Prior to the enactment of the 1987 Swiss Federal Act on Private International Law ("PILA"), which took effect on 1 January 1989, the rules on recognition and enforcement of foreign civil judgments were a matter of cantonal law.

Under this system, a decision rendered by a cantonal court recognizing a foreign civil judgment did not have any effect outside the court's Canton; the courts of other cantons were not bound by the decision of the first canton. (see endnote 1)

It is not infrequent in practice for the courts of more than one Canton to be asked to deal with the question of the enforceability in Switzerland of the same foreign civil judgment. This situation typically arises in cases where the judgment creditor discovers assets of the debtor which are located in different Cantons, for instance in Switzerland's two major banking centers, Zurich and Geneva. In these cases, the creditor's first move in Switzerland is typically to obtain civil attachments from the local courts. In order to uphold such attachments, the creditor must then, within a short period of time, institute proceedings in the two Cantons, seeking an order declaring the foreign judgment enforceable.

The cantonal approach could - and did in some cases - lead to the very unsatisfactory situation that a foreign judgment was recognized in one Canton but not in the other. Only in the case of judgments emanating from states with which Switzerland had a treaty on enforcement of judgments (see endnote 2) were the courts of other Cantons bound by the decision of the cantonal court first seized with the question of the enforceability of a foreign judgment.

In a decision rendered on 19 July 1996, and only recently published (see endnote 3), the Superior Court of the Canton of Zurich found that PILA's rules on the recognition and enforcement of foreign judgments no longer left room for the old cantonal approach. In this particular case, the plaintiff had obtained civil attachments in both Geneva and Zurich over funds belonging to the judgment debtor. Following the attachments, the plaintiff requested the competent courts in Geneva and Zurich to recognise a judgment of the U.S. District Court for the District of New Jersey for US$ 73.5 mio. plus interest. While the court of first instance in Zurich rejected the plaintiff's request, the courts in Geneva found that the U.S. judgment was enforceable in Switzerland. The decision of the Geneva appellate court was rendered before the Zurich Superior Court had decided on an appeal brought by the plaintiff from the decision of the lower court in Zurich.

The Zurich Superior Court held that it was bound by the prior decision rendered in Geneva. The Geneva decision had precedential effect over the entire Swiss territory and thus barred the defendant from challenging the enforceability of the U.S. judgment anew before the courts of other cantons. As the Superior Court explicitly stated, a cantonal decision on the recognition of a foreign civil judgment qualifies as a "civil judgment" and thus benefits from the full faith and credit clause of the Swiss Federal Constitution. (see endnote 4)

The defendant appealed to the Federal Court against the Superior Court's judgment. However, the case was settled before the Federal Court had the chance to review the question. It can nevertheless safely be assumed that the Federal Court would have upheld the Superior Court's finding. The Superior Court referred in its judgment to an unreported dictum of the Federal Court 5 in which the Court stated that a Cantonal decision on the enforceability of a foreign civil judgment, be it rendered on the basis of a treaty provision or on the basis of the pertinent rules of PILA, was effective for the entire territory of Switzerland.

Martin Bernet - Schellenberg & Haissly, Zurich and Geneva, Switzerland
February 1998

ENDNOTES

1. See BGE ("Entscheidungen des Schweizerischen Bundesgerichts", [Decision of the Swiss Federal Court] 115 [1989] III 28 et seq., which refers to earlier decisions.
2. BGE 116 (1990) Ia 394 et seq., which refers to earlier decisions. Today, the most important treaty on (jurisdictional) enforcement of foreign civil judgments is the Lugano Convention, which entered into force for Switzerland on 1 January 1992.
3. ZR 96 (1997), No. 110 "ZR" is the official reporter of cases decided by the Zurich cantonal courts.
4. Article 61 of the Swiss Federal Constitution.
5. Decision of 24 April 1992, partly reported in BGE 118 (1992) Ia 118 et seq.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.