The Swiss Federal Supreme Court will have to judge whether the transfer of data on 300 UBS clients to the US authorities was lawful.

A ruling last week by the federal administrative court which said it was unlawful for FINMA to make UBS hand over client details to the US authorities, has been subsequently referred to the country's highest court.

FINMA is the Swiss financial regulator.

The referral will clarify the extent of FINMA's legal latitude in crisis situations, the regulator said in a statement yesterday.

Under Swiss banking law, it is illegal for bankers to disclose client data without legal authority. The country's bank secrecy laws, which in their modern guise date back to 1934, have been under pressure as governments such as those of the UK, US and Germany intensify their pursuit of alleged tax evaders. Tax evasion is not a crime under Swiss law, although tax fraud is an offence.

On 5 January this year, the federal administrative court, as the court of first instance, ruled that FINMA's controversial order of February 2009 to disclose UBS client data to the US authorities was unlawful.

The court said that the data should not have been disclosed due to insolvency provisions of the Swiss Banking Act.

FINMA, after consulting the Swiss government, had ordered UBS in February 2009 to disclose client data to the US authorities, as it considered this the only way to avoid the threat of US authorities starting proceedings against the bank, the regulator said.

It believed that not doing so would have endangered the existence and seriously worsened the liquidity situation of UBS, which would have had an unpredictably negative impact on the Swiss economy.

The decision by the regulator to do so was based on articles of the Swiss Banking Act, which obliges the regulator to impose what it called in its press statement “unspecified preventive measures if it has reasonable grounds to suspect serious liquidity problems”.