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Swiss Rules On Counterclaims And Set-Offs

I. Conceptual Distinction Under Swiss Law

Swiss practice draws a clear distinction between:

Counterclaims

Independent claims asserted by the respondent against the claimant

May seek affirmative relief (payment, damages, declarations)

Set-offs (Compensation / Verrechnung)

A defence mechanism

Aims to extinguish or reduce the claimant’s claim through opposing claims

Swiss tribunals treat these mechanisms differently for:

jurisdiction,

admissibility,

procedural sequencing.

II. Jurisdiction Over Counterclaims

1. Arbitration Agreement as the Primary Gatekeeper

A counterclaim is admissible only if it falls within the scope of the arbitration agreement.

SFT Decision 4A_18/2013

Confirmed that tribunals must verify independent jurisdiction over counterclaims

The fact that a claim is procedurally labelled a “counterclaim” does not expand jurisdiction

Key Rule
Counterclaims must be:

covered by the same arbitration clause, or

sufficiently connected to it under Swiss interpretative standards.

III. Broad Interpretation of Arbitration Clauses

Swiss tribunals adopt a pro-arbitration interpretation to avoid parallel proceedings.

SFT Decision 4A_376/2014

Held that broadly drafted clauses (“all disputes arising out of or in connection with”):

extend to counterclaims arising from the same contractual matrix

Encouraged functional rather than formal interpretation

IV. Admissibility and Procedural Timing of Counterclaims

1. Tribunal Discretion

Under Art. 182 PILA, tribunals have wide discretion to regulate:

when counterclaims may be raised,

whether late counterclaims are admissible.

SFT Decision 4A_70/2016

Upheld tribunal’s refusal to admit a late counterclaim

Confirmed that:

exclusion based on procedural economy

does not violate the right to be heard if parties had prior opportunity

V. Set-Offs as a Defence: Jurisdictional Nuances

1. Set-Off Without Independent Jurisdiction

Swiss law allows tribunals to consider set-off even if the counter-claim itself would not fall under the arbitration clause, provided it is raised purely defensively.

SFT Decision 4A_404/2013

Confirmed that:

set-off does not necessarily require independent arbitral jurisdiction

as long as no affirmative relief is sought

Distinguished between:

defensive compensation, and

autonomous counterclaims

VI. Substantive Law Governing Set-Off

Set-off is governed by:

the law applicable to the claim,

or the law governing the counter-claim,
depending on party agreement and conflict-of-laws rules.

SFT Decision 4A_150/2012

Approved tribunal’s application of different substantive laws to:

the main claim,

and the set-off defence

Held that this does not violate procedural equality

VII. Evidentiary Treatment and Burden of Proof

1. Allocation of Burden

Swiss tribunals consistently hold:

the party invoking set-off bears the burden of proving:

existence,

enforceability,

and maturity of the counter-claim.

SFT Decision 4A_360/2011

Confirmed tribunal’s discretion in:

evaluating evidence for counterclaims and set-offs

No violation of due process arises from rigorous evidentiary scrutiny

VIII. Counterclaims and Procedural Equality

1. Right to Be Heard

Swiss courts focus on whether:

the opposing party could respond,

sufficient time was granted,

procedural balance was preserved.

SFT Decision 4A_46/2011

Rejected a challenge alleging unequal treatment

Reaffirmed that:

“The right to be heard does not include a right to have a counterclaim decided in a particular procedural form.”

IX. Public Policy and Set-Off / Counterclaims

Public policy challenges relating to counterclaims or set-offs are exceptionally rare.

SFT Decision 4A_558/2011

Clarified that:

erroneous acceptance or rejection of a counterclaim

misapplication of set-off rules
does not amount to a violation of international public policy

X. Review Standard of the Swiss Federal Tribunal

The SFT:

does not reassess jurisdictional interpretations unless manifestly untenable,

does not re-evaluate evidence or quantum,

does not correct substantive law errors.

SFT Decision 4A_312/2017

Reaffirmed that:

“The Federal Tribunal is not a court of appeal on counterclaims or defences raised in arbitration.”

XI. Consolidated Case Law Table

XII. Practical Takeaways

Counterclaims require jurisdiction; set-offs may not.

Broad arbitration clauses favour admissibility of counterclaims.

Timing matters—late counterclaims risk exclusion.

Set-off is a defence, not an independent claim.

Swiss courts intervene only in cases of serious procedural failure.

XIII. Conclusion

Swiss arbitration law provides a predictable, party-autonomy-driven framework for counterclaims and set-offs:

jurisdictional discipline,

procedural flexibility,

strict evidentiary standards,

minimal judicial interference.

This makes Switzerland particularly attractive for complex, multi-claim commercial arbitrations involving finance, construction, energy, and long-term supply relationships.

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