Enforcing Foreign Judgments And Awards

Author:Mr Urs Feller and Marcel Frey
Profession:Prager Dreifuss
 
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Securing a court victory is a significant step in obtaining what one is owed. Parties frequently realise though that winning in court is by no means the end of the road, but rather the beginning of another journey called enforcement. Enforcing a decision in another country can be fraught with additional practical difficulties, technical challenges and may entail time consuming proceedings.

Switzerland, with its central location in Europe, its traditional role as a safe haven for assets and attractive business environment for multinational corporations, is frequently the showground for cross-border enforcement proceedings. Swiss courts have a wealth of practical experience, and legislation and jurisprudence is sound and stable. The court practice of locating assets of a foreign debtor held with a Swiss bank at the branch in Switzerland further increases the attractiveness of Switzerland as a place of enforcement.

The growing interlinkage between Switzerland and its neighbouring countries, and throughout the world through multinational trade, has given rise to multinational agreements facilitating simpler recognition and enforcement of foreign judgments and awards.

Foreign decisions

In this article, foreign decisions will include both state court judgments and awards by privately convened arbitral tribunals. Although both types of decisions are, in principle, enforced similarly and by the same authorities in Switzerland, whether a decision originates from a state judicial institution or from an arbitrator determines the legal basis on which enforcement may be requested. Further, the geographic region from which a decision emanates has an influence on the applicable set of rules governing its enforcement.

Switzerland, though not a member of the European Union, is a signatory party to the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, concluded between the European Community, Denmark, Iceland and Norway and Switzerland in Lugano in 2007 (Lugano Convention). Its aim is to facilitate the recognition of judgments between these states without lengthy court proceedings. Enforcing an English or German court judgment in Switzerland is thus - as a rule - simpler and quicker than enforcing an overseas counterpart.

State court decisions from non-Lugano Convention states are enforced according to the provisions contained in the Swiss Federal Act on International Private Law (PILA) which contains somewhat stricter recognition hurdles than the Lugano Convention.

International arbitral awards are enforced under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, ratified in New York in 1965 (New York Convention). According to the PILA, all international arbitration awards are recognised and enforced under the New York Convention, regardless of whether the state at the seat of arbitration is a signatory member of the New York Convention or not.

Enforcement of monetary and non-monetary decisions

In Switzerland, the method of enforcement will depend on whether the foreign decision grants its beneficiary a financial reward or some other type of relief. Under Swiss law, monetary decisions are enforced under the rules of the Federal Debt Enforcement and Bankruptcy Act (DEBA) whilst nonpecuniary decisions (decisions changing the status of a matter, ordering a rectification in a register, or requiring a party to perform or...

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