Trust in Suisse

Monday, 12 September 2016
A review of the final Rybolovlev decision, in which the Geneva Court of Appeal clarified the interface between the Hague Convention and matrimonial law, as well as the date for valuating marital assets settled in trust.

A review of the final Rybolovlev decision, in which the Geneva Court of Appeal clarified the interface between the Hague Convention and matrimonial law, as well as the date for valuating marital assets settled in trust.


  • The Rybolovlev case reaffirms Swiss courts’ willingness to recognise trusts and apply the Hague Convention on the Law Applicable to Trusts and on their Recognition, even in complex disputes. Spouses will find it more difficult to successfully challenge the validity of transfers of marital assets into trusts.
  • Marital assets settled in trust may be taken into account for calculating the debt owed by the settlor spouse in case of divorce, but they should be valued at the time of the settling in trust rather than at the date of the divorce petition.
  • Recommending a pre- or post-nuptial agreement, especially in complex cases, remains the rule.

The spouses, Mr Dmitri Rybolovlev (Mr R) and Mrs Elena Rybolovleva (Mrs R), both Russian citizens, were married in Russia in 1987, but did not enter into a marital agreement at that time. They had both been resident in Geneva since 1995. Mr R had a considerable fortune, calculated in billions of Swiss francs, which he acquired subsequent to the marriage through his professional activity.

In April 2005, Mr R submitted to his wife a draft post-nuptial agreement based on the Swiss rules governing the ordinary marital regime of participation in acquired property,1 but containing a number of exceptions detrimental to his wife (this is permitted by Swiss law but subject to agreement between the spouses). Mrs R refused to sign this agreement.

In June 2005, unbeknown to his wife, Mr R created two irrevocable and discretionary trusts (the trusts) governed by Cyprus law, to which he transferred, for no consideration, the shares he held in various companies. The main beneficiaries of the trusts were Mr R together with his two daughters, to the exclusion of his wife. In his letters of wishes, Mr R mentioned that, if his wife was not a potential beneficiary of the trusts, it was because she would be a substantial beneficiary under his will (executed in December 2002, which appointed her as heir for five-eighths of his estate, and their two daughters for the remainder). Moreover, Mr R was also initially appointed as protector of the trusts, until his replacement by a third party in 2010. Furthermore, according to the trust deeds, Mr R retained the powers to appoint or revoke the trustees, add or exclude beneficiaries, and nominate special companies.

According to Mr R, he created the trusts to protect certain assets from foreign attachment orders, while retaining certain management powers over those assets. In particular, he wanted to protect himself from the Russian government, which had reopened an investigation into a 2006 environmental accident at a mine operated by a company that he indirectly owned.

In December 2008, Mrs R filed a divorce petition in the Court of First Instance in Geneva, requesting inter alia the liquidation of the marital property regime. She also requested an order compelling her husband to provide her with an inventory of all assets which he directly or indirectly held, as well as all relevant information relating to all companies, trusts and other entities directly or indirectly owned by him.

The interim measures

Mrs R brought proceedings against her husband, seeking an order for the provisional attachment of various paintings, a yacht and real-estate property owned by Mr R, directly or indirectly through offshore companies, as well as the bank accounts held by him and/or of which he was the beneficial owner.

In particular, by application of 29 December 2008, Mrs R brought proceedings against her husband, seeking an order for the provisional attachment of various assets held by him and/or of which he was the beneficial owner – until the rendering of a final and enforceable judgment concerning the liquidation of the marital property.

Between 29 and 31 December 2008, Mrs R also brought five legal actions in the British Virgin Islands, Cyprus, London, Singapore and the US for the attachment of assets directly or indirectly owned by her husband. The various courts made freezing injunctions against Mr R and the companies of which he was the beneficial owner, prohibiting them from moving their assets abroad, disposing of them or reducing their value.

In August 2009, the Geneva Court of First Instance rejected Mrs R’s application for provisional attachment, holding that she had proved neither the existence of a serious and imminent risk of disappearance of the marital assets, nor that the assets were owned by Mr R. Mrs R appealed this decision in September 2009.

In March 2010, the Geneva Court of Appeal ordered the provisional attachment of some assets (paintings, furniture, yacht, real estate, bank accounts and shares) held directly by her husband or indirectly through offshore companies or trusts.2 In turn, Mr R appealed this interim order, further to which the parties allegedly held lengthy negotiations.3

On 26 April 2012, the Federal Supreme Court of Switzerland rendered its decision on these interim proceedings.4 It held that assets settled by one Swiss-resident spouse into trust to place them beyond the other spouse’s reach could be attached in the scope of a Swiss interim proceeding to guarantee the former spouse’s share in the marital property, and that Swiss courts had jurisdiction to order interim measures (even) over assets held abroad.5 At the time, this decision attracted some criticism from outside Switzerland.6 Swiss academics, however, were more measured in their analysis: they unanimously recalled that the Supreme Court enjoyed limited power to review such appeals (summary procedure, based on prima facie evidence only and further limited to violations of constitutional rights).7 They also stressed the extreme facts of the case and the temporary nature of the order granted,8 which led some authors to compare the decision to an Olivier salad.9 Professor Luc Thévenoz even went on to forecast the decision on the merits, planning on the recognition of the trusts and the application of Cypriot trust law.10

The proceedings on the merits

After fighting on the interim measures for three and a half years, the spouses finally debated their cases’ merits, and in particular the liquidation of their marital property. Thus, on 13 May 2014, the Geneva Court of First Instance awarded Mrs R CHF4 billion, holding that the property settled in trust should be added to Mr R’s acquired property at its market value at the time of liquidation of the marital regime in December 2008.11

However, on 5 June 2015, the Geneva Court of Appeal rendered its judgment on appeal,12 reducing Mrs R’s marital-property claim from CHF4 billion to CHF564 million.13 In short, the Court took into account the value of the marital assets at the date of their settlement in trust (CHF1.2 billion in June 2005), rather than at the date of the divorce petition (the alleged CHF8 billion in December 2008).

The final divorce judgment

This significant judgment, relating to trusts in a Swiss divorce, constitutes the final chapter of the ‘divorce of the century’, as the parties settled on 20 October 2015 for an undisclosed amount.14 As it stems from the Geneva Court of Appeal – the same court that granted the interim order – it is worth contrasting its reasoning with the 2012 interim order.15

According to the Swiss Private International Law Act (SPILA), Swiss law governs not only the divorce of Swiss-resident spouses, but also the related matters to this divorce.16 However, it does not necessarily apply to all the preceding matters, including the nature of the legal relations between each spouse and third parties or structures such as companies or trusts. Thus, the trusts settled by Mr R are subject to the law chosen for this purpose.17 Under article 22 of the Hague Convention on the Law Applicable to Trusts and on their Recognition (the Hague Convention), these rules are applicable regardless of the date on which each trust was created. In this case, Cypriot substantive law is therefore applicable to determine the validity of each trust concerned, and its interpretation, administration and effects.18

Extent of Hague Convention article 15 under Swiss marital law

As to the boundary between the (Swiss) law governing the marital regime and the law applicable to the effects of trusts, Hague Convention article 15 applies, and one must therefore apply the substantive provisions of Swiss law on marital regimes, provided they cannot be derogated from by a voluntary act.

Given the spouses’ marital regime,19 acquired property (still) owned by them must be stated at its market value at the time of the divorce petition,20 whereas assets added to the acquired property are stated at the market value on the day of their alienation.21 Further, for calculation purposes, one must claw back or add to such acquired property:

  • assets disposed of without consideration by one spouse, without the other’s consent, during the five years preceding the dissolution of the regime;22 and
  • assets alienated by one spouse during the regime with the intention of diminishing the other’s share.23

In particular, settling an irrevocable discretionary trust represents a disposal without consideration, with the spouse (even when they are the beneficiary of the trust) losing ownership of their acquired property to the trustees without acquiring an actual claim against them. Thus, article 208 of the Swiss Civil Code (SCC) is a mandatory provision for Hague Convention purposes.

Relevant date for valuing marital assets settled in trust

For each acquired property owned by a spouse at the time of the divorce petition, any increase – or decrease – in value, up until the final cantonal judgment, is relevant for calculating the liquidation debt due by each spouse.20 However, this is not the case for acquired assets that the spouse disposed of without consideration, prior to the divorce petition, without the other spouse’s consent during the five years preceding the regime dissolution;22 in such a case, their value is determined on the day on which it is alienated as per SCC article 214 (2).

More specifically, under Swiss marital law: each spouse can freely and validly dispose of their acquired property; spouses can lawfully agree a different valuation of their acquired property and/or a different date for this valuation; and practical difficulties exist in stating the current value of assets alienated a long time ago to a third party who refuses to give information regarding any variation in value. Thus, for the Court:

‘In accordance with art15 [Hague Convention], the effects of the trust therefore prevail over any effect of variations in value of the acquired property settled in an irrevocable discretionary trust… In other words, there is no reason, in an international context involving an irrevocable discretionary trust, why the valuation date prescribed by art214 (1) SCC [date of divorce petition] should prevail over that prescribed by art214 (2) SCC [date of alienation].’

Moreover, there is no reason to construe SCC article 214 (1) as prescribing the inclusion of all the assets that are owned by the trustees, but over which the settlor spouse has maintained de facto control, due to the extensive powers of intervention provided by the applicable legislation for the trust and/or due to their particularly effective influence over the trustees and/or the protector. Furthermore, SCC article 214 (1) is neither public policy in the sense of Hague Convention article 18, nor a norm of immediate application in accordance with Hague Convention article 16.24 Thus, the value of the marital assets at the time of their settling in trust must be used, to the exclusion of any differing, later value.


Swiss courts have long shown a positive approach in correctly applying the Hague Convention, and the Rybolovlev decision demonstrates how well they recognise trusts in complex disputes; on the merits, foreign trusts are recognised in Switzerland pursuant to the Hague Convention. Further, to the extent spouses are subject to some form of marital claw-back (as per SCC article 208), marital assets settled in trust are taken into account for calculating the debt owed by the settlor spouse in the liquidation of the regime. However, these assets will be valued at the time of the settling in trust (not at the date of the divorce petition), meaning that any subsequent change in value of the trust assets remains beyond the other spouse’s reach. In any event, recommending a pre- or post-nuptial agreement remains the gold standard, especially where spouses can agree a different value of their assets and/or a different valuation method in a way that will bind the competent family courts.

  • 1. ‘Participation aux acquêts’ of article 196 ff, Swiss Civil Code (SCC)
  • 2. Turning to the possibility of restraining a spouse in disposing of his assets, the Court recalled that it could order appropriate and commensurate conservative measures. In particular, considering that the trusts were settled only one month after Mrs R refused to sign a post-nuptial agreement, that she had been expressly excluded from the class of beneficiaries, that the assets in trust were highly movable, and that her inheritance expectancy under Mr R’s will was too uncertain, the Court decided to grant the attachment
  • 3. It is reported that Mr R repeatedly offered Mrs R USD800 million as a settlement
  • 4. Judgment of the Federal Supreme Court of Switzerland of 26 April 2012 in the matter of Rybolovlev v Rybolovleva, 5A_259/2010
  • 5. For the English translation, cf David Wallace Wilson and Julie Wynne, ‘Switzerland – Rybolovlev v Rybolovleva’, International Trust and Estate Law Reports, Vol15, Part 4, pages 554–583. For the case report, cf David Wallace Wilson and Julie Wynne, ‘The Swiss connection: the Rybolovlev v Rybolovleva case’, Trusts and Estates Law & Tax Journal, No144 (March 2013)
  • 6. Graham Toby, ‘The Hague Trusts Convention five years on: the Swiss Federal Supreme Court’s decision in Rybolovlev v Rybolovleva’, Trusts & Trustees, Vol18 No8, page 746 ff; Contra Tetiana Bersheda, ‘The long-awaited decisions of the Swiss Supreme Court on recognition of foreign trusts: are they also far-reaching?’, The Journal of International Tax, Trust and Corporate Planning, Vol19 No4, page 288
  • 7. Tetiana Bersheda, ‘Quelques questions de droit international privé en relation avec la reconnaissance de trusts en Suisse’, Pratique juridique actuelle (PJA/AJP) 1/2013, page 45 ff at page 47–48; Julien Perrin and Matthew Shayle, ‘Trusts et restrictions au pouvoir de disposer dans le cadre d’un divorce en Suisse’, Jusletter (5 September 2013), page 3 and page 11
  • 8. Luc Thévenoz, ‘Les trusts sont-ils effectivement reconnus en Suisse? Un bilan sept ans après la ratification de la Convention de La Haye sur les trusts’, Revue suisse de droit des affaires et du marché financier (RSDA/SZW) 2/2014, page 161 ff
  • 9. David Wallace Wilson and Julie Wynne, ‘Trusts et divorce: la salade russe de Rybolovlev c Rybolovleva’, Not@lex, Vol1/13, pages 14–23
  • 10. Thévenoz, page 168
  • 11. Pierre-Alexandre Sallier, ‘L’ex-femme d’un oligarque obtient 4 milliards à Genève’, Le Temps (20 May 2014)
  • 12. Judgment of the Geneva Court of Appeal of 5 June 2015 in the matter Rybolovlev v Rybolovleva. In 2016, the Geneva judiciary authority authorised the author to publish the judgment’s reasoning, albeit redacted, for the Trust Quarterly Review
  • 13. Myret Zaki, ‘Elena Rybolovlev obtient 564 millions au lieu de 4 milliards’, Bilan (11 June 2015); Alexis Favre, ‘Epoux Rybolovlev: le divorce du siècle revu à la baisse’, Le Temps (12 June 2015), page 8; Alexis Favre, ‘Ces trusts étrangers qui défient la Suisse’, Le Temps (29 June 2015)
  • 14. Mehdi Atmani and Alexis Favre, ‘Le divorce du siècle entre les époux Rybolovlev se solde à l’amiable’, Le Temps (20 October 2015)
  • 15. Tina Wüstermann and Delphine Pannatier Kessler, ‘Trusts in the context of Swiss divorce proceedings’, Trusts & Trustees, Vol17 No9, page 883 ff
  • 16. Swiss Private International Law Act (SPILA), articles 61 (1), 63 (2) and 54 (1)
  • 17. SPILA, article 149c (1); the Hague Convention on the Law Applicable to Trusts and on their Recognition (the Hague Convention), article 6
  • 18. The Hague Convention, article 8
  • 19. SCC, articles 181 and 197 (1) and (2.1)
  • 20. a. b. SCC, article 214 (1)
  • 21. SCC, article 214 (2)
  • 22. a. b. SCC, article 208 (1)
  • 23. SCC, article 208 (2)
  • 24. For the Swiss public policy provisions cf SPILA, articles 17 and 18
Author block
David Wilson

David Wilson TEP is a Partner at Baker Plat.

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