Nater Dallafior successfully represented a client against M.M. Warburg Bank

By channeling customer assets into shady investment vehicles, Rolf Wägli and his asset management company R.Wägli & Cie AG caused a damage of several million Swiss francs. The client discovered the loss in 2011, when the custodian bank, M.M. Warburg Bank, listed these investments in the portfolio statement as worthless. The client subsequently filed a criminal complaint against Rolf Wägli with the Zurich public prosecutor's office for white-collar crimes. In 2015, the client informed M.M. Warburg Bank that he held the bank jointly liable for his loss.

After having learnt that the prosecutor had opened an investigation against M.M. Warburg Bank in the same context, the client filed the form for civil claims resulting from crimes with the prosecutor's office in December 2016 and claimed damages of 20 million Swiss francs from the bank. When M.M. Warburg Bank announced to enter into liquidation, the client lodged his claim of 20 million Swiss francs with the liquidator. The bank contested any liability and filed a negative declaratory action against the client with the Commercial Court of Zurich. The client raised the objection of lis pendens and referred to the criminal proceedings against the bank in which he filed the form for civil claims. The bank took the position that the alleged claim was not sufficiently substantiated and individualized to establish pendency in the criminal proceeding; inter alia because the client did not file a criminal complaint against the bank.

The Commercial Court and, upon appeal of M.M. Warburg Bank, the Swiss Federal Supreme Court upheld the client's objection of lis pendens and dismissed the negative declaratory action without entering into the merits. Both courts found that, unlike in civil proceedings, a civil claim becomes pending in criminal proceedings when the victim files a written declaration to claim civil claims based on the offence. The Swiss Federal Supreme Court further held that neither the lack of quantification or justification of the civil claim nor the omission to file a criminal complaint forestall pendency. Moreover, the Commercial Court found that pendency of civil claims in the criminal proceedings extends to contractual claims. The Swiss Federal Supreme Court, however, did not provide clarification on this controversial issue, because M.M. Warburg Bank failed to put this argument forward in conformity with procedural requirements.

The team consisted of Patrik Salzmann and Ramona Zürrer.

For further information please see the decision of the Swiss Federal Supreme Court (4A_622/2019).