26 February 2020

Group interests may be taken into account: latest decision from the Federal Supreme Court concerning corporate law liability within groups

In its decision BGer 4A_268/2018 dated 18 November 2019, the Federal Supreme Court expressed its opinion on corporate law liability within groups. While groups are recognized under and are regulated by Swiss law in certain areas, their special features have so far hardly been taken into account in case law. However, the Federal Supreme Court has now decided in the present decision, with reference to the so-called Business Judgement Rule, that executive bodies of group companies may take the interests of the group into account when making business decisions. The decision is to be welcomed from an entrepreneurial perspective, as it reflects economic realities, leaves the board of directors room for entrepreneurial - and therefore necessarily risky - decisions, and creates greater legal certainty in group financing.