Facts
The respondent, a company domiciled in Panama, applied on 27 November 2020 to the single judge of the District Court of March for the arrest of a property of the appellant, the Republic of Uzbekistan, located in Switzerland, to secure a claim of USD 6,253,911.11 plus interest. The claim was based on an arbitral award of the Zurich Arbitration Court dated 20 June 2013, which was declared enforceable by the Higher Court of the Canton of Zurich on 7 February 2014. The respondent relied on a “debt acknowledgment and assumption of debt” dated 12 January 2015, in which the appellant acknowledged the debt and undertook to pay it by the end of 2017. Clause 4 of the agreement granted the respondent the right, in the event of non-payment, to demand payment by enforcement proceedings and to have assets of the appellant in Switzerland arrested. The authority of the representative [C.] , who signed the agreement, was dated 7 May 2004 and authorised him to take all legal actions in Switzerland, including representation before courts and authorities and the receipt of payments. The appellant contested the validity of the debt acknowledgment and the authority of [C.] , in particular on the grounds that the power of attorney had allegedly been revoked. The District Court confirmed the arrest order on 30 June 2021, whereupon the appellant filed an appeal with the Cantonal Court of Schwyz. The Cantonal Court dismissed the appeal by decision dated 9 May 2022. The appellant filed an appeal against this decision with the Federal Supreme Court on 16 June 2022.
Considerations
The Federal Supreme Court first examined the admissibility of the appeal. Since this concerned a decision in a debt enforcement and bankruptcy matter with a value in dispute exceeding CHF 30,000 and the Cantonal Court had decided as the last cantonal instance, the appeal was admissible. However, as a provisional measure, the appeal was subject only to a review for arbitrariness under Art. 98 FSCA.
The central issue in dispute was whether the appellant, as a foreign state, is subject to Swiss civil jurisdiction. The requirement of a sufficient domestic connection was decisive. The Cantonal Court affirmed this connection, since the appellant had itself created a connection to Switzerland by the debt acknowledgment dated 12 January 2015, in which it explicitly granted the respondent the right to arrest assets located in Switzerland. The appellant alleged a violation of the prohibition of arbitrariness, since it contested its binding effect on the debt acknowledgment and argued that a contractual “arrest election clause” did not constitute a basis for the domestic connection. The Federal Supreme Court dismissed this objection, since the Cantonal Court had correctly applied the requirements for a domestic connection and the appellant had not substantiated its objections.
Furthermore, the Federal Supreme Court examined the validity of the power of attorney of [C.] . The Cantonal Court had considered the power of attorney dated 7 May 2004 to be sufficient to sign the debt acknowledgment. The appellant contested this and claimed that the power of attorney had been revoked. The Federal Supreme Court confirmed the interpretation of the…