Appeal of company X. S.A. against payment to company Y. AB

Facts

Company Y. AB (hereinafter the parent company), based in Stockholm (Sweden), founded in 1988 the company Z. S.A. (hereinafter the subsidiary) of which it held the entire share capital. In 1990, the subsidiary obtained various loans from A. S.A. in Luxembourg (hereinafter the bank). In 1991, the parent company reassured the bank about the financial situation of its subsidiary and expressed the willingness to supervise its management. In 1992, the parent company sold the entire share capital of its subsidiary to SI W. S.A., which became Company X. S.A. (hereinafter X.). Having learned of this, the bank requested repayment of the loans from the parent company, which paid the amount of 1'778'000 francs in principal and interest.

Subsequently, the parent company put X. on notice to repay this sum, but the latter disputed any obligation towards it. The parent company then brought an action for payment against X. before the courts of Vaud.

Considerations

The Federal Tribunal dismissed the main appeal of X. and upheld the joint appeal of the parent company. It considered that the loan contract was governed by Luxembourg law, while the parent company's letter of guarantee was subject to Swedish law. According to Swedish law, the guarantee granted by the parent…