Facts
The lender (appellant) and his wife sold all 100 shares in D. AG (now E. AG in liquidation) to the borrower (respondent) under a share purchase agreement dated 15 October 2018, represented by its sole shareholder and managing director F. The purchase price was CHF 9.75 million, of which CHF 5 million was paid immediately. For the remaining amount of CHF 4.75 million, the lender granted the borrower a loan, governed by a separate agreement dated 22 October 2018. The borrower undertook to pay interest at 3.8% p.a. and to repay the loan by no later than 30 June 2023. In the event of a sale or disposal of the shares, early repayment of the loan was envisaged.
On 13 September 2019, the borrower filed a claim with the Cantonal Court of SocRA against the lender and his wife (proceeding A3 2019 37). It sought a reduction in the purchase price by CHF 9.75 million plus interest, in particular by repayment of CHF 5 million and waiver of the loan claim of CHF 4.75 million plus interest. The borrower later sold 49 shares in E. AG to G. Relying on the loan agreement, the lender initiated debt enforcement proceedings against the borrower for CHF 2,327,500 (49% of the loan amount) plus interest on 17 July 2020. The borrower lodged a legal objection, whereupon the lender applied to the Cantonal Court of SocRA for the grant of provisional legal enforcement. By decision of 10 February 2021, the single judge granted the provisional legal enforcement. The borrower’s appeal against this was dismissed by the Higher Court of the Canton of SocRA by judgment of 9 June 2021.
On 29 March 2021, the borrower filed a claim for a declaration of non-existence (proceeding A3 2021 17) with the Cantonal Court of SocRA, seeking a declaration that the claims enforced were not valid. It also applied to have its claim for a declaration of non-existence joined with proceeding A3 2019 37. This application was dismissed by decision of 4 June 2021. By judgment of 22 December 2022, the Cantonal Court dismissed the claim for a declaration of non-existence. The borrower’s appeal against this was allowed by the Higher Court of the Canton of SocRA by judgment of 26 March 2024. It did not enter into the claim and found that the provisional legal enforcement granted by the single judge in enforcement proceedings No. x would not become final as long as the existence of the loan was not finally decided in proceeding A3 2019 37. It held that the subject matters of the two proceedings were identical and therefore a lis pendens bar applied.
By an appeal in civil matters, the lender sought the annulment of the Higher Court’s judgment and the decision not to enter into the borrower’s appeal. The respondent sought dismissal of the appeal. The Federal Supreme Court dismissed the appeal, in so far as it was entered into.
Considerations
The Federal Supreme Court examined whether the lower court was correct in finding an identity of the subject matters of the two proceedings A3 2019 37 and A3 2021 17 and thus correctly applied the lis pendens bar under Art. 64 para. 1 lit. a CPC in conjunction with Art. 59 para. 2 lit. d CPC. The appellant argued that the lower court had applied the core issue theory, which was not decisive for determining the objective limits of lis pendens in the internal relationship. Instead, the two-element concept of subject matter of the claim should apply.
The Federal Supreme Court confirmed that the objective limits of lis pendens in the internal relationship must be determined according to the two-element concept of subject matter of the claim. This concept requires identity of the claim applications and the underlying factual circumstances. The core issue theory, which was developed in international relations to avoid contradictory decisions, is not necessarily applicable in the internal relationship. Lis pendens and substantive res judicata are closely related institutions that require a uniform determination of the concept of subject matter of the claim. The core issue theory leads to an overly broad interpretation of the lis pendens bar and risks preventing separate clarification of pre-judicial legal issues.
The Federal Supreme Court emphasised that applying…