Insolvency and international cooperation in insolvency matters have been subject to recent developments, particularly in the European Union but also internationally, as mandated by the UNCITRAL. Switzerland however, did not participate in these modernization processes, except in the banking field. Switzerland has now adopted modern and competitive regulations, thereby unifying the entire applicable legislative system.
European law (Regulation 1346/2000 and, subsequently 2015/848) has long provided for the principle of automatic recognition of decisions initiating insolvency proceedings against a debtor and other related decisions, "without further formality'.
This is not the case in Switzerland, whose private international law has always strictly enshrined the principle of "flexible" territoriality. Pursuant to law prior the legislative amendment, any foreign bankruptcy order, or any other related decision, was subject to formal judicial recognition proceedings before the decision in question could be applied in Switzerland, and access to the debtor's assets located in Switzerland could be authorized. Further, recognition was not automatic, as certain conditions had to be met.
The Swiss Parliament has recently adopted new rules aiming at facilitating the recognition of bankruptcy and related decisions, to simplify the recognition proceedings and to improve coordination with foreign proceedings.
2 CURRENT PROCESS OF RECOGNITION
2.1 CONCERNED DECISIONS
The recognition and enforcement of foreign insolvency decisions in Switzerland is governed by Articles 166 et seq. of the Federal Act on Private International Law of 18 December 1987 (PILA). Bankruptcy judgments rendered by foreign Courts fall within the material scope of application of the aforementioned provisions. Other judgments similar to bankruptcy judgments, rendered in the event of insolvency, or any provisional measures applicable in the event of insolvency, shall also be recognized and enforced in accordance with these provisions.
Articles 166 et seq. PILA constitutes a specific corpus of laws, which applies exclusively to insolvency decisions. Foreign decisions related to insolvency proceedings are outside the material scope of application of the Lugano Convention. Decisions issued due to the insolvency of the debtor, having the effect of limiting the debtor's capacity to dispose of its assets, for the purpose of instigating liquidation or forced restructuring of its debt, typically consist of bankruptcy judgments or similar decisions.
Foreign judgments against a debtor who is active in the financial markets sector, an activity subject to authorisation, are recognized under the Federal Act on banks and saving banks, and according to the FINMA's ordinance on bank insolvency. Those decisions remain outside of...