On 16 March 2020, the Swiss Federal Council declared an “extraordinary situation” under the Federal Law of Epidemics. This is the most severe status contemplated under the law and equates to a state of emergency. It allows the Federal Government to order all necessary measures for parts of or the entire country, including the right to overrule measures that were ordered by cantons and to deviate from all existing Federal laws.
Measures Ordered by the Swiss Government
Restrictions on border traffic from risk countries
Measures vis-à-vis the population, organizations and institutions
Until 19 April 2020, classroom teaching is banned at schools, universities and other training and education institutions. The cantons are required to ensure that childcare is provided for children who cannot be looked after privately. The cantons must prevent that people at high risk, e.g. the grandparents, take care of the children. Child day-care facilities may only be closed if other suitable arrangements exist.
As of 17 March 2020 (00:00), all public and private events are prohibited. The majority of establishments open to the public will be closed. This applies to all shops, markets, restaurants, bars and entertainment and leisure facilities, such as museums, libraries, cinemas, concert halls, sports centers, swimming pools or ski areas. Hairdressers and cosmetic studios are also closed by the new measures as the recommended distance between individuals cannot be maintained. The competent cantonal authorities may carry out unannounced inspections at any time of the establishments and on-site and are responsible for compliance with these rules in their territories.
Food stores, takeaway businesses, company canteens, home delivery services and pharmacies will remain open, as will petrol stations, railway stations, banks, post offices, hotels, public administration offices and social institutions. Hospitals, clinics and medical practices will remain open, but must forego non-urgent medical procedures and treatments.
Companies inviting for a General Meeting may, irrespective of the expected number of participants and without observing the invitation deadline, order that the shareholders can only exercise their rights a) in writing or in electronic form or b) by proxy designated by the company.
People at high risk should work from home. If remote work is not possible, they are to be placed on leave by their employers but continue to receive their salary. The employees must inform their employer if they belong to the high-risk group. The employer may request a doctor’s certificate regarding the employee’s high-risk status.
The cantons may issue additional measures or guidelines in areas not regulated by the Federal Council. The current measures of each canton can be found at https://www.ch.ch/de/coronavirus/#informationen-und-kontakte-in-den-kantonen.
Support by the army
Effects on Contracts
Whether COVID-19 and its effects qualify as Force Majeure cannot be assessed as a general matter. Rather it, depends on the specific contract. If the contract includes a Force Majeure or similar clause, the clause needs to be interpreted. If it was construed broadly, this situation may constitute a Force Majeure event and the consequences foreseen in the clause apply.
If the contract does not include a specific clause but is governed by Swiss law, one needs to assess its content and formulation to determine whether COVID-19 may be a case in which a debtor for instance in a delivery contract is excused from performance of its duties. Under Swiss law, this could be the case due to a subsequent impossibility or a delay that is not the fault of the debtor. In both cases, the debtor has the burden of providing evidence that they are not at fault for the impossibility or the delay. The answer to whether COVID-19 can excuse a debtor will depend on factors such as whether the contract foresees a specific delivery date, whether the subsequent events were foreseeable at the time the contract is concluded, whether the impossibility of performing the task is lasting for an unforeseeable time, and whether the cause lies in governmental measures, etc.
Accordingly, suppliers needs to keep in mind that in a future litigation or arbitration they will have the burden of proving that they were unable to deliver without fault, and they should collect respective evidence. Also for other contract parties, it will be important to collect evidence for the developing factual and legal situation. Furthermore, commercial buyers need to keep in mind that Swiss law assumes that they are waiving performance and will claim compensation if the supplier does not deliver in a timely manner. If a buyer insists on performance at a later point in time, they need to inform the seller immediately after the scheduled delivery date. A supplier, on the other hand, should inform the counterparty immediately whether they may be able to perform later, be it fully or partially.
Effects on Litigation and Debt Enforcement Proceedings
The current measures have, in principle, no effect on the expiration of statutory and judicial deadlines. Unless otherwise ordered by the Federal Council, deadlines are not postponed in civil, criminal and federal administrative proceedings. Deadlines set by the court may be extended by the judge upon request. The Federal Council would have to order a general postponement based on emergency law, which would be possible in light of the current “extraordinary situation”.
For debt enforcement proceedings, the possibility of a legal standstill in the event of epidemics is explicitly provided for in the law. This legal standstill must be declared by the Federal Council or by the cantonal governments with the consent of the Federal Council. So far, no such orders have been issued.
Due to the current situation, certain courts are currently only conducting hearings in urgent cases (e.g., the courts of the canton of Zurich) or excluding audience from attending hearings (e.g., the criminal court of Basel-City).