Piercing Trust Structures in Switzerland in Aid of Financial Claims in England

Introduction

Like many civilian jurisdictions, Switzerland does not possess its own domestic law of trusts. Proposals to introduce Swiss trusts into domestic law were rejected by the Swiss Federal Council in 2023. Notwithstanding this, foreign trusts have long been used in Switzerland for estate planning and asset protection purposes.

The recognition of foreign trusts in Switzerland is facilitated by the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition (Hague Trust Convention), which Switzerland ratified in 2007. Swiss courts nevertheless have domestic tools to pierce through foreign trust structures and make orders in respect of their underlying assets. This article examines what those tools are and how they may be deployed in aid of financial remedies proceedings in England.

The Swiss Durchgriff doctrine

The Durchgriff doctrine (or principe de la transparence) is a Swiss legal principle under which courts may, in limited circumstances, look through trust and corporate structures to the individual who controls and/or benefits from the underlying assets.

The doctrine has two elements:

(1) first, there must be an identity between the trust or corporate structure and the individual in economic terms, or at the very least ‘economic domination’ by the individual over the relevant structure;

(2) second, the independent legal status of the structure must be invoked by the individual in an abusive manner, i.e. one which constitutes an abuse of rights by aiming to secure an unfair advantage.

What constitutes an abuse of rights is a matter of broad judicial evaluation. The courts will look for a cumulative set of circumstances demonstrating a concerted effort to cause serious and deliberate prejudice to the rights of another party (typically a creditor). To date, the Swiss Supreme Court has declined to formulate an exhaustive list of circumstances constituting an abuse of rights. It is nonetheless well established that:[[1]]

(1) the structure need not have been created for abusive purposes, provided the use of the structure or the reliance placed on its independent legal character is abusive (e.g. in order to evade legal obligations);

(2) there is no need for there to be a transfer of assets by the individual to the structure, although such a transfer may suggest an abusive purpose (e.g. an attempt to remove assets from the reach of creditors);[[2]]

(3) the absence of strict segregation between the assets of the structure and of the individual is not, on its own, an abuse of rights, although this factor will often point in favour of the lifting of the corporate/trust veil;

(4) the fact that the relevant structure may be insolvent does not, without more, justify lifting the veil, even where the individual is the sole shareholder.

There are parallels between the Durchgriff doctrine and the circumstances in which the corporate veil of a company may be pierced under English law:

(1) the court will only pierce the corporate veil in very limited circumstances (Prest v Petrodel Resources Limited & Ors [2013] UKSC 34, per Lord Sumption at [35]);

(2) the court cannot pierce the corporate veil merely because it is thought to be necessary in the interests of justice (see Ben Hashem v Al Shayif [2008] EWHC 2380 (Fam), per Munby J at [160], cited in Prest v Petrodel at [25]);

(3) the ownership and control of a company by the relevant individual are not of themselves sufficient to justify piercing the veil. There must be an existing legal obligation or liability, which the individual is seeking to evade by interposing a company under his control (Prest v Petrodel at [35]);

(4) there is no need for the company to have been incorporated with a deceptive intent, provided it is being used for the purpose of deception at the time of the relevant transactions (Ben Hashem v Al Shayif at [164], cited in Prest v Petrodel at [25]).

There are important differences, however, with English law. First, English courts will pierce the corporate veil only in respect of corporate entities, whereas the Swiss Durchgriff doctrine may apply to both trusts and companies. Second, courts in England may only pierce the corporate veil where necessary to deprive the company or its controller of an advantage obtained through the company’s separate legal personality (Prest v Petrodel at [35]). The Swiss Durchgriff doctrine is not subject to this constraint, although in practice it is unlikely to be invoked where other legal remedies are available (e.g. challenging the validity of a transfer into trust, which does not require showing an abuse of rights, see below).

Application of the Durchgriff doctrine in the divorce context

The Durchgriff doctrine is commonly invoked in the divorce context:

(1) In Swiss divorce proceedings, a spouse may argue that the court should look through a trust or corporate structure – wherever located – which is said to be controlled by the other spouse in order to bring its underlying assets within the matrimonial pot available for division.

(2) In Swiss enforcement proceedings, a spouse owed sums under a domestic or foreign divorce judgment may seek to enforce said judgment against assets in Switzerland, which have been transferred by the other spouse to a trust or corporate structure in order to frustrate enforcement.

The Durchgriff doctrine can be invoked where:

(1) Swiss law applies in accordance with the relevant rules of Swiss private international law; or

(2) although foreign law should apply, its application would lead to a result that is incompatible with Swiss public policy.

The Durchgriff doctrine may be applied in respect of foreign trusts, offshore companies and other foreign wealth preservation structures (e.g. civil law family foundations), notwithstanding Switzerland’s ratification of the Hague Trust Convention.

The Swiss Federal Court has long emphasised that the doctrine should be applied only in exceptional circumstances. However, the authorities suggest that Swiss courts may adopt a more interventionist approach in divorce and succession disputes, where required to achieve a just outcome.

An illustration: Rybolovlev v Rybolovleva

The leading authority on the application of the Durchgriff doctrine to trust assets in Swiss divorce proceedings is the Swiss Supreme Court decision of Rybolovlev v Rybolovleva 5A_259/2010, 26.04.2012.

The facts were as follows:

(1) The husband (H) was a Russian billionaire. He married the wife (W) in Russia in 1987. H and W moved to Switzerland in 1995. They had two daughters. Upon moving to Switzerland, H and W became subject to the default Swiss matrimonial regime of participation in acquisitions (under which the fruits of the marriage are shared equally upon divorce).

(2) In April 2005, H invited W to enter into a Swiss marriage contract (effectively, a post-nuptial agreement) varying their matrimonial property regime. In simple terms, the effect of the contract was to put some of H’s business assets out of W’s reach. W refused to sign it.

(3) Two months later H settled the bulk of his fortune into two irrevocable discretionary trusts governed by Cypriot law. The trust beneficiaries were the parties’ two daughters and H. W was excluded. H was the protector, retained powers to appoint and remove trustees, to add and exclude beneficiaries and to instruct trustees on how to administer ‘special companies’. The assets settled in trust by H included shares in several offshore companies, which held the bulk of his business assets.

(4) W filed for divorce in Geneva in December 2008. She sought inter alia an in rem freezing injunction in respect of various assets, including the shares in the offshore companies held in trust, in reliance on the Durchgriff doctrine. H argued that: (a) the Swiss court had no jurisdiction to order an in rem freezing injunction in respect of assets located abroad; and (b) in any event, the shares were not his property – the trusts were valid, applying Cypriot law per Article 6 Hague Trust Convention, and the Swiss court was bound to recognise them.

(5) W’s application failed at first instance but succeeded on appeal before the Genevan Court of Justice. Applying the Durchgriff doctrine, the Genevan Court of Justice held that the court could look through the Cypriot trust to freeze the shares in the offshore companies. H appealed to the Swiss Supreme Court.

(6) The Swiss Supreme Court upheld the lower court’s ruling. It held that:[[3]]

(a) the lower court had been justified in applying Swiss law, rather than the proper law of the trust. Given the summary – and often urgent – nature of interim remedies, it was permissible for the court to apply Swiss law in lieu of foreign law where appropriate. Further, per Swiss rules of private international law, Swiss law was in principle applicable to interim measures in divorce proceedings;

(b) the lower court had not reached an arbitrary conclusion by holding that the trust constituted ‘merely an instrument in the hand of the [husband], who has retained extensive management powers and appears to be the main beneficiary, and that in accordance with the economic reality, [the husband and the trust] are identical …⁠’. In light of those factors, the court considered that the discretionary and irrevocable nature of the trust was irrelevant. On the other hand, the timing of the transfers was very relevant;

(c) the court had jurisdiction to grant an interim in rem order in respect of foreign assets. To hold otherwise would be to severely restrict the court’s powers to order interim measures to protect a spouse’s matrimonial rights. The court nonetheless acknowledged that, whether (and, if so, how) the attachment order could be enforced, was another matter.

The decision attracted criticism at the time. In particular, it was said that the Swiss Federal Court’s decision to apply Swiss law was contrary to:

(1) Article 6 Hague Trust Convention, pursuant to which the law of the trust should have governed the question of the trust’s validity, and Article 11 Hague Trust Convention, which compels Switzerland to recognise foreign trusts; and

(2) the Federal Supreme Court’s jurisprudence, which establishes that, in relation to companies, the law of the country where the company was incorporated should govern questions of validity.[[4]]

Against those criticisms, it may be noted that the Swiss court was not purporting to find that the trust was invalid. Rather, the court was lifting the veil for the sole purpose of the interim measures sought, in order to prevent the separate legal character of the trust from being used in an abusive manner.

What the 2012 Swiss Supreme Court decision illustrates is that, in the divorce context, Swiss courts may find ways to deploy domestic tools to pierce structures interposed to defeat a spouse’s financial claim, notwithstanding the requirement that questions of trust validity should be governed by the proper law of the trust under Article 6 Hague Trust Convention. Swiss courts are typically readier to do so at an interim stage where Swiss law normally applies and where the court has limited time to assess the evidence.

Other tools available to reach through a trust in divorce proceedings

There are other tools available to spouses seeking to pierce a wealth-holding structure. Spouses may challenge the validity of the transfer into trust – an issue which falls outside the scope of the Hague Trust Convention (cf. Article 4) – in order to add back assets into the matrimonial pot and/or in support of an argument as to the other spouse’s resources. Such a challenge will typically involve arguments that, notwithstanding the transfer, the spouse has continued to treat and enjoy the asset(s) as his own.

Spouses may also argue that, in application of the proper law of the trust (per Article 6 Hague Trust Convention), the trust is a sham. A party seeking to deploy such an argument before a Swiss court will need to adduce compelling evidence of the foreign law governing the trust. Where the court is not satisfied that foreign law has been sufficiently proved, or where the application of foreign law would result in an outcome incompatible with Swiss ordre public, the court will apply Swiss law.[[5]]

How might the Swiss courts’ powers to pierce structures assist a financial remedy claim in England?

Swiss interim freezing orders in aid of proceedings in England

A party to financial remedy proceedings in England may need to obtain urgent preservation measures in order to protect against the risk of dissipation of assets located in Switzerland. To that end, they may apply for an interim worldwide freezing injunction in England and seek permission to enforce it in Switzerland (applying the guidelines in Dadourian Group International Inc v Simms [2006] EWCA Civ 399 at [25]). Enforcing an English interim worldwide freezing order (WFO) in Switzerland is not straightforward, however:

(1) there is no bilateral or international treaty facilitating the recognition and enforcement of English WFOs in Switzerland;

(2) the recognition and enforcement of an English WFO in Switzerland is therefore governed by domestic rules of Swiss private international law. Whether those rules[[6]] permit the recognition of provisional measures has been the subject of much academic and judicial debate. The position is not settled;

(3) even where a court is prepared to accept that a foreign interim measure can be recognised, other difficulties may prevent recognition, for instance:[[7]]

(a) the court may refuse recognition and enforcement of the WFO against a third party (e.g. a Swiss bank) because they were not a party to the application in England;

(b) the court may find that a WFO is unenforceable for lack of certainty where its terms allow deductions for costs of living, legal fees, etc.

Another option is to obtain a domestic Swiss freezing order in aid of the financial remedy proceedings in England. The Swiss Court has jurisdiction to make such orders where the assets to be frozen are located in Switzerland.[[8]] It will need to be satisfied that the order sought is urgent and necessary, and further that the Swiss court’s intervention is required (e.g. because an order made by the foreign court will not be enforceable in Switzerland). The court has a wide discretion.

As Swiss law applies to interim measures in the divorce context,[[9]] the Durchgriff doctrine may be engaged. Its application can enable a spouse to preserve trust assets located in Switzerland and/or Swiss assets held via corporate structures pending the resolution of the financial remedy proceedings in England.

Enforcement of English financial remedy orders against Swiss trust assets

The Swiss Durchgriff doctrine, and the courts’ other powers to look through trusts, may also assist a spouse seeking to enforce an English financial remedy order against Swiss assets.

A spouse bringing enforcement proceedings against a trustee holding trust assets in Switzerland will need to demonstrate that the assets in question are, in truth, owned by the other spouse (often, the settlor). The Swiss court should apply the law designated by the Hague Trust Convention when determining this question – although there may be ways around this (e.g. in respect of interim measures, such as post-judgment attachment orders in aid of enforcement, or simply where foreign law has not been proved to an adequate standard).

Where the law of the trust is applied, the enforcing spouse will need to establish that the trust is not valid (e.g. because it has not been validly constituted or because it is a sham) under the proper law of the trust. The court will carry out its own analysis of whether the trust is valid under its proper law, independently of any finding that might have been made by the English court.

A finding by the Swiss court that a trust is valid in accordance with its proper law is not, however, the final word in enforcement proceedings. The court may find that the result mandated by the application of the law of the trust (i.e. its recognition as a valid legal entity, the effect of which is remove the relevant assets from other spouse’s hands) is contrary to Swiss ordre public (Article 18 Hague Trust Convention states its provisions may be disregarded where their application would be manifestly contrary to public policy).

The concept of abuse of rights discussed above and the Durchgriff doctrine itself are both considered to be part of the norms of Swiss public policy. The Durchgriff doctrine may therefore enable a spouse to enforce an English financial remedy order against Swiss trust assets, even where the proper law of the trust would normally be applicable in the enforcement proceedings.

Conclusion

The Swiss court has several tools at its disposal to pierce through trust and corporate structures to protect the rights of divorcing spouses. Those tools can be deployed in aid of financial remedy proceedings in England – both during the currency of the proceedings and at the enforcement stage. It is worth considering them at an early stage.[[10]]

[[1]]: ATF 5A_306/2025, 24.09.25 [6.2.1.].

[[2]]: ATF 5A_423/2025, 6.11.2025 [3.4.2.].

[[3]]: Rybolovlev v Rybolovleva 5A_259/2010, 26.04.2012, [7.3.2.2.].

[[4]]: ATF 128 III 346, 07.05.2022.

[[5]]: Swiss Private International Law Act (SPILA), Arts 16 and 17.

[[6]]: SPILA, Art 25.

[[7]]: Decision of the Zürich Obergericht of 14.10.2025, ref. RV240016.

[[8]]: SPILA, Art 10.

[[9]]: SPILA, Art 62(2).

[[10]]: The authors are grateful to Andreas Giannakopoulos, Wilberforce Chambers, for his assistance in preparing this article.

This is an article from the forthcoming Financial Remedies Journal 2026 Issue 1.