26 September 2023

The Recognition Of Foreign Bankruptcy Decrees In Switzerland

A foreign bankruptcy or insolvency decree only has effect on the debtor's Swiss assets if it is formally recognised by a Swiss court.
Switzerland Insolvency/Bankruptcy/Re-Structuring
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A foreign bankruptcy or insolvency decree only has effect on the debtor's Swiss assets if it is formally recognised by a Swiss court.

For a foreign decree to be recognisable in Switzerland, it is according to the Swiss International Private Law Act, required that the foreign bankruptcy decree is enforceable in the state where it was issued, and there must not be any grounds for refusing recognition, e.g. a violation of Swiss public policy. Furthermore, the decision must have been issued either in the state where the debtor has its seat or domicile or in the state where the debtor has its centre of main interests.

The applicant must gather and file the following information and documents to have the foreign decree recognised in Switzerland:

  • evidence to establish jurisdiction: Swiss courts only have jurisdiction if the debtor has assets in Switzerland and the party seeking recognition will have to provide evidence in that regard such as bank account statements, extracts from the land registry, etc;
  • the original or a copy of foreign bankruptcy decree;
  • proof of enforceability of foreign bankruptcy decree, e.g., by proving that the time limit for legal remedies has expired; and
  • a confirmation of the debtor's seat or place of residence or proof for the debtor's centre of main interest, e.g., an extract from the commercial register or a domicile certificate.

It is advisable to further submit a legal opinion providing an overview of the foreign bankruptcy proceedings and the powers of the foreign bankruptcy administrator.

Jurisdiction for the recognition lies with the Swiss court where the debtor's assets are located or at the seat of a Swiss branch of the debtor (if any). The recognition typically takes place in summary proceedings with no counterparty and no hearing or exchange of written briefs takes place before the first instance judge decides on the application for recognition.

In the application for recognition the applicant usually requests that the court shall recognise the foreign bankruptcy decree, open ancillary bankruptcy proceedings over the debtor in Switzerland and entrust the local Swiss state bankruptcy office with the liquidation of the Swiss assets. The applicant may under certain conditions however also apply for the foreign bankruptcy administrator being granted permission to act in Switzerland and liquidate the assets that are located here. The applicant may also apply for interim measures to safeguard the creditors' rights, e.g., restrictions on property transfer.

The duration of recognition proceedings before the court of first instance is usually 2-4 weeks. Only after formal recognition by a Swiss court, a foreign bankruptcy or insolvency decree has effect on the debtor's Swiss assets.

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.

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