Beware of Hasty Set-off

The key findings of Katalin Meier's and my most recent article are:

(i) Set-off declarations may lead to the irrevocable acknowledgment of a countervailing claim. To avoid such a legal consequence, set-off must only be declared as defense in legal proceedings together with an explicit statement that it is only made as a subsidiary submission.

(ii) The highest Swiss Court acknowledges a growing trend in international arbitration to generally accept arbitral jurisdiction for set-off defenses.

(iii) It appears to be reasonable to ask from a respondent, who relies on procedural advantages in connection with a subsidiary set-off defense, to comply with the applicable procedural requirements (e.g. to pay an advance on costs).

SEE ARTICLE