In a new decision 4A 574/2023, 4A 576/2023, dated 24 May 2024 and published on 26 June 2024, the Swiss Federal Supreme Court confirms and specifies the validity of a waiver clause in relation with execution-only mandates as well as investment advisory agreements.
The Swiss Federal Supreme Court has previously ruled that, in the context of asset management agreements, a waiver is only valid if the amount of retrocessions in relation to the assets under management is disclosed.
Recently, the Swiss Federal Supreme Court ruled that a waiver indicating the amount of retrocessions in reference to an applicable percentage per class of assets (without reference to the assets under management) was "not insufficient" in case of execution-only mandates (4A_496/2023, dated 27 February 2024).
Now, the Swiss Federal Supreme Court has taken a further step and ruled that the principles developed in the context of asset management agreements are not directly applicable to relationships where clients themselves order the transactions (i.e. execution-only and advisory).
This confirms that, in the case of execution-only mandates as well as investment advisory agreements, a waiver disclosing the applicable percentage of retrocessions per class of assets is valid. According to the Swiss Federal Supreme Court, in the absence of a management agreement, the "assets under management" obviously cannot be a criterion.
This new decision comes as a confirmation of the reasoning contained in several decisions rendered by some chambers of the Geneva First Instance Court (see our comments in a previous publication: Insights | Schellenberg Wittmer (swlegal.com)).
Unfortunately, the Swiss Federal Supreme Court did not take this opportunity to rule on whether an obligation of restitution exists in the context of execution-only mandates, considering that, in the case at hand, the parties did not discuss the principle of restitution.
To be continued...
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