On October 14 2015 the Federal Council published a revision project for the Private International Law Act regarding the recognition and coordination of foreign bankruptcy proceedings in Switzerland (for further information please see "Proposed revamp of provisions on recognition of foreign bankruptcy proceedings"). In the same project, the Federal Council also proposed amending the Debt Enforcement and Bankruptcy Act in order to take into account foreign proceedings regarding a claim in the bankruptcy proceedings of a Swiss debtor.
When bankruptcy proceedings are opened over a Swiss debtor, the trustee will establish a list of claims based on the claims filed in the insolvency proceedings. If the claim filed is subject to pending proceedings in Switzerland which have not yet led to a decision, the trustee will list it as a 'pro memoria claim' in the list of claims and the pending proceedings will be stayed until the trustee decides whether to pursue them. If the decision is taken to continue the pending proceedings, the competent court will rule on the claim. The decision will be considered binding and will be taken into account in the list of claims.
When a claim filed in the insolvency proceedings of a Swiss debtor is subject to foreign pending proceedings that have been initiated before the opening of the bankruptcy proceedings, but have not yet led to a decision, the trustee cannot formally list the claim as a pro memoria claim. The trustee must decide independently from the pending foreign proceedings on whether the claim must be admitted in the debtor's bankruptcy. Case law from recent years shows the complexity of coordinating or taking into account foreign decisions on a claim in Swiss bankruptcy proceedings (for further information please see "SAirGroup's debt restructuring liquidation leads to new decision" and "Ruling against Sabena shareholders in debt restructuring liquidation").
The Federal Council has proposed a step towards coordination between foreign lawsuits and Swiss insolvency proceedings. It intends to create a new provision in the Debt Enforcement and Bankruptcy Act which obliges the Swiss trustee to:
- list a claim which is subject to foreign pending proceedings as a pro memoria claim in the list of claims; and
- take into account the foreign judgment in the Swiss insolvency proceeding.
However, this new provision will apply only if the foreign proceedings have been initiated before opening bankruptcy proceedings in Switzerland and if it is to be expected that the foreign court will, within a reasonable time, render a decision capable of being recognised in Switzerland.
According to the Federal Council's proposition, foreign pending proceedings will, to a certain extent, be finally taken into account in Swiss insolvency proceedings. However, the prerequisite that the foreign court is likely, within a reasonable time, to render a decision capable of being recognised in Switzerland, leaves room for interpretation and thereby undermines the proposed new rule's efficiency.
For further information on this topic please contact Sabina Schellenberg or Stéphanie Oneyser at FRORIEP by telephone (+41 44 386 6000) or email (email@example.com or firstname.lastname@example.org). The FRORIEP website can be accessed at www.froriep.com
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