Switzerland: Shipping Comparative Guide

1 Legal framework

1.1 Which legislative and regulatory provisions govern the shipping sector in your jurisdiction?

In Switzerland, the primary legislation governing shipping matters is the Merchant Shipping Act of 23 September 1953 (SR 747.30). The Merchant Shipping Act comprises nine books that deal with the following matters:

• basic principles and competent authorities, including general principles on the courts' jurisdiction to hear an action in rem;
• ships sailing under the Swiss flag;
• the operation of maritime navigation, including regulations on shipowners, masters and their liabilities;
• crew, including employment matters and wages;
• contracts in connection with the operation of ships, including contracts of carriage and bills of lading;
• maritime casualties;
• underwater cultural heritage;
• the application of maritime regulation in inland navigation; and
• criminal and disciplinary sanctions

Article 1 of the Merchant Shipping Act sets out the basic principle that maritime navigation under the Swiss flag is subject to Swiss law, given that it is consistent with the principles of international law. Subsidiary legislation governs the particularities of specific matters in support of the primary legislation (eg, the registration of ships).

The (international) Swiss shipping industry is also regulated by various international conventions to which Switzerland is a signatory state or which have been incorporated into Swiss law (see question 1.2). By way of example, Switzerland is a signatory state to the International Convention for the Safety of Life at Sea of 1 November 1974.

1.2 Which bilateral and multilateral instruments on shipping have effect in your jurisdiction?

In Swiss private international law, the basic principle applies that enacted international conventions prevail over regulations in national law. This rule is also reflected in Article 1(2) of the Private International Law Act of 18 December 1987.

Switzerland is a signatory to numerous multilateral international conventions, such as:

• the Geneva Convention on the High Seas of 29 April 1958;
• the United Nations Convention on the Law of the Sea of 10 December 1982;
• the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea of 13 December 1974;
• the Convention on Limitation of Liability for Maritime Claims of 19 November 1976;
• the International Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels of 23 September 1910;
• the International Convention on Certain Rules concerning Civil Jurisdiction in Matters of Collision and the International Convention for the Unification of certain Rules relating to Penal Jurisdiction in Matters of Collision or other Incidents of Navigation, both of 10 May 1952;
• the Convention on the International Regulations for Preventing Collisions at Sea of 20 October 1972;
• the International Convention on Civil Liability for Oil Pollution Damage of 29 November 1969;
• the International Convention on Civil Liability for Bunker Oil Pollution Damage of 23 March 2001;
• the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage of 27 November 1992;
• the Convention for the Unification of Certain Rules of Law respecting Assistance and Salvage at Sea of 23 September 1910;
• the International Convention on Salvage of 28 April 1989;
• the Nairobi International Convention on the Removal of Wrecks of 18 May 2007; and
• the Convention on the Protection of the Underwater Cultural Heritage of 2 November 2001.

Swiss law follows the so-called monistic system with regard to international conventions.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

Maritime navigation under the Swiss flag is under the overall supervision of the Federal Council. For the Swiss merchant fleet, however, the Federal Department of Foreign Affairs established the Swiss Maritime Navigation Office (SMNO), based in Basel, which has administrative, operational and technical supervision as the competent flag state and licensing authority for:

• seagoing Swiss merchant ships, their operators and crews; and
• recreational and leisure shipping under the Swiss flag at sea.

However, the Land Registry and Survey Office of the Canton of Basel-Stadt keeps the Swiss Register of Shipping, in which seagoing merchant ships are registered.

In addition, the SMNO represents Switzerland's interests in the field of international shipping before a number of international bodies dealing with shipping, including the International Maritime Organization in London.

1.4 What is the regulators' general approach in regulating the shipping sector?

Although Switzerland is a landlocked country, the world's seas and oceans play a significant role in its economy. As a country that is highly integrated in the global economy, Switzerland is dependent on global maritime transport. Switzerland has a significant maritime economic sector, especially in logistics.

At its meeting of 16 February 2022, the Federal Council mandated the Federal Department of Foreign Affairs to draw up a comprehensive maritime strategy. The Federal Council's aim in commissioning the maritime strategy is to provide a comprehensive overview of Switzerland's interests in the maritime sector, to enhance the coherence of its policy in this area and to ensure that the federal offices concerned coordinate their activities.

2 Registration

2.1 What types of vessels may be registered in your jurisdiction? What requirements and restrictions apply in this regard? Is dual registration permitted?

All types of vessels flying the Swiss flag may be registered. Swiss law, however, distinguishes seagoing vessels from inland water vessels – in particular, barges on the Rhine – and maintains dedicated registers for those different types of vessels.

Seagoing vessels are registered if they are used or intended for commercial carriage of goods or persons or for any other commercial activity at sea, as long as they also meet the statutory conditions of the Merchant Shipping Act regarding:

• ownership;
• financial resources;
• admission navigation;
• naming; and
• procedure.

Seagoing vessels flying the Swiss flag must also have the highest class of a classification society recognised by the Swiss Maritime Navigation Office (SMNO).

Dual registration as such is not permitted under Swiss law. Vessels that were previously registered abroad and are seeking registration in Switzerland must, in principle, produce documents showing that the registration in the foreign state has been cancelled.

However, the parties to a ship lease or charter may agree in their contract to notify their agreement to the ship's register. The agreement between the parties will then be recorded in the register.

2.2 What entities may register a vessel in your jurisdiction? What requirements and restrictions apply in this regard?

Public law corporations and institutions and private corporates and undertakings are equally entitled to register a vessel. However, Swiss law requires that natural or legal persons and corporates exercising control over the vessel as owner be Swiss citizens or have their registered office in Switzerland.

In addition, the capital of corporates exercising control over the vessel must at least cover 20% of the book value of the vessel; the purchase price qualifies as book value for new-build vessels. If the capital or funds, respectively, of the corporate decrease as a result of losses, they must not fall below 8% of the book value in the following five years.

2.3 What body administers the shipping register in your jurisdiction?

The sole port of registry for Swiss seagoing vessels is Basel. The Land Registry Office of the Canton of Basel-Stadt keeps the Swiss Register of Ships, in which seagoing merchant ships are registered. The SMNO, based in Basel, also keeps a separate register of seagoing Swiss yachts and small and coastal vessels.

2.4 What information is included in the shipping register? Is this publicly accessible?

The registered information is public. Information about the shipowners and the ship's registration date is freely available. The applicant for information must demonstrate a particular interest to obtain more detailed information, such as title of shipowners, liens and other attachments to the ship. The registry will provide information only in relation to the vessel; it will not provide information as to whether a particular person is the owner of a vessel.

2.5 What are the formal and documentary requirements for registration of a vessel? What is the process for registration? What is the effect of registration? What is the effect of deregistration?

The SMNO is the competent authority for the examination of the prerequisites for registration. Therefore, a seagoing vessel will be registered only once the Swiss Register of Ships has received the relevant certificates from the SMNO.

Registration requires, at minimum, the documentation of:

• the place and time of construction of the vessel;
• the identity of the constructor of the vessel;
• the construction materials used to construct the vessel;
• tonnage and/or volume certificates, including information on the vessel's dimensions (eg, length) and engine specifications;
• the name of the vessel;
• the identities of the owners (name, domicile and place of origin);
• the intended use (eg, seagoing or Rhine navigation); and
• any former registration (if applicable).

The registration has public effect. It is assumed by law that everybody knows the registration of the vessel. The same holds true for deregistration.

2.6 What are the formal and documentary requirements for registration of a shipping mortgage? What is the process for registration? What is the effect of registration? What is the effect of deregistration?

In principle, a shipping mortgage will be registered only if agreed by the owner and the creditor. However, in the event of a consensual transaction for the sale of the vessel, the Swiss Register of Ships will, at the request of the purchasing party and by publishing two public notices in the Swiss Official Gazette of Commerce, request the creditors (eg, the holders of claims secured by statutory lien without registration) to submit the declaration of mortgage.

3 Port state control

3.1 Which body is responsible for port state control? What powers does it have?

Switzerland does not maintain any centralised body of port state control. It is not a party to the Paris Memorandum of Understanding on Port State Control of 1982.

3.2 What penalties may be imposed for breach of the applicable laws and conventions?

N/A (see question 3.1).

3.3 Can decisions of the port state control authority be appealed? If so, what is the process for appeal?

N/A (see question 3.1).

4 Marine casualty

4.1 What key domestic and international provisions apply to marine casualties in your jurisdiction, and what specific considerations should be borne in mind with regard to the following? (a) Collisions; (b) Pollution; (c) Wreck removal; and (d) Salvage.

(a) Collisions

Switzerland has ratified the following conventions regarding maritime navigation:

• the International Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels of 23 September 1910;
• the International Convention on Certain Rules concerning Civil Jurisdiction in matters of Collision and the International Convention for the Unification of certain Rules relating to Penal Jurisdiction in matters of Collision or other Incidents of Navigation, both of 10 May 1952; and
• the Convention on the International Regulations for Preventing Collisions at Sea of 20 October 1972.

Regarding inland navigation, Switzerland has ratified the following conventions:

• the Convention Relating to the Unification of Certain Rules Concerning Collisions in Inland Navigation of 15 March 1960; and
• the 1988 Strasbourg Convention on Limitation of Liability in Inland Navigation, which Switzerland has signed but has not yet ratified.

(b) Pollution

Switzerland has ratified the following conventions:

• the International Convention for the Prevention of Pollution from Ships of 2 November 1973, including its 1978 Protocol;
• the International Convention for the Prevention of Pollution of the Sea by Oil of 12 May 1954;
• the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties of 29 November 1969 including its 1973 Protocol;
• the International Convention on Civil Liability for Oil Pollution Damage of 29 November 1969 including its 1976 and 1992 Protocols;
• the International Convention on Civil Liability for Bunker Oil Pollution Damage of 23 March 2001;
• the International Convention on the Control of Harmful Anti-Fouling Systems on Ships of 5 October 2001; and
• the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage of 27 November 1992.

(c) Wreck removal

Switzerland has ratified the Nairobi International Convention on the Removal of Wrecks of 18 May 2007.

(d) Salvage

Switzerland has ratified the following conventions:

• the Convention for the Unification of Certain Rules of Law respecting Assistance and Salvage at Sea of 23 September 1910; and
• the International Convention on Salvage of 28 April 1989.

In Switzerland, there is no mandatory form of salvage operations in place.

4.2 Which parties may bring a marine casualty claim in your jurisdiction, and against whom?

The parties that may bring a marine casualty claim are:

• the injured parties, including the heirs of the deceased victims; and
• any other party that has suffered damage for which it may claim damages as a result of the incident.

The claim is in principle made in personam against the shipowner.

4.3 What limitation of liability regime applies to marine casualty claims and who may avail of it? What types of claims may be limited?

Switzerland has ratified the Convention on Limitation of Liability for Maritime Claims of 19 November 1976 (LLMC). Swiss federal law limits the liability of shipowners, and that of the shipper and carrier, by applying the LLMC.

4.4 How is the limitation fund constituted? What requirements and restrictions apply in this regard?

Articles 45 and following of the Federal Ordinance on the Merchant Shipping Act (see question 1.1) sets out detailed regulation on the constitution of the limitation fund. Basically, the fund may be constituted by:

• a sum of money deposited with the competent cantonal authority; or
• a guarantee issued by a Swiss bank or insurance undertaking.

An independent procurator will give notice in writing to the claimants and take care of further administrative measures.

4.5 Under what circumstances is the limitation of liability unavailable?

Articles 3 and 4 of the LLMC apply in Swiss law.

4.6 What defences are available to marine operators in the event of a marine casualty claim?

Safety measures and precautions put in place by marine operators in accordance with the applicable regulations – such as measures to prevent loss of life, cargo or environmental damage – can serve as a defence for marine operators.

4.7 Which bodies are responsible for investigating and responding to marine casualties? What powers do they have?

The Swiss Transportation Safety Investigation Board has the authority to investigate the technical, operational, human and systemic causes of an incident involving a vessel flying the Swiss flag.

The criminal investigation, on the other hand, falls under the jurisdiction of the cantonal bodies of Basel-Stadt.

4.8 What reporting requirements apply in relation to marine casualties and what are the consequences of non-compliance?

If an incident or any other adverse event occurs on a seagoing vessel flying the Swiss flag, the master of the vessel must prepare a report and submit it to the Swiss consulate or, in the absence of such consulate, to the competent local authority in the next port of call.

Where the incident may give rise to criminal acts or omissions, the master of the vessel must prepare a report – including interviews with the persons involved and supporting documentary evidence – and submit it to the competent authority.

4.9 What remedial measures may be ordered in the event of a marine casualty (eg, wreck removal, clean-up)?

Not applicable, as Switzerland is a landlocked country and does not maintain any government agency that carries out measures relating to marine casualties.

4.10 Who may conduct salvage operations in your jurisdiction and what other requirements and restrictions apply in this regard?

There are no mandatory rules in Swiss federal law on who may carry out salvage operations.

5 Cargo claims

5.1 What key domestic and international provisions apply to cargo claims in your jurisdiction?

Under Swiss law, the Hague-Visby Rules do not apply directly. However, they have been transposed into the Merchant Shipping Act (see question 1.1). The liability regime provided by the Merchant Shipping Act is, in principle, mandatory law in the event that a carriage document has been issued for the carriage of goods. According to Article 112 of the act, any document in which the carrier acknowledges receipt of determined goods for the carriage to the designated destination to hand them out to the entitled consignee qualifies as a carriage document.

With regard to inland navigation, the Budapest Convention on the Contract for the Carriage of Goods by Inland Waterways is applicable.

5.2 Which parties may bring a cargo claim in your jurisdiction, and against whom?

In principle, the bill of lading, the terms in the contract of carriage and the underlying contract (eg, sales contract for the goods) determine who may bring a claim related to the cargo.

5.3 What limitation of liability regime applies to cargo claims and who may avail of it? What types of claims may be limited? What is the procedure for limiting liability?

According to Article 103(1) of the Merchant Shipping Act, the carrier is liable for total or partial loss, destruction and delay from the time of receipt until delivery. In the event of total loss, the liability is for the total value of the goods according to Article 105(1). In the event of partial loss, damage or delay, the liability is for the impairment of value according to Article 105(2). However, the carrier's liability is also limited according to Article 105(3), which refers to Article 44 of the Federal Ordinance on the Merchant Shipping Act, which reads as follows:

Reading Article 105(3) of the Merchant Shipping Act and Article 44 of the ordinance together, the carrier's liability is limited to the amount that is higher by applying the limits set forth with the ordinance.

Article 105(5) of the Merchant Shipping Act further provides that where a container, pallet or similar transport device is used to consolidate the goods, each piece and transport unit declared in the bill of lading as being contained in or on such device shall be deemed to be a single piece or transport unit. In all other cases, the whole device shall be deemed to be a piece or transport unit.

5.4 Under what circumstances is the limitation of liability unavailable?

According to Article 105(a) of the Merchant Shipping Act, neither the carrier nor its auxiliaries may invoke the aforementioned limitations if it is proved that they caused the loss or damage by an act or omission with intent or recklessly and with awareness that damages would likely result.

5.5 What defences are available to (a) carriers and (b) shipowners in the event of a cargo claim?

According to Article 104(2) of the Merchant Shipping Act, a carrier will not be liable for loss, destruction or delay if one of the following causes is proven:

• force majeure, accident, danger or incident on sea or other navigable waters;
• act of war, riot or public disturbance;
• a governmental measure such as sequestration, quarantine or other limitation;
• strike, lock-out or other work impediment;
• salvage or attempt to save life or property at sea or other justified deviation from the course of travel that does not constitute any violation of the contract of freight;
• an act or omission of the shipper, consignee or owner of the goods, its agents or representatives;
• shrinkage of volume or weight or other damage as a result of concealed defects of the goods;
• the inadequacy of the packaging or inadequacy or inaccuracy of the markings; or
• a concealed defect of the vessel impossible to discover by exercising due diligence.

More generally, Article 104(1) of the Merchant Shipping Act further provides that the carrier shall be relieved of liability if the loss, destruction or damage of the goods or the delay has been caused by acts, negligence or omissions of the master, pilot or other persons in the service of the seagoing vessel in its navigational guidance or technical operation, or by fire, provided that such persons were not at fault. Measures taken predominantly in the interest of the cargo are not part of the technical operation of the seagoing vessel.

6 Passenger claims

6.1 What key domestic and international provisions apply to passenger claims in your jurisdiction?

Switzerland has ratified the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea of 13 December 1974 including its 1976 Protocol. In addition, Switzerland is a contracting state of the Convention on Limitation of Liability for Maritime Claims.

6.2 What limitation of liability regime applies to passenger claims and who may avail of it? What types of claims may be limited? What is the procedure for limiting liability?

N/A.

6.3 Under what circumstances is the limitation of liability unavailable?

Article 13 of the Athens Convention sets out the specific circumstances upon the occurrence of which the limitations of liability will not be available to the carrier and/or the servant or agent of the carrier.

7 Ship arrest

7.1 What key domestic and international provisions apply to ship arrest in your jurisdiction?

Switzerland has ratified the 1952 Arrest Convention, but it is not a member state of the 1999 Arrest Convention. Moreover, Switzerland is a landlocked country and therefore seagoing vessels are unlikely to enter the jurisdiction of Swiss authorities.

The arrest of bank accounts or other assets located in Switzerland is a more popular measure, and of more general interest, applied in Switzerland.

7.2 For which types of claims is ship arrest available? What requirements and restrictions apply in this regard?

N/A.

7.3 Are maritime liens recognised in your jurisdiction? If so, what claims give rise to maritime liens? What is the difference (if any) between arrest of a ship for a maritime claim and a maritime lien?

N/A. Maritime liens, including cargo liens, may be exercised based on and under the conditions set out in the general rules of Swiss federal law on arrest.

7.4 Under what circumstances is the arrest of sister ships and associated ships available? What requirements and restrictions apply in this regard?

N/A.

7.5 Under what circumstances can bareboat and time-chartered vessels be arrested?

N/A.

7.6 What are the formal and documentary requirements for arresting a vessel? What is the procedure and how long does this take? Must a countersecurity be provided? What other costs are incurred?

N/A.

7.7 What is the procedure to release a ship from arrest and how long does this take? What security must be provided and how is this calculated?

N/A.

7.8 What is the test for wrongful arrest in your jurisdiction?

N/A.

7.9 Are any alternatives to ship arrest available in your jurisdiction?

N/A.

8 Judicial sale of a vessel

8.1 What key provisions apply to the judicial sale of vessels in your jurisdiction?

Swiss courts may order the sale of a vessel in the context of winding-up or insolvency proceedings against its (Swiss) owner. Such measures, however, are not judicial sales per se.

8.2 What is the procedure for judicial sale of an arrested vessel and how long does this take? What costs are incurred?

N/A (see question 8.1).

8.3 How are the proceeds of sale distributed?

N/A (see question 8.1).

8.4 What is the legal effect of the judicial sale of a vessel?

N/A (see question 8.1).

9 Environmental issues

9.1 What key domestic and international provisions apply to shipping emissions in your jurisdiction?

Switzerland has ratified the following conventions:

• the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972;
• the Convention on Civil Liability for Bunker Oil Pollution Damage 2001;
• the Convention on the Control of Harmful Anti-Fouling Systems on Ships 2001; and
• the Convention for the Control and Management of Ships' Ballast Water and Sediments 2004.

9.2 What key domestic and international provisions apply with regard to the sulphur content of marine fuel in your jurisdiction?

Switzerland has ratified the Convention of the UN Economic Commission for Europe of 1979, as well as it eight protocols, including the 1985, 1994 and 1999 protocols on the reduction of sulphur emissions.

9.3 What key domestic and international provisions apply with regard to ship recycling in your jurisdiction?

Switzerland has ratified the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal of 1989.

9.4 What other environmental issues and concerns should shipowners and operators be aware of in your jurisdiction? What best practices should they follow?

N/A.

10 Employment issues

10.1 What key domestic and international provisions apply to the health and safety of maritime workers in your jurisdiction?

Switzerland has ratified the Maritime Labour Convention of 2006. In addition, Article 63 of the Merchant Shipping Act provides that on board a seagoing vessel flying the Swiss flag, Swiss labour and social security law applies to the crew, unless exceptions or derogations are stipulated by federal law or international conventions or determined by the Federal Council.

10.2 What other employment issues should shipowners and operators be aware of with regard to maritime workers in your jurisdiction?

Specific duties for the shipowner in respect of repatriation, accident and health insurance, as well as unemployment benefits, are set forth in Articles 82 and following of the Merchant Shipping Act.

11 Disputes

11.1 In which forums are shipping disputes typically heard in your jurisdiction?

In principle, the ordinary civil courts, and the commercial courts in the cantons of Zurich, Bern, Aargau and St Gallen, will hear claims brought before court in Switzerland, as there are no dedicated maritime courts in Switzerland.

The Swiss courts, however, will consider jurisdiction clauses (and choice of law provisions) in contractual matters.

11.2 What issues do such disputes typically involve? How are they typically resolved?

These issues most often include, among other matters:

• cargo claims;
• freight claims;
• insurance;
• third-party liability; and
• crew issues.

11.3 Have there been any recent cases of note?

Recently, the Swiss Federal Court handed down a ruling (decision no 4A_507/2021 dated 2 June 2022) that creates confusion for freight forwarders. The facts of the decision concerned a claim for damages by the shipper against the freight forwarder. The shipper lodged an action against the freight forwarder before the court at its domicile. The freight forwarder invoked the defence for lack of jurisdiction, referring to the choice of forum arguably contained at the end of each email that it exchanged with the shipper during the contract negotiations. These emails also contained a reference to the standard terms and conditions of the Association of Swiss Freight Forwarding and Logistics Companies. The cantonal courts and the Swiss Federal Court rejected the plea of lack of jurisdiction. The Swiss Federal Court argued that the email correspondence between the parties did not reveal any consent to the conclusion of a choice of forum. Whereas commentators see this ruling as further demonstration of the Swiss Federal Court's practice on choice of forum agreements, claimants use the ruling against freight forwarders as an argument to challenge the conclusion of general terms and conditions. This is mainly because it is good law in Switzerland that the parties may tacitly agree to the application of general terms and conditions, and court practice hardly ever questions this view. In its afore-mentioned decision, however, the Swiss Federal Court did not address the requirements for the conclusion of general terms and conditions, as the principal rules for general terms and conditions do not apply tel quel to choice of forum agreements included in general terms and conditions.

12 Trends and predictions

12.1 How would you describe the current shipping landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Federal Council is working on a revised maritime strategy. The legislation on commercial maritime shipping under the Swiss flag is outdated in various respects and thus also exposed to international competitive disadvantages. Only a very small proportion of Swiss-owned ships also fly the Swiss flag. Therefore, the legal provisions should be reviewed and adapted where necessary. A relaxation of the registration requirements and attractive taxation should be accompanied by increased safety and sustainability standards, as well as effective supervision and sanction options. In this context, Swiss legislators recently decided to implement a tonnage tax. The revision of the Federal Council's maritime strategy, however, is still pending.

13 Tips and traps

13.1 What are your top tips for shipowners and operators in your jurisdiction and what potential sticking points would you highlight?

In principle, Swiss law respects the parties' freedom of contract to a broad scope – for, example, in ship lease and charterparty agreements.

If contracting parties are considering agreeing a choice of law in favour of Swiss law or referring their disputes to the Swiss courts through a jurisdiction clause, they may rely on the high quality of Swiss jurisprudence. Also, proceedings are generally completed within reasonable time. Against this background, shipowners and operators may opt for the Swiss jurisdiction instead of arbitration if they are keen to benefit from fast procedures with reasonable cost exposure – albeit that the costs might be higher compared to other jurisdictions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.