Key Point

Conciliation proceedings (ein Schlichtungsversuch vor einer Schlichtungsbehörde) in Switzerland constituted proceedings before a court for the purposes of article 27(1) of the Lugano Convention and had those proceedings not already been dismissed in Switzerland a stay of English proceedings on the same subject matter would have been granted.

The facts

D applied for a stay of proceedings issued by Lehman Brothers Finance AG in relation to termination of an ISDA Master Agreement in England on the basis conciliation proceedings had already begun in Switzerland on the same issue. Those conciliation proceedings had been dismissed subject to D having a right of appeal. Lehman argued that the conciliation was not a proceeding before a court for the purposes of the Lugano Convention.

Decision

The Court held that the conciliation proceedings fell within articles 27(1) and 30 of the Lugano Convention and that the Convention should be construed broadly to give effect to its objective of avoiding duplication of process. On the facts the Swiss proceedings had been dismissed so no stay was ordered subject to review if D appealed later.

Comment

This is the first case in which conciliation proceedings of this type have been considered before the English courts in the context of the Lugano Convention.

Lehman Brothers Finance A.G. (In liquidation) v Klaus Tschira Stiftung GmbH