10 July 2023

Statutory foundation supervisory complaint

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With the new foundation law, enter into force on 1 January 2024, the foundation supervisory complaint will be regulated by law for the first time. The circle of persons entitled to file a complaint will be conclusively defined.

  • Dr. Roman Cincelli

    Senior Legal Associate

Current applicable law

Under current law, the foundation supervisory complaint is not explicitly regulated. Doctrine and case law derive the foundation supervision complaint from art. 84 para. 2 CC, according to which the supervisory authority must ensure that the foundation assets are used in accordance with its purposes. Due to their legal form, foundations are subject to supervision under public law, which must ensure that the will of the founder is observed and thus that the foundation object is realized. Supervision is also intended to ensure that the foundation is able to function.

In addition to supervision by the supervisory authorities, certain persons may file a complaint with the competent supervisory authority against acts or omissions of the foundation bodies that violate the law or the articles of association and demand that the supervisory authority takes action.

The necessity of a foundation supervisory complaint is justified by the fact that without such a complaint, there would be no possibility of challenging conduct of the foundation bodies that is in breach of duty and having it reviewed by courts. This contrasts with the simple complaint, which is also derived from art. 84 para. 2 of the Civil Code, where anyone can file a complaint with the supervisory authorities, even without proof of interest, without the person filing the complaint having any party rights in the proceedings or the possibility of further appeal.

The Swiss Federal Supreme Court stated in BGE 107 II 385 that the possibility of a foundation supervision complaint contributes to a more careful exercise of foundation supervision, which guarantees an effective control of the foundation bodies. Consequently, the function of the foundation supervisory complaint is to ensure sufficient legal protection, which is why the circle of persons entitled to file a complaint is to be drawn broadly and is to ensure sufficient legal protection for those persons who, in the absence of a corresponding legal or statutory provision, cannot assert legal claims against the foundation by way of civil action. However, the Swiss Federal Supreme Court refrained from specifying the circle of persons entitled to file an appeal.

In a recent decision (BGE 144 III 433), the Swiss Federal Supreme Court recalled its case law on the prerequisites and the right to appeal in the context of a foundation supervision complaint. Thus, the foundation supervision complaint presupposes an own interest of the complainant in the ordering of the measures demanded by him. Consequently, any person who may once be in a position to obtain a benefit or other advantage from the foundation must be legitimized to file a complaint. However, since the circle of beneficiaries can be very large in foundations, sometimes even unlimited, Swiss Federal Supreme Court case law provides that only those who have a «special proximity» to the foundation and are «particularly affected» by a contested decision and can demonstrate a worthy interest of protection in its annulment or amendment are entitled to file a complaint as beneficiaries. Under the same conditions, the legitimacy of members of the foundation council and the founder is sometimes affirmed. Furthermore, applying the relevant case law, it is conceivable that other persons who have a special relationship with the foundation may also be entitled to file a complaint, which must always be assessed on a case-by-case basis.

New law (as of 1 January 2024)

On the occasion of the revision of the foundation law and the associated codification of the foundation supervision complaint, those persons who have a «justified interest in control» that the administration of the foundation is in compliance with the law and the articles of association should have a right of complaint.

However, in order to address the issue of legitimacy, Swiss Parliament decided to discard the concept of a legitimate interest in control and to include in the law an exhaustive list of persons who have a right to file a complaint. Accordingly, beneficiaries or creditors of the foundation, the founder, sub-founders and former and current members of the foundation council who have an interest in ensuring that the administration of the foundation complies with the law and the foundation deed may file a complaint with the supervisory authority against acts and omissions of the foundation bodies.

Even though such an (exhaustive) list of persons entitled to appeal is to be welcomed for the sake of legal certainty, especially in comparison to the previous, often unclear right of appeal, the wording of art. 84 para. 3 CC has already been heavily criticized in the doctrine even before it has entered into force. In particular, the too narrowly defined list, which appears arbitrary and was further narrowed during the parliamentary negotiations, gives rise to discussions. Under the new law, the heirs or descendants of the founder, as well as other foundation bodies, such as supervisory and electoral bodies, are excluded from the right to file a foundation supervisory complaint.

The fact that only an «interest» instead of a «legitimate interest» is now sufficient to be entitled to file a complaint is also considered unfortunate by some scholars. Instead of keeping the circle of persons entitled to file a complaint broad and tying their right to a legitimate interest in order to prevent a popular complaint, the legislator has instead decided to limit the circle of persons entitled to file a complaint, who only must have a simple interest. Irrespective of this, it will ultimately continue to be left to the court under which conditions an interest in filing a foundation supervisory complaint is affirmed.
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