Claim of the Bank against the Guarantor for Fulfillment of the Joint and Several Guarantee

Facts

On April 11, 1990, A. (the Defendant) signed a publicly notarized joint and several guarantee contract, in which he undertook to the Bank X. (the Plaintiff) to be jointly and severally liable for the Plaintiff's claims against the Z. Holding up to a maximum amount of 25 million Swiss francs. The guarantee contract stipulated that Swiss law shall apply and any disputes shall be adjudicated by the courts of the Canton of Zurich.

With a claim filed on July 1, 1998, the Plaintiff sued the Defendant based on the guarantee contract before the District Court of Zurich for 1 million Swiss francs plus interest. The Defendant requested the dismissal of the claim for lack of jurisdiction.

The District Court of Zurich and the High Court of the Canton of Zurich dismissed the objection of lack of local jurisdiction. The Defendant filed a federal appeal against the decision of the High Court.

Considerations

The Federal Supreme Court dismissed the Defendant's appeal. It stated that the courts of Zurich would also have local jurisdiction based on the place of performance jurisdiction under Art. 113 of the Swiss Federal Act on Private International Law, even in the absence of a jurisdiction agreement.

The Defendant had argued that only the courts at the ordinary place of jurisdiction could decide on the validity of a contract, not the courts at the presumed place of performance. However, the Federal Supreme Court rejected this view. It stated that the jurisdiction of the court at the place of performance does not depend on whether the contract is…