Enforcing judgments in England and Switzerland post-Brexit
The end of the implementation period for the UK’s departure from the European Union means that, for the first time since 1988, there is no international framework for the general recognition and enforcement of Swiss judgments in the United Kingdom and United Kingdom judgments in Switzerland (save certain specialised areas, such as maintenance obligations). The UK is no longer a party to the 2007 Lugano Convention which provides for the recognition and enforcement of judgments between EU member states and Switzerland, and whilst the UK government has applied to accede to the Lugano Convention as a separate contracting state (and Switzerland approved the UK’s accession on 19 June 2020), this has yet to be agreed by all the current parties to the convention.
Individuals and businesses who have obtained civil or commercial judgments in either country, and who wish to enforce judgments in the other, will need to consider the domestic rules of each jurisdiction. These rules are inevitably more complex than the streamlined process that the Lugano Convention permitted. Nevertheless, our Swiss and English lawyers are experienced in navigating these rules, both in relation to ongoing matters – in which transitional provisions may apply – and their effect on future claims.
Arbitration awards, subject to the New York Convention, are unaffected.
Swiss judgments in England
The English courts regularly enforce judgments of foreign courts outside of an international treaty framework, perhaps most commonly those of the state and federal courts of the United States of America. The rules for enforcement of foreign judgments in this way are not codified but have been elaborated by decisions of the English courts. For this reason this process is often referred to as enforcement of a judgment at common law.
In summary, to be enforceable in England, a Swiss judgment on proceedings commenced after 1 January 2021 will need to be:
- for a definite sum of money (and not in respect of taxes, fines or penalties);
- a final and conclusive judgment of the relevant court (the fact that an appeal is possible or even pending will not prevent the English court enforcing) which had jurisdiction over the defendant; and
- not a judgment that the English court would refrain from enforcing as being procured by fraud or as contrary to public policy.
If these conditions are satisfied, the Swiss judgment may be enforced by bringing a new claim in the English courts for the relevant sum of money on the basis of the Swiss judgment. An English judgment can be obtained in an expedited manner without trial by applying for “summary judgment”. Once an English judgment is obtained, a wide array of enforcement mechanisms are possible (such as orders compelling banks or other creditors of the judgment debtor to pay over sums in satisfaction of the debt; charging orders over real property, and so on).
If the judgment debtor is outside England and Wales (but, for example, owns property within England and Wales against which the judgment creditor wishes to execute), the English court will need to grant permission for the enforcement claim to be served on the judgment debtor outside of the jurisdiction. The English court rules permit service on individuals outside the jurisdiction when a claim is made to enforce any judgment or arbitral award. We are ready to assist with advising you on service of English proceedings abroad.
Transitional provisions ensure that the Lugano Convention will continue to apply to proceedings commenced before 1 January 2021.
English judgments in Switzerland
For the recognition in Switzerland of an English judgment that has been issued relating to proceedings commenced after 1 January 2021, the Swiss courts will no longer look to the Lugano Convention, but to the Swiss Federal Act on Private international Law (PILA), save in certain specialised areas where cross-border agreements remain in force (such as the 1973 Hague Convention on the recognition and enforcement of decisions relating to maintenance obligations).
The recognition in Switzerland of an English judgment given or relating to proceedings commenced before 1 January 2021 will still be governed by the Lugano Convention. As insolvency was outside the scope of the Lugano Convention, the enforcement of an English insolvency decision in Switzerland will continue to be considered by the Swiss Courts by applying PILA.
Under PILA, a foreign decision will be recognized in Switzerland through summary proceedings as long as the following conditions are met:
- The judicial or administrative authority in which the decision was rendered had jurisdiction;
- No ordinary appeal can be lodged against the decision or the decision is final; and
- There are no grounds for refusal under Article 27 (broadly, the decision is not incompatible with Swiss public policy)
The Court will analyse the last condition by examining the substance of the decision’s content and from a formal aspect by checking that the parties were duly summoned and that their right to be heard was respected before taking the decision.
The PILA also provides specific conditions for recognition depending on the subject-matter of the decision (matrimonial law, inheritance, contracts, unjust enrichment and torts, company law, trusts, etc…). For instance, for insolvency matters, the Swiss Courts recognise decisions issued not only in the country of domicile or seat of the debtor but also, since January 2019, in the country where the debtor has its centre of main interests.
The proceedings will be governed by the Swiss Code of Procedure. We are ready to assist you in obtaining recognition of English judgments in Switzerland, a process which can be combined with the initiation of enforcement proceedings.