The jurisdiction applicable to an insurance contract is governed by Section 3 (Articles 8 – 14) of the Lugano Convention 2007 (SR 0.275.12), entitled “Jurisdiction in matters relating to insurance”. The provisions of Section 3 set out where an insurer may be sued or can bring proceedings and overrule the jurisdiction provisions in many insurance contracts. The Lugano Convention 2007 (SR 0.275.12) has been in force in Switzerland since 1 January 2011.
An insurer domiciled in a state bound by the Lugano Convention 2007 may be sued:
- in the courts of the state where he is domiciled;
- in another state bound by the Lugano Convention 2007, in the case of actions brought by an insured, policyholder or beneficiary, in the courts for the place where the plaintiff is domiciled;
- if he is a coinsurer in the courts of a state bound by the Lugano Convention 2007 in which proceedings are brought against the leading insurer.
An insurer who is not domiciled in a state bound by this Convention but has a branch, agency or other establishment in one of the states bound by this Convention shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that state (Article 9 of the Lugano Convention 2007 (SR 0.275.12)).
However, the parties to the contract may agree that the insured, policyholder or beneficiary may in addition bring proceedings in a country other than one referred to above (Article 13 Paragraph 2) of the Lugano Convention 2007 (SR 0.275.12)).
If a dispute arises out of the operations of an insurer’s branch, agency or other establishment in a member state, the insurer is deemed to be domiciled in that member state (Article 5 Paragraph 5 of the Lugano Convention 2007 (SR 0.275.12)).
In respect of liability insurance or insurance of immovable property, the insurer may in addition be sued in the courts for the place where the harmful event occurred. This also applies if movable and immovable property are covered by the same policy and both are affected by the same contingency (Article 10 of the Lugano Convention 2007 (SR 0.275.12)).
In respect of liability insurance, the insurer may also if the law of the court permits it be joined in proceedings which the injured party has brought against the insured (Article 11 of the Lugano Convention 2007 (SR 0.275.12)).
An insurer may bring proceedings only in the courts of the state bound by this Convention in which the defendant is domiciled, irrespective of whether they are the policyholder, the insured or a beneficiary (Article 12 of the Lugano Convention 2007 (SR 0.275.12)).
Section 3 of the Lugano Convention 2007 (SR 0.275.12) does not apply to reinsurance. The parties to the contract are free to choose the jurisdiction that will apply.
Agreeing the jurisdiction
Article 23 of the Lugano Convention 2007(SR 0.275.12) states that when the parties to a contract agree on the jurisdiction that will apply to the contract, the agreement must conform to the following requirements:
a) It must be in writing or evidenced in writing (this includes electronic communication methods that provide a durable record), or;
b) In a form which accords with practices which the parties have established between themselves, or;
c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
The above applies to insurance and reinsurance contracts.