wealth disputes thanks to its political stability and financial infrastructure. The alpine country has also and continues to be a preferred jurisdiction for high-net-worth individuals to establish residence thanks to the very attractive tax regime of some Swiss cantons (with the so-called lump-sum taxation).
With the introduction in 2025 by the Swiss Arbitration Centre (Centre) of the Supplemental Swiss Rules for Trust, Estate and Foundation Disputes (TEF Rules), Switzerland is setting a tailor-made framework and a new standard for clarity and efficiency in the arbitration of trust, estate, and foundation disputes. They are designed to address the unique challenges that arise in such disputes which often involve multiple parties, complex and cross-border asset structures, and sensitive family dynamics.
Arbitration clauses in wills and trusts are increasingly recognised worldwide, with countries like the US, Bahamas, Guernsey, Dubai, and Malta enacting supportive laws. In 2021, Switzerland joined this trend by expressly validating in its legislation arbitration clauses in unilateral instruments – such as wills, trust deeds and foundation statutes – provided the seat of the arbitral tribunal is in Switzerland[1]. Moreover, as most trust jurisdictions are members of the New York Convention of 1958 (NYC) and as they have not used the reservation according to which they shall only apply the NYC to commercial disputes (the so-called commercial reservation), arbitral awards in trust, estate, and foundation matters will benefit from the recognition and enforcement advantages under the NYC.
What Are the TEF Rules?
The TEF Rules, effective since 1 July 2025, are a specialised add-on to the Swiss Rules of International Arbitration (Swiss Rules)[2]. They therefore supplement the Swiss Rules with a limited set of four (4) provisions that take into consideration the specificities of private-wealth disputes, ensuring efficient arbitration proceedings.
When Do the TEF Rules Apply?
The TEF Rules come into play automatically when an arbitration clause in a unilateral legal instrument such as a will, trust deed or foundation statutes, refers to the Swiss Rules. They also apply if the arbitration clause specifically mentions the TEF Rules or if all parties agree to use them after a dispute arises. Importantly, while the TEF Rules provide a tailor-made framework for such type of disputes, they do not contain provisions governing the formal or substantive validity of unilateral arbitration clauses or the arbitrability of such disputes, which remains subject to the applicable law.
A practical example of application of the TEF Rules would be a testator inserting an arbitration clause in his or her will, requiring that any disputes arising from the will – whether among heirs, legatees, or the executor – be resolved through arbitration in accordance with the Swiss Rules. Yet, some uncertainties still remain in relation to disinherited legal heirs in the event they wish to enforce their forced heirship rights.
In the context of a trust, the trust deed may include an arbitration clause covering disputes such as those between multiple trustees, between trustees and protectors, among beneficiaries, or between trustees and/or protectors and beneficiaries.
Key Features of the TEF Rules
Clear Model Clauses
The TEF Rules offer practical, ready-to-use arbitration clauses for different scenarios – wills, inheritance contracts, trust deeds, and foundation statutes. It is noteworthy that the arbitration clauses for trusts and foundations ensure that beneficiaries are bound by the arbitration clause simply by accepting a benefit, and allow the trustee/foundation to ask for written confirmation from beneficiaries (with refusal of confirmation treated as a waiver of the benefit).
Protecting “Entitled Persons”
A cornerstone of the TEF Rules is the protection of all “Entitled Persons” – anyone whose rights might be affected by the dispute, including minors and unborn beneficiaries. Parties are required to identify and notify these individuals, and to ensure that they will be represented if needed, in accordance with mandatory applicable law. This approach not only ensures fairness but also strengthens the enforceability of arbitral awards internationally.
Fair Appointment of Arbitrators
The TEF Rules introduce safeguards in relation to the appointment of arbitrators in complex, multi-party disputes. Entitled Persons have the right to comment on the selection of arbitrators, even if they do not formally join the proceedings. If not all Entitled Persons are represented, the Centre can step in to appoint some or all arbitrators, ensuring the process remains balanced and credible.
Substantive Law for Estate Matters
The TEF Rules introduce a critical exception for estate disputes: unlike the standard arbitration principle under Article 35 of the Swiss Rules[3], parties cannot freely choose the applicable law.
Instead, arbitral tribunals must apply the conflict-of-law rules at the deceased’s last domicile preventing any circumvention of mandatory policies. For instance, under Swiss law, a choice-of-law clause in a will is treated as a conflict-of-law reference that must be observed ex officio, even if heirs prefer the application of a different law to the estate. Furthermore, the testator’s freedom is not unlimited – it is restricted to choosing between Swiss law and the law of nationality – and if the testator is a Swiss national with multiple nationalities, Swiss forced heirship provisions remain applicable[4].
Conversely, Article 35 of the Swiss Rules continues to apply to trust and foundation matters.
Why Do the TEF Rules Matter?
Predictability and Efficiency
The TEF Rules minimise the risk of parallel court proceedings and jurisdictional conflicts, particularly in cases involving assets or parties across multiple countries. Arbitration under these rules thus streamlines complex, multi-jurisdictional disputes and strives to deliver clear and enforceable awards, which can be challenged under very limited circumstances in Switzerland and usually enforced globally by means of the NYC.
Confidentiality
The process remains confidential, which is crucial for families and individuals concerned about sensitive financial or personal matters. This also benefits trustees, who may face significant reputational risks from public court proceedings.
Expertise and Flexibility
Parties can select arbitrators with specialised knowledge in private-wealth and cross-border disputes, ensuring informed and accurate decisions, and jointly agree on procedural rules, including language, location, and schedule.
Practical Tips
Arbitration Clause Setup
Use the model arbitration clauses provided in the TEF Rules to avoid any potential dispute on the interpretation of the arbitration clause itself.
Party Identification
Clearly identify who is bound by the arbitration clause, especially in cases where forced heirs or substitute beneficiaries may be involved.
Anticipate representation for minors, unborn, or incapacitated persons; consider adding a representation clause in trust deeds.
Choice of Law
Ensure any choice-of-law is valid and not abusive under the law of the deceased’s last domicile.
Arbitrability & Public Policy
Assess arbitrability of subject matter and evaluate risks from public policy like forced-heirship rules.
Jurisdiction & Enforcement
Identify relevant jurisdictions of assets and parties and check if the commercial reservation under the NYC applies.
Process & Records
Establish clear notification processes and keep detailed records of consent and participation.
Final Thoughts
The TEF Rules represent a significant step forward for Swiss arbitration in the private-wealth sector. They offer families and practitioners a tailor-made tool for resolving even the most complex trust, estate, and foundation disputes in a more flexible, efficient, predictable and confidential manner.
At MLL Legal, we combine a private client team which has a wealth of experience in providing legal advice in trust, estate and foundation matters, as well as established international arbitration practitioners who have already acted in private-wealth arbitrations. Therefore, if you are interested in inserting an arbitration clause in a will, an inheritance contract, a trust deed or in the statutes of a foundation, please contact our dedicated team – we would be glad to assist you.
[1] See Article 358(2) of the Swiss Civil Procedure Code (CPC) and Article 178(4) of the Private International Law Act (PILA).
[4] See Article 91(1) PILA and our previous newsletter: https://www.mll-news.com/new-international-succession-law-one-step-forward-one-step-back-effective-as-of-1-january-2025/?lang=en
