The Recognition Of Foreign Bankruptcy Decrees In Switzerland – Insolvency/Bankruptcy – 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.

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.