No “real risk of prosecution” under Article 271 of the Swiss Criminal Code: Application to be excused from disclosure obligations fails

It is well established that the English Court has discretion to excuse a party from performance of its procedural obligations in litigation where it considers that performing those obligations would give rise to an actual risk of prosecution in a foreign state: Bank Mellat v HM Treasury [2019] EWCA Civ 449.

In Public Institution for Social Security v Al Wazzan & Ors [2023] EWHC 1065, the defendants sought to be excused from their obligation to give disclosure on the basis that doing so would lead to a real risk of prosecution in Switzerland under Article 271 of the Swiss Criminal Code¹. The Court was not persuaded by the defendants’ arguments and refused to grant the order sought.

The decision provides welcome guidance in a previously uncertain area, as well as a salutary warning to parties seeking to rely on Article 271 to excuse themselves from their disclosure obligations in English Court proceedings.

Article 271

Article 271 prohibits the performance on Swiss soil of “official” acts i.e. those which are properly the preserve of the state. The article was originally introduced during WWII in response to a German gestapo officer’s kidnapping of a Swiss Jewish citizen.

It is well established under Swiss law that Article 271 is engaged by examination of witnesses or the service of proceedings for the purposes of foreign litigation. It is less certain, however, whether Article 271 applies to the collection and/or review of documents for the purpose of satisfying a foreign Court’s disclosure order. This was the issue considered by the Court in Al Wazzan.

The decision in Al Wazzan

The applicants were the defendants to a claim brought by the Kuwaiti government regarding an alleged fraud committed against Kuwait’s social security system and state pension scheme. They sought to avoid giving disclosure of documents obtained from the Swiss criminal authorities and other documents originally obtained from Switzerland on the basis that doing so would give rise to a real risk of prosecution in Switzerland.

However, the Court was not persuaded that Article 271 was engaged by the giving of disclosure, having essentially accepted the respondents’/claimants’ Swiss law expert’s evidence on the point:

• First, the Court was not persuaded that Article 271 was capable in principle of applying to compliance with a disclosure order; in Swiss litigation the submission of documents (unlike, for example, the examination of witnesses) is not restricted to the Court and it is not therefore clear that it is an “official” act.
• Secondly, even if Article 271 could in theory apply to a disclosure order, it was accepted by the parties’ respective experts that (subject to the third party information point discussed below) it would not apply if the sanction for non-compliance with the order was procedural rather than criminal. In English litigation, the sanction for non-compliance with a disclosure order is generally procedural (eg, striking out relevant sections of the party’s pleading). Although contempt of court would in theory be available, crucially it would not be applied absent a penal notice on the face of the relevant order. There was no such notice on the face of the order at issue.
• Thirdly, while the applicants had sought to rely on a recent Swiss case which had indicated that the disclosure of documents containing information belonging to third parties protected by Swiss public policy would fall within Article 271 (even where the sanction for breaching the order was only procedural), the third party information in that case had been subject to Swiss banking and fiduciary secrecy laws. There was no suggestion that any third party information in the present case raised any such issues.
• Fourthly, Article 271 was not engaged by virtue of the fact that Kuwait had sought copies of the documents in the context of the Swiss criminal proceedings and this had been refused. Kuwait was not seeking to subvert this result and thereby perform an “official” function simply by exercising its rights as a party to civil litigation.
• Fifthly, and in any event, the relevant documents were already in the possession of the defendants’ English lawyers. Giving disclosure would not therefore require any act to take place on Swiss soil and Article 271, which was clearly restricted to such acts, was not therefore engaged.

Accordingly, the Court was not persuaded that the applicants would be at a real risk of prosecution if they were to give disclosure. It therefore declined to excuse them from complying with their disclosure obligations.

Comment

The Court’s findings on the application of Article 271 (and the attendant risk of prosecution) were findings of fact based on its assessment of the expert evidence on Swiss law. They would not therefore technically bind another Court. That said, it seems likely that any party seeking to rely on Article 271 to justify failing to comply with its disclosure obligations will (absent materially different facts eg, as to the relevant third party information) face an uphill struggle.

The Court’s decision creates potential difficulties for parties insofar as it is not certain that the Swiss Courts would reach the same view of the application of Article 271. It therefore remains possible that giving disclosure might give rise to criminal liability in Switzerland. It is worth bearing in mind in this regard that the defendants’ expert was of the view that Article 271 was probably engaged (and this firm has also previously received Swiss law advice to similar effect).

In all cases where Article 271 is potentially engaged, Swiss law advice should be sought at an early stage. In addition, any party which ultimately concludes that there is a risk that Article 271 is engaged might consider applying to the Swiss Federal Office of Justice (“FOJ”) for a clarificatory opinion. Although this would not permit the party to give disclosure in contravention of Article 271 (as would the lengthier judicial assistance procedure under the Hague Convention), it would provide an authoritative opinion from the Swiss authorities relatively swiftly as to whether Article 271 was engaged. This should give the applicant either comfort that they are able to perform their disclosure obligations without fear of prosecution or (alternatively) persuasive material with which to justify to the English Court a request to be excused from those obligations.

¹_{The defendants also sought the same order on various other bases which are beyond the scope of this article.}