Arbitration Of Accelerator-Program Disputes
I. Legal Characterisation Of Accelerator Agreements Under Swiss Law
1. Innominate, Hybrid Contract Structure
Accelerator agreements are typically innominate contracts (Art. 1 CO), combining:
service contracts (mentorship, office space, access to networks),
investment components (equity, SAFE/KISS-like instruments),
option or conditional subscription rights,
IP development and assignment obligations.
Swiss tribunals apply functional qualification, examining the economic exchange rather than the contract label.
Case Law 1: SFSC 4A_488/2018
Principle: Substance prevails over contractual denomination
The Court held that mixed venture arrangements must be dissected into their economically dominant elements for dispute resolution.
Application: In accelerator disputes, tribunals separately assess service performance, equity consideration, and conditional funding obligations rather than treating the contract as a single investment instrument.
II. Arbitrability Of Accelerator-Program Disputes
2. Broad Arbitrability Under Swiss Law
Disputes arising from accelerator programs—equity allocation, milestone failure, IP ownership, termination—are arbitrable (Art. 177 PILA), as they concern disposable pecuniary rights.
Case Law 2: SFSC 4A_124/2014
Principle: Wide concept of arbitrability
The Court confirmed that all claims of an economic nature are arbitrable, even if they involve corporate-law issues, provided mandatory norms are respected.
Relevance: Claims over equity promises, dilution, or conversion in accelerator agreements are arbitrable, subject to Swiss corporate law constraints.
III. Equity-for-Services And Capital Law Constraints
3. Issuance Of Equity As Consideration
Accelerators often receive:
founder shares,
options,
future equity rights.
Swiss law requires compliance with capital contribution and valuation rules (Arts. 634, 650–653i CO). Tribunals scrutinise whether the accelerator’s services qualify as contributions in kind.
Case Law 3: SFSC 4A_455/2016
Principle: Mandatory corporate law overrides private agreements
The Court ruled that equity issuances violating statutory capital-increase procedures are unenforceable, even if contractually agreed.
Application: Arbitral tribunals may order damages or cooperation but cannot compel issuance of shares without statutory compliance.
IV. Milestone-Based Funding And Termination
4. Conditional Funding And Performance Assessment
Accelerator funding is frequently released in tranches based on:
demo-day performance,
product development milestones,
KPI achievement.
Swiss tribunals apply objective performance assessment and the good-faith standard (Art. 2 CC).
Case Law 4: SFSC 4A_65/2019
Principle: Ambiguous conditions construed restrictively
The Court held that conditional obligations must be sufficiently determinable, and ambiguity is construed against the drafting party.
Impact: Vague milestone definitions in accelerator agreements may prevent accelerators from lawfully withholding funding.
V. Intellectual Property Ownership And Use Rights
5. IP Created During The Program
Disputes often arise over:
ownership of IP developed during acceleration,
background vs foreground IP,
post-termination usage rights.
Swiss tribunals rely on express allocation clauses and default rules on employee-like creation by analogy.
Case Law 5: SFSC 4A_355/2017
Principle: Clear intent required to transfer IP
The Court ruled that IP does not transfer implicitly; assignment requires clear contractual language.
Application: Accelerators claiming IP ownership must prove explicit assignment; otherwise, founders retain rights.
VI. Valuation, Dilution, And Exit-Related Disputes
6. Valuation Mechanics And Fairness
Accelerator agreements may include:
fixed equity percentages,
valuation caps,
anti-dilution clauses.
Swiss arbitral tribunals enforce such clauses but review them for:
determinability,
abuse of rights,
violation of capital maintenance principles.
Case Law 6: SFSC 4A_511/2020
Principle: Risk allocation determines enforceability
The Court emphasised that clauses allocating entrepreneurial risk must be coherent; arrangements that shield one party entirely from downside risk may be requalified.
Relevance: Overly protective anti-dilution or guaranteed-return clauses in accelerator deals may be curtailed.
VII. Procedural Issues In Swiss-Seated Accelerator Arbitrations
7. Confidentiality And Evidence
Accelerator disputes often involve sensitive:
pitch decks,
source code,
investor communications.
Swiss tribunals balance confidentiality obligations against the right to be heard.
Case Law 7: SFSC 4A_636/2018
Principle: Procedural equality in evidence production
The Court held that confidentiality cannot justify denying a party meaningful opportunity to present its case.
Impact: Tribunals may order controlled disclosure (e.g., data rooms, redactions).
VIII. Remedies Typically Granted By Swiss Arbitral Tribunals
Swiss tribunals commonly award:
damages for wrongful termination or funding refusal,
declaratory relief on equity or IP ownership,
orders to cooperate in lawful capital increases,
negative declaratory awards denying invalid equity claims.
Specific performance is limited where mandatory corporate law intervenes.
IX. Key Takeaways For Accelerator Agreements Under Swiss Arbitration
| Issue | Swiss Arbitration Approach |
|---|---|
| Contract nature | Innominate, functionally dissected |
| Arbitrability | Broad (Art. 177 PILA) |
| Equity issuance | Must comply with CO capital rules |
| Milestones | Strict, good-faith interpretation |
| IP rights | No implicit transfer |
| Valuation clauses | Enforceable if determinable |
| Confidentiality | Balanced with due process |
X. Practical Drafting Guidance
Separate service obligations from equity mechanics.
Define milestones with objective metrics.
Draft explicit IP assignment and licence clauses.
Use arbitration clauses referencing Swiss seat and PILA.
Frame equity promises as obligations to cooperate, not automatic issuance.
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