- Introduction
In its recent judgment of 13 March 2026 (4A_305/2025), the Swiss Federal Supreme Court addressed the case of how financial sanctions under the Swiss Ukraine Ordinance affect the enforceability of monetary claims, particularly in the context of debt enforcement proceedings (Rechtsöffnung).
This ruling is highly significant as it establishes that sanction-related payment prohibitions do not extinguish claims but may instead result in a statutory suspension (Stundung) of the obligation for the time being, thereby preventing enforcement during the sanctions period. - The Facts
The claimant, an Angolan company, sought enforcement of a monetary claim of CHF 368.207,06 based on an arbitral award issued by the London Court of International Arbitration (LCIA).
After initiating debt enforcement proceedings in Switzerland, the claimant obtained a first-instance decision granting definitive legal opening (definitive Rechtsöffnung). However, the debtor successfully appealed. The lower court denied enforcement on the basis that payment was prohibited under Article 15 (2) of the Swiss Ukraine Ordinance, as the claimant was allegedly controlled by a sanctioned entity.
The lower court reasoned that this prohibition rendered the payment legally impossible, thereby extinguishing the claim under Article 199 (1) of the Swiss Code of Obligations.
The claimant challenged this reasoning before the Federal Tribunal. - The Legal Issues
The main legal issues are the following:
a) Qualification of Sanctions under Swiss Law
The Federal Tribunal confirmed that the Ukraine Ordinance constitutes a mandatory overriding provision (Eingriffsnorm) within the meaning of Swiss private international law.
As such, it applies irrespective of the law governing the underlying contractual or arbitral connection. The sanctions regime reflects Switzerland’s foreign policy obligations and must be enforced ex officio by courts.
b) Scope of the Payment Prohibition
Article 15 (2) of the Ukraine Ordinance prohibits making funds or economic resources available – directly or indirectly – to sanctioned persons or entities.
The Federal Tribunal emphasized that this prohibition extends to judicial enforcement proceedings. Allowing enforcement of a claim in favour of a sanctioned creditor would undermine the effectiveness of sanctions and create a contradiction: a debtor would be compelled by law to perform an act that is simultaneously prohibited.
Thus, sanctions not only restrict voluntary payments but also preclude state-assisted enforcement.
c) Extinction vs. Suspension of the Claim
The central issue was whether the payment prohibition leads to:
– Extinction of the claim (as held by the lower court), or
– Temporary suspension of enforceability.
The Federal Tribunal rejected the extinction theory and instead held that sanctions result in a statutory moratorium (gesetzliche Stundung) of the claim. The key reasoning is, in short, the following:
– The sanctions regime does not regulate the substantive fate of claims.
– The prohibition merely prevents enforcement and payment during its duration.
– The claim remains valid but is not currently enforceable.
This approach avoids unjust outcomes, such as permanently depriving a creditor of its claim as a result of temporary geopolitical measures, particularly given that sanctions are intended to function as temporary coercive tools.
d) Procedural Implications in Debt Enforcement
The Federal Tribunal further held that:
– The existence of sanctions must be assessed ex officio, even in proceedings governed by the principle of party disposition.
– The strict evidentiary requirements of Article 81 (1) of the Swiss Debt Enforcement and Bankruptcy Act (SchKG) may be relaxed where necessary to ensure compliance with sanctions.
As a result, courts may deny legal opening even without formal documentary proof typically required for objections such as deferral or payment.
e) Determination of “Control”
Another important issue addressed in this case was the question of when a company is considered controlled by a sanctioned entity under Article 15 (1) (c) of the Ordinance.
The Federal Tribunal accepted a broad, fact-based assessment, relying on indicators such as:
– Significant shareholding (41%),
– Influence over management,
– Involvement in strategic decisions, and
– Economic integration (e.g. references in consolidated financial reporting).
Importantly, the Court confirmed that the SECO (Staatssekretariat für Wirtschaft, State Secretariat for Economic Affairs) guidelines are non-exhaustive, allowing courts flexibility in determining control. - Conclusion
This decision provides essential guidance on the interaction between sanctions law and private enforcement mechanisms in Switzerland.
For this, the Federal Tribunal establishes three key principles:
- Sanctions override private enforcement rights: Claims in favour of sanctioned entities cannot be enforced, even if based on valid, recognised arbitral awards
- No extinction, but suspension: Payment prohibitions result in a statutory deferral rather than extinguishing the claim
- Ex officio application: Courts must independently ensure compliance with sanctions, even if it conflicts with procedural norms
This judgment is highly significant, as it forms part of a body of international case law recognizing the relevant claim in itself, although payment of that claim is not currently possible due to sanctions imposed under the respective EU Regulations. It also highlights the growing importance of public international law considerations in private dispute resolution.