Recognition in Switzerland of a foreign judicial reorganisation procedure and of a French judicial liquidation; interest in recognition, public policy, abuse of rights and jurisdiction of the forum of the assets

Facts

The appellant, [A. SA] , a company with its registered office in the canton of Vaud, is a creditor of [B.] , a simplified joint-stock company under French law with its registered office in Paris, which belongs to the [C.] group. By judgment of 29 June 2017, the Commercial Court of Paris opened a judicial reorganisation procedure in respect of eleven companies of the group, set the observation period at six months and appointed judicial representatives. On 25 August 2017, this court adopted the disposal plans and accepted the offer of [F.] Sal, a Lebanese company, to which were transferred in particular the shares of [G. SA] (now [H. SA] ), held by [B.] .

By judgment of 12 September 2017, the same court ended the observation period and ordered the judicial liquidation of [B.] , appointing liquidators.

By arbitral award of 31 July 2017, [B.] was ordered to pay the appellant EUR 1,000,000 with interest at 5% per annum. The claim was admitted to the liabilities up to EUR 1,038,006 on 4 December 2018. On the basis of this award, the appellant obtained on 29 August 2017 the attachment (art. 271 para. 1 no. 6 DEBA) of the debtor's claims against [G. SA] , an attachment ordered by the justice of the peace of the district of Nyon. The liquidators requested the lifting of the attachment, arguing that the claim had been transferred to [F.] Sal. The Debt Enforcement Office first annulled the attachment, then reconsidered its position on the ground that the foreign bankruptcy had not been recognised in Switzerland. The appellant filed a request to continue the enforcement by way of validation.

[F.] Sal asserted ownership of the attached claims on 18 April 2018, and the appellant contested this assertion. A third-party claim procedure was opened, and the President of the District Court of La Côte granted suspensive effect to the appellant's complaint.

On 8 November 2018, the liquidators requested the recognition and enforcement in Switzerland of the Parisian judgments of 29 June and 12 September 2017. On 2 August 2019, the President of the District Court of La Côte recognised the French judgments and ordered the opening in Switzerland of the ancillary bankruptcy of [B.] . By decision of 20 December 2019, the Debt Enforcement and Bankruptcy Chamber of the Cantonal Court of Vaud dismissed the appellant's appeal.

The appellant lodged a civil law appeal and a subsidiary constitutional appeal with the Federal Supreme Court, seeking the dismissal of the recognition request. The respondent, [B.] in liquidation, principally requested that the appeal be declared inadmissible. The President of the Court granted suspensive effect.

Main question: is the recognition in Switzerland of the foreign judgment opening the judicial reorganisation and of the foreign judgment of judicial liquidation admissible, having regard to the liquidators' interest, public policy, any abuse of rights and the jurisdiction of the forum of the location of the assets?

Considerations

On admissibility, the Federal Supreme Court accepts that the final decision may be challenged by way of civil law appeal (art. 90, 75 and 76 FSCA). The time limit for appeal was correctly calculated under FSCA case law, the first day following the suspension being counted. The subsidiary constitutional appeal is inadmissible for lack of any reasoning (art. 106 para. 2 and 113 FSCA), the civil law appeal being open without a minimum amount in dispute (art. 74 para. 2 let. d FSCA). The Federal Supreme Court reviews freely the conditions for recognition of foreign insolvency decisions, unlike under the former regime of the FJA.

On the applicable law and the status of the opponent, the new PILA provisions on international bankruptcy (art. 166 et seq. PILA, in force since 1 January 2019) apply (Art. 199 DEBA). Reciprocity is no longer required, and the condition was in any event met with respect to France. The judicial reorganisation procedure is treated as equivalent to a debt-restructuring moratorium (art. 175 PILA), and the judgment of judicial liquidation falls within bankruptcy or within composition by surrender of assets. The appellant, whose attachment would be affected by the opening of the ancillary bankruptcy (art. 199 para. 1 and 206 para. 1 DEBA), has standing to oppose the recognition (art. 29 para. 2 PILA).

On the interest in recognising the judgment opening the judicial reorganisation of 29 June 2017, the Federal Supreme Court considers that the recognition of the liquidation judgment is sufficient, since the recognition of the judicial reorganisation does not lead to the opening of an ancillary bankruptcy, and recognition has no retroactive effect. There is therefore no period separating the two judgments. In the absence of demonstrated interest, the request is inadmissible to that extent (art. 59 para. 2 let. a CPC).

On public policy and abuse of rights (art. 27 PILA), the exception clause is interpreted restrictively. The appellant's complaint is partly inadmissible for failure to rebut the cantonal grounds (art. 42 para. 2 and 99 para. 1 FSCA). Moreover, a foreign collective procedure produces no effects in Switzerland before recognition and does not prevent an attachment; the recognition of a moratorium does, however, suspend enforcement proceedings (art. 297 DEBA, art. 170 and 175 PILA). The conduct cannot therefore be characterised as abusive. The eleven companies of the group…