In a landmark decision the Swiss Federal Supreme Court ruled that the Lugano Convention remains applicable after Brexit with regard to the recognition and enforcement of UK judgments if such judgments were handed down while the Lugano Convention was still in force (i.e. before 31 December 2020).
The recent decision concerns attachment proceedings which were instituted by the applicants in Switzerland based on a judgment of the High Court of Justice of England and Wales dated 17 October 2019 (the “UK Judgment”), which ordered the debtor to pay to the applicants an amount of GBP 8 million plus interest. The debtor filed appeals against the attachment before the lower courts mainly requesting that the attachment be lifted. Before the Swiss Federal Supreme Court, the debtor, inter alia, argued that in view of Brexit the Lugano Convention was no longer applicable in the pending proceedings. The Swiss Federal Supreme Court upheld the decision of the lower courts and concluded that the Lugano Convention continues to be applicable in the present case.
The Lugano Convention was applicable during the transitional period…
The modalities of the UK leaving the European Union on 31 January 2020 were regulated by the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union which provided, inter alia, for a transitional period until 31 December 2020 during which the UK continued to be treated as a member state of the EU. Therefore, the Lugano Convention was applicable up and until 31 December 2020.
…and remains applicable on recognition and enforcement matters thereafter.
The Swiss Federal Supreme Court first noted that the Lugano Convention does not contain transitional provisions applicable to the present case. It then discussed the published legal doctrine which preponderantly holds the view that the Lugano Convention should continue to apply to foreign judgments rendered while the Lugano Convention was still in force. It further noted that in the present case not only the UK Judgment was rendered before Brexit but the entire proceedings before the lower instances took place before the end of the transitional period, i.e. in a period during which the Lugano Convention was still in force. Hence, Swiss Federal Supreme Court concluded that in the absence of a major public interest which would justify applying the Federal Act on Private International Law (“PILA”) instead of the Lugano Convention, the present case continues to be governed by the Lugano Convention.
The recognition and enforcement-friendly approach of the Swiss Federal Supreme Court is most welcome. The court left politics aside and simply applied the law. The approach ensures that Swiss recognition and enforcement proceedings concerning UK judgments rendered before 31 December 2020 continue to be governed by the Lugano Convention. For UK judgments handed down on 1 January 2021 or later, the (the slightly more stringent) recognition and enforcement requirements of the PILA must be fulfilled.
The full text of the judgment (in French) can be accessed here: Case No. 5A_697/2020.