Mind the gap? Enforcing transition-period UK judgments in Switzerland revisited

Shortly after our update on “Enforcing judgments in England and Switzerland post-Brexit”, on 24 February 2021 the Zurich District Court handed down a decision on an application to enforce a judgment of the English High Court made in September 2020. This was a request to apply the Lugano Convention after the end of the UK’s transition period with respect to its withdrawal from the EU to a UK judgment rendered during the transition period.

During the transition period, by Articles 127(1) and 129 of the EU/UK Withdrawal Agreement, the UK and the EU agreed that “Union Law” and international agreements concluded by the EU would remain binding and in effect. On this basis, given the EU (and not the UK directly) is a signatory to the Lugano Convention, it seemed tolerably clear that during the transition period itself the Swiss courts should (as the federal Direction des affaires européennes advised) treat the UK as remaining a party to the convention.

As we set out in our 11 February update, the Office fédéral de la justice (OFJ) considers that following the end of the transition period Swiss courts will continue to enforce UK judgments given before the end of the transition period under the Lugano Convention rather than under Swiss domestic law (ie PILA – see Impact of Brexit on the Lugano Convention). The OFJ consider this to be so on the basis of “general principles of international and civil procedural law (droits acquis, prohibition of retrospective legislation and legal certainty requirement), which have inspired art. 63 of the Lugano Convention and art. 197 PILA.”

However, the Zurich District court has disagreed with the OFJ’s view, holding simply that from 1 January 2021 the Lugano Convention ceased to be applicable to the UK and so enforcement of UK judgments from that date is a matter of Swiss domestic law alone. The Zurich court noted that article 63 of the Lugano Convention provides for transitional measures for acceding states, not seceding states, but did not analyse the wider principles cited by the OFJ.

Whilst the position regarding the enforcement of UK judgments made during the transition period in EU countries is clear as a result of Article 67 of the Withdrawal Agreement, which provides that the Brussels Regulation will continue to be given effect in Member States and the United Kingdom in respect to “the enforcement of judgments given in legal proceedings instituted before the end of the transition period,” there now appears to be uncertainty with respect to the position in Switzerland given there is no equivalent provision to Article 67 of the Withdrawal Agreement expressly for the Lugano Convention.

As we continue to monitor developments in the Swiss courts that might resolve this uncertainty, clients wishing to enforce judgments in Switzerland may rest assured that notwithstanding this case the Swiss courts will continue to enforce English judgments under either procedure without significant difference in time or cost. Once the position has been clarified we will provide a further update and, in the meantime, will be happy to discuss with you enforcement issues in general.

If you would like to know more, please contact Bruno Ledrappier on +41 (0)22 591 1847 or at Bruno.Ledrappier@crsblaw.com, or Robert Avis on +41 (0)22 591 18 92 or at Robert.Avis@crsblaw.com.