How to Use Corporate Arbitration Clauses in Switzerland (art. 697n CO): Scope, Drafting & Enforcement, 2026

Corporate arbitration Switzerland now has an explicit statutory foundation in the revised Swiss Code of Obligations, and 2026 is seeing accelerating adoption of articles-of-association arbitration clauses by companies seeking confidential, specialist and enforceable dispute resolution. For general counsel, corporate secretaries and boards, the practical questions are no longer whether company-level arbitration is permitted, but how to adopt it validly, how to draft the clause for the right scope, and how to protect minority shareholders while preserving enforceability. This guide sets out the statutory basis, the adoption mechanics, concrete drafting options, minority-protection safeguards, procedural considerations and enforcement strategy, all tied to the Swiss Code of Obligations and the Federal Act on Private International Law (PILA).

It is written for decision-makers who need actionable guidance rather than a high-level overview.

Executive summary: Why companies are adopting articles-of-association arbitration clauses

The reform of Swiss corporate law, in force since 1 January 2023, introduced an express rule allowing stock corporations to insert arbitration clauses into their articles of association. This closes a long-standing gap and gives boards a reliable route to channel internal corporate disputes into arbitration rather than ordinary court litigation.

• Confidentiality. Arbitration keeps sensitive shareholder and governance disputes out of the public record, a decisive advantage for companies concerned about reputational exposure.
• Specialist adjudication. Parties can appoint arbitrators with corporate-law and sectoral expertise rather than relying on a generalist court docket.
• Binding effect on the corporate body. A validly adopted clause in the articles binds the company, its organs and, critically, present and future shareholders, which a mere shareholder agreement cannot achieve.
• Enforceability. Awards benefit from the robust Swiss framework under PILA and, cross-border, the New York Convention.
• Risks to weigh. Adoption engages statutory formalities, minority-protection concerns and careful scope drafting; a poorly drafted clause can generate jurisdictional disputes that defeat the purpose.

As a rule of thumb, companies with concentrated or active shareholder bases, cross-border ownership, or a history of governance friction are the strongest candidates for adoption. The statutory text should be read in full before any resolution is tabled.

Legal basis: Art. 697n CO and the framework for corporate arbitration Switzerland

The statutory anchor for corporate arbitration Switzerland is found in Article 697n of the Swiss Code of Obligations, introduced by the 2020 corporate law reform that entered into force on 1 January 2023. This provision expressly authorises a company to provide, in its articles of association, that disputes under company law are to be decided by an arbitral tribunal seated in Switzerland. It also requires that the procedural guarantees designed to reconcile arbitration with the mandatory features of corporate law be observed.

Annotated overview of the key provision

Article 697n CO is the gateway provision: it permits the articles of association to contain an arbitration clause covering company-law disputes, provided the seat of the arbitration is in Switzerland. Because the clause lives in the articles and not in a bilateral contract, it operates on the corporate body itself. That is what allows it to reach future shareholders who acquire their shares after the clause is adopted. Unless the articles provide otherwise, the clause binds the company, its organs, the members of its organs and its shareholders.

The provision also makes clear that the procedural architecture of Swiss arbitration law continues to govern the proceedings. In particular, persons who may be directly affected in their legal position by the award must be informed of the initiation and conclusion of the proceedings and given the opportunity to participate in the constitution of the tribunal and in the proceedings as intervening parties. The common thread is that participation rights and notification duties are mandatory: a corporate arbitration clause cannot be used to deprive affected shareholders or corporate organs of the opportunity to be heard.

For the purposes of drafting, the practical takeaways from the Swiss Code of Obligations arbitration regime are:

• The seat must be in Switzerland for the statutory regime to apply.
• The clause binds the company, its organs and its shareholders, present and future, once validly adopted, unless the articles provide otherwise.
• Procedural participation and notification rights of affected persons are protected and cannot be contracted away.
• The clause should dovetail with, rather than contradict, the arbitration law that governs the proceedings (Part 3 of the Civil Procedure Code for domestic arbitration, or Chapter 12 of the PILA for international arbitration).

Interplay with PILA, the Civil Procedure Code and the New York Convention

The conduct, review and enforcement of the arbitration itself are governed by Swiss arbitration law. Where the matter is international, the arbitration provisions of Chapter 12 of the Federal Act on Private International Law (PILA) apply; where it is purely domestic, the arbitration provisions of Part 3 of the Swiss Civil Procedure Code (CPC) apply, subject to any permitted opt-in to the international regime. These frameworks set out the limited grounds on which an award may be challenged and the framework for recognition. Internationally, enforcement of Swiss-seated awards abroad is supported by the New York Convention, which is one of the principal reasons companies choose a Swiss seat.

Swiss arbitration practice is informed by, and broadly consistent with, the principles reflected in the UNCITRAL Model Law on International Commercial Arbitration, which gives foreign counterparties and tribunals a familiar reference point.

Which corporate disputes are arbitrable? Scope and limits

Scope is the single most important drafting decision. The attraction of corporate arbitration Switzerland lies in capturing the internal, company-law disputes that most disrupt governance, but the clause must respect the outer limits of arbitrability.

Typical arbitrable disputes

The core category is company-law disputes between shareholders and the company, between shareholders inter se in their capacity as members, and between the company and its organs. In practice, shareholder disputes arbitration Switzerland frequently covers:

• Challenges to corporate resolutions. Actions to contest or annul resolutions of the general meeting or the board.
• Director and officer disputes. Questions concerning the appointment, removal and liability of board members.
• Dividend and distribution disputes. Disagreements over declared distributions and related entitlements.
• Transfer and registration restrictions. Disputes about share transfer approval, registration in the share register and related restrictions.
• Capital and structural measures. Challenges connected to capital increases, reductions and other corporate acts affecting membership rights.

Because these matters often have effects beyond the immediate parties, the statutory participation safeguards are especially relevant: the clause must be drafted so that affected shareholders and organs can be notified and heard.

Non-arbitrable or court-preferred matters

Not everything connected to a company can be swept into arbitration. Matters that fall outside party disposition, or that engage state or supervisory powers, remain with the courts or competent authorities. These typically include:

• Insolvency and bankruptcy proceedings. Collective insolvency matters sit with the courts and insolvency administration, not an arbitral tribunal.
• Public-law and regulatory matters. Supervisory and registry functions that are reserved to public authorities.
• Criminal matters. Criminal liability is never arbitrable.
• Certain register and status decisions. Entries and corrections that depend on the commercial register authority rather than on a dispute between parties.

The safe drafting approach is to define scope by reference to “company-law disputes” as contemplated by Article 697n CO, then expressly carve out matters that are not capable of settlement by arbitration. This avoids a tribunal being asked to decide something it has no power to resolve, which would expose any resulting award to challenge.

Adoption mechanics: how a company adopts a corporate arbitration clause under Swiss law

Adopting a clause is a corporate act governed by the articles and by Article 697n CO. Getting the process right is what makes the clause binding, including on dissenting and future shareholders.

Who can adopt, general meeting competence and majorities

Because the clause forms part of the articles of association, it is the general meeting (AGM or an extraordinary general meeting), not the board alone, that has competence to adopt or amend it. Amending the articles to introduce an arbitration clause is a resolution of the shareholders. Given the significance of the clause, it removes access to the ordinary courts for internal disputes, companies should confirm the applicable majority threshold against both the Code of Obligations and the company’s own articles before convening the meeting; depending on how the articles are drafted, a qualified majority may be required.

The board’s role is preparatory: it proposes the amendment, prepares the clause text and the explanatory materials, and places the item on the agenda.

Timing, notice and participation

The amendment must be included in the notice convening the general meeting, with the proposed clause wording made available to shareholders in advance so they can exercise their rights in an informed way. Adequate notice is not a formality: because the clause affects the fundamental right of access to the courts, shareholders must have a genuine opportunity to consider and vote on it. Notification duties toward affected persons, reflected in the statutory regime, should be built into both the adoption process and the clause’s own procedural terms.

Filing, public deed and publication

An amendment to the articles of association requires public notarisation and registration in the commercial register. Until the amended articles are registered, the clause does not take external effect. Companies should coordinate the notarial appointment, the register filing and any publication requirements as part of the adoption timetable rather than as an afterthought.

A short AGM resolution might read:

“The general meeting resolves to amend the articles of association by inserting a new article providing that all company-law disputes between the company and its shareholders or organs, and between shareholders in their capacity as such, shall be finally resolved by arbitration seated in [place], Switzerland, in accordance with [institutional rules], and instructs the board to take all steps necessary to notarise and register this amendment.”

This is a placeholder only; the final text must be tailored to the company’s structure, scope decisions and chosen rules, and reviewed by qualified counsel.

Drafting the clause: practical options and recommended language

A clause that is valid but vague invites jurisdictional fights. The goal of careful drafting is to make the tribunal’s authority, the procedural framework and the scope unambiguous from day one.

Core elements every clause should address

• Scope. Define which disputes are covered, anchored to company-law disputes under the Swiss Code of Obligations, with express carve-outs for non-arbitrable matters.
• Seat. A Swiss seat is essential for the statutory regime; name a specific city.
• Rules. Specify institutional rules (for example, the Swiss Rules of International Arbitration administered by the Swiss Arbitration Centre, which include supplementary provisions for corporate disputes) or an ad hoc framework.
• Number of arbitrators. One or three, with a default and an appointment mechanism that works in multi-party situations.
• Language. Fix the language of the proceedings to avoid procedural disputes.
• Participation and notification. Provide expressly for the notification and participation of affected shareholders and organs, consistent with the statutory safeguards.
• Consolidation and joinder. Address multi-party and multi-contract scenarios so related disputes can be heard together.
• Interim and emergency measures. Preserve the right to apply to courts for urgent relief and, where available, to an emergency arbitrator.
• Confidentiality. State the confidentiality regime, subject to mandatory disclosure requirements.

Variants for public and private companies

For a closely held private company, a broad clause capturing the full range of internal disputes is usually desirable, because the shareholder base is small, known and engaged. For companies with a wider or more fluid shareholder base, drafters tend to favour a clearly bounded scope and robust participation provisions, so that the mechanics remain workable when many shareholders could be affected by a single resolution challenge. The chosen institutional rules, and in particular their provisions on multi-party constitution of the tribunal, consolidation and joinder, should be checked against the company’s realistic dispute scenarios.

Three annotated clause templates

Variant A, Narrow shareholder disputes. “Disputes between shareholders in their capacity as such, and between a shareholder and the company, concerning [specified matters] shall be finally settled by arbitration seated in [city], Switzerland, under the [rules], before [one/three] arbitrator(s), in [language].” Drafting note: deliberately limited; suitable where the company wants arbitration only for defined categories and leaves other matters to the courts.

Variant B, Broad corporate governance. “All company-law disputes involving the company, its shareholders and its organs, including challenges to resolutions of the general meeting and the board, director liability, and distribution disputes, shall be finally settled by arbitration seated in [city], Switzerland, under the [rules], with provisions for notification and participation of affected persons, consolidation and joinder.” Drafting note: maximises the benefit of a single forum; requires strong participation and multi-party machinery.

Variant C, Opt-in with carve-outs. “Company-law disputes shall be submitted to arbitration seated in [city], Switzerland, under the [rules]; provided that [specified matters, e.g. certain statutory minority actions] may be brought before the competent Swiss courts, and that applications for interim relief may be made to the courts at any time.” Drafting note: balances arbitration with preserved court access for sensitive categories; useful where minority buy-in is needed to secure the necessary majority.

Each template contains changeable placeholders. None is a substitute for bespoke drafting and legal review against the company’s articles, shareholder base and strategic objectives.

Minority shareholder protections and governance safeguards

The legitimacy of corporate arbitration Switzerland depends on respecting minority interests. A clause that is seen as a tool to disadvantage minorities is both harder to adopt and more vulnerable to later attack. Minority shareholder rights arbitration considerations should therefore be addressed on the face of the clause and in the adoption process.

Opt-outs, carve-outs and procedural safeguards

• Carve-outs for sensitive actions. The clause can reserve certain statutory minority or derivative-type actions to the courts, which can be decisive in securing the majority needed for adoption.
• Participation rights. Consistent with the statutory regime, the clause must ensure affected shareholders are notified and able to participate, so that an award on a corporate act does not bind persons who had no chance to be heard.
• Right to counsel and equal treatment. The procedural framework should guarantee equal treatment and the right to be heard, mirroring the fundamental guarantees that underpin Swiss arbitration law.
• Access to interim relief. Preserving court access for urgent protective measures reassures minorities that arbitration will not leave them without a remedy pending the award.

Interaction with shareholder agreements

Many companies already have a shareholder agreement containing its own dispute-resolution clause. A company-level clause in the articles and a contractual clause in a shareholder agreement serve different functions: the articles bind all shareholders including future ones, while the shareholder agreement binds only its signatories. Conflicts between the two, different seats, different rules, overlapping scope, create exactly the jurisdictional uncertainty that arbitration is meant to avoid. Best practice is to align the two instruments: harmonise the seat, the institutional rules and the scope, and make clear which instrument governs which category of dispute. Where alignment is not possible, the clause should state how overlaps are resolved.

Procedural issues: consolidation, multi-party disputes and emergency relief

Corporate disputes are rarely bilateral. A single contested resolution can affect many shareholders at once, which makes multi-party procedure central to any workable corporate arbitration Switzerland clause.

Consolidation and multi-party joinder

Institutional rules commonly provide mechanisms for consolidating related proceedings and joining additional parties, but these mechanisms only operate within the limits of the applicable rules and the consent captured by the clause. Because a clause in the articles binds all shareholders, it provides a stronger consent basis for multi-party proceedings than a bilateral contract. Even so, the clause should expressly authorise consolidation and joinder and provide an appointment mechanism for the tribunal that functions when there are multiple claimants or respondents, so that equal treatment in constituting the tribunal is preserved. Court practice, by contrast, handles multiple affected parties through its own procedural rules, which is one reason some companies retain court access for specific categories.

Interim relief: courts versus emergency arbitrator

Urgent measures, freezing a distribution, restraining the implementation of a contested resolution, preserving the status quo, often cannot wait for a tribunal to be constituted. Swiss arbitration law allows parties to seek interim relief from the state courts even where an arbitration clause exists, and many institutional rules also offer an emergency arbitrator. A practical checklist for when to go to court rather than to an emergency arbitrator includes:

• Whether the tribunal is already constituted (if not, consider the emergency arbitrator or the courts).
• Whether the measure must bind third parties or require state enforcement powers (courts are often better placed).
• The degree of urgency and the time needed to appoint an emergency arbitrator.
• Whether confidentiality is paramount (an arbitral route may be preferable).

The clause should make clear that applying to a court for interim relief is not a waiver of the arbitration agreement.

Enforcement and challenge of corporate arbitral awards in Switzerland

An award is only as valuable as its enforceability. The enforcement of corporate arbitral awards Switzerland benefits from one of the most arbitration-friendly frameworks in the world, but companies should understand both the recognition route and the limited grounds for challenge.

Recognition and enforcement under PILA and the New York Convention

Domestically, an award rendered by a Swiss-seated tribunal has effect comparable to a final court judgment and can be enforced through the ordinary enforcement channels. Internationally, recognition and enforcement abroad are supported by the New York Convention, which obliges contracting states to recognise and enforce Swiss-seated awards subject only to the Convention’s narrow exceptions. The governing arbitration framework under PILA, aligned in substance with the principles of the UNCITRAL Model Law, is a key reason parties and foreign courts treat Swiss awards as reliable.

Grounds for setting aside and practical timelines

The grounds on which a Swiss-seated award can be set aside are deliberately limited and are set out in the applicable arbitration law (Chapter 12 of the PILA for international arbitration, or the Civil Procedure Code for domestic arbitration). They focus on matters such as improper constitution of the tribunal, the tribunal wrongly accepting or declining jurisdiction, a decision that goes beyond or fails to address the claims submitted, violation of equal treatment or the right to be heard, and incompatibility with public policy. A challenge does not reopen the merits. Set-aside applications in international matters are brought directly before the Swiss Federal Supreme Court.

In the corporate context, the most realistic challenge risks arise where a company neglected the statutory participation and notification safeguards, which is why those safeguards must be built into both the clause and the proceedings. Challenges are subject to short statutory deadlines, so the window to act is narrow and the prospects of success are generally low where the tribunal observed due process.

Practical steps for enforcement: secure a clean, reasoned award; confirm the time limit for any set-aside application has passed or that no challenge succeeds; and, for cross-border enforcement, prepare the documentation required under the New York Convention in the enforcement jurisdiction.

Practical checklist and step-by-step adoption plan

1. Confirm the business case and identify the dispute categories the company wants to arbitrate.
2. Decide the clause variant (narrow, broad or opt-in with carve-outs) and the scope boundaries.
3. Select the seat (in Switzerland), institutional rules, number of arbitrators and language.
4. Build in participation, notification, consolidation, joinder, interim-relief and confidentiality provisions.
5. Design minority safeguards and reconcile the clause with any shareholder agreement.
6. Prepare the board proposal, explanatory materials and the AGM resolution text.
7. Convene the general meeting with proper notice and secure the required majority.
8. Notarise the amendment and register the amended articles in the commercial register.
9. Prepare enforcement readiness: document retention, due-process discipline and award-handling procedures.

Board and AGM resolution templates for adopting corporate arbitration under Art. 697n CO are a practical next step for teams moving to implementation.

Comparison table: arbitration clause variants, shareholder agreement and court litigation

Conclusion

Corporate arbitration Switzerland has moved from a contested possibility to a well-grounded governance tool under Article 697n of the Swiss Code of Obligations. For boards and in-house counsel, the opportunity in 2026 is to adopt clauses that are confidential, specialist and enforceable, while respecting the statutory participation safeguards that protect minority shareholders and keep awards resistant to challenge. Success depends on three disciplines: adopting the clause through the correct general-meeting and registration mechanics, drafting scope and procedure with precision, and preparing for enforcement from the outset. Handled with care, a company-level arbitration clause delivers a single, reliable forum for internal disputes; handled carelessly, it invites the very jurisdictional fights it was meant to prevent.

Companies considering adoption should obtain tailored advice on statutory interpretation, clause wording and enforcement strategy before tabling a resolution.

Sources

1. Swiss Code of Obligations (English consolidated text, Fedlex)
2. Federal Act on Private International Law (PILA) (English consolidated text, Fedlex)
3. Swiss Civil Procedure Code (English consolidated text, Fedlex)
4. Swiss Federal Supreme Court (Bundesgericht / Tribunal fédéral)
5. Swiss Arbitration Centre (Swiss Rules of International Arbitration)
6. UNCITRAL, Model Law on International Commercial Arbitration