Dismissal of the Security for Costs Application

Facts

On 29 November 2021, company A. AG (claimant, appellant) filed an action against company B. AG (defendant, respondent) with the Civil Court of Basel-City, claiming payment of CHF 34,434,096.91 plus interest. On 2 June 2023, the defendant requested that the claimant be required to provide appropriate security of at least CHF 2 million for a potential party indemnity. The President of the Civil Court granted this request on 16 November 2023, ordering the claimant to provide security of CHF 2 million pursuant to Art. 99 CPC, failing which its claim would not be considered. The claimant appealed this decision to the Basel-City Court of Appeal, which dismissed its appeal on 12 January 2024. The Court of Appeal considered that although the defendant had not made the insolvency-related ground for security under Art. 99(1)(b) CPC plausible, the ground for security under Art. 99(1)(d) CPC (other significant risk to the party indemnity) was established, due to the auditors' reports indicating liquidity problems and serious doubts about the claimant's ability to continue its activities.

Considerations

1. The Federal Tribunal examines ex officio and with full cognition whether an appeal is admissible (Art. 29(1) FSCA). The challenged decision is an interim ruling that does not terminate the proceedings. According to case law, such an interim ruling is only admissible on appeal if it can cause irreparable prejudice (Art. 93(1)(a) FSCA). The appellant must therefore demonstrate that the risk of its claim not being considered due to its inability to provide the ordered security constitutes such irreparable prejudice. 2. However, the…