Introduction
Facts
Decision
Comment
The recognition and enforcement of foreign judgments in Switzerland is governed by the Federal Act on Private International Law (PILA) unless there is an international treaty which takes precedence.(1) One of the most important treaties which takes precedence over the PILA is the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Lugano Convention), to which Switzerland is a signatory.
Articles 33 et seq and 38 et seq of the Lugano Convention provide for the requirements of the recognition and enforcement of judgments issued in a state bound by the Lugano Convention.
In a recent decision, the Swiss Federal Supreme Court confirmed its previous practice regarding a specific requirement contained in article 38(1) of the Lugano Convention. According to article 38(1) of the Lugano Convention, a judgment issued in a state bound by the Lugano Convention must be enforceable in that state in order to be declared enforceable in another state bound by the Lugano Convention.
A claimant obtained a judgment against a defendant in Germany for the payment of approximately 1.5 million Swiss francs plus interest. He then started debt enforcement proceedings in Switzerland based on the German judgment. The defendant objected to the enforcement on the basis that the requirements of article 38(1) of the Lugano Convention had not been met. Specifically, the defendant argued that the German judgment was not yet enforceable in Germany without an additional intermediate step as its former company name was mentioned in the judgment, not its current name.
After both the District Court Meilen and High Court of the Canton of Zurich dismissed the defendant's objection, the defendant filed an appeal with the Federal Supreme Court. The Federal Supreme Court dismissed the defendant's appeal with decision of 19 November 2021.(2)
The Federal Supreme Court held that the concept of enforceability of a foreign "Lugano judgment" in the state that issued the judgment constitutes enforceability from a formal point of view (so-called "abstract enforceability"). This concept does not refer to the conditions under which the judgment can be enforced in the state issuing the judgment. Referring to one of its previous decisions,(3) the Federal Supreme Court stated that the enforceability according to article 38(1) of the Lugano Convention does not mean that all the requirements of the enforcement procedure of the state issuing the judgment must be fulfilled in the sense that the creditor can proceed immediately to actual enforcement. This is because the enforcement proceedings take place in another state (ie, in the state in which the recognition and enforcement of the foreign judgment is sought).
The Federal Supreme Court further considered that the defendant could not demonstrate that enforcement in Germany would require an additional step if the enforcement authority could confirm the identity of the parties based on its own investigations. Here, it was clear from the commercial register (and also undisputed in the proceedings) that the defendant was identical to the party mentioned as the defendant in the German judgment (despite the fact that the defendant had changed its name before the German judgment had been issued).
Against this background, the Court concluded that an additional confirmation obtained by the German authorities was not necessary to enforce the German decision in Switzerland.
While the Federal Supreme Court clarified in its decision that the enforceability according to article 38(1) of the Lugano Convention does not depend on the requirements of the enforcement proceedings of the State issuing the judgment, it still considered those requirements in its decision.
This is probably because the issue at hand (ie, the determination of party identity) is regularly relevant both in domestic as well as foreign enforcement proceedings.
In any event, enforceability according to article 38(1) of the Lugano Convention should not depend on specific requirements of the enforcement proceedings of the state issuing the judgment.
For further information on this topic please contact Cyrill Kaeser at Lenz & Staehelin by telephone (+41 450 80 80) or email ([email protected]). The Lenz & Staehelin website can be accessed at www.lenzstaehelin.com.
Endnotes
(2) Federal Supreme Court decision of 19 November 2021 [5A_21/2021].
(3) Federal Supreme Court decision of 23 August 2017 [5A_934/2016].