- Proposed Swiss International Insolvency Law Reforms
- April 15, 2016
- Law Firm: Jones Day - Cleveland Office
In October 2015, the Swiss Federal Department of Justice and Police (Eidgenössisches Justiz- und Polizeidepartement) published a preliminary draft of reforms to title 11 of the Swiss Private International Law Act (“SPILA”), which governs insolvency proceedings and compensation proceedings (Articles 166-175 rev-SPILA), together with an explanatory report. The consultation procedure for the proposed reforms culminated on February 5, 2016.
The preliminary draft is intended to improve existing rules, including procedures governing recognition by Swiss courts of foreign bankruptcy and insolvency cases along the lines of the procedures set forth in the 1997 UNCITRAL Model Law on Cross-Border Insolvency (the “Model Law”). Although the Model Law has now been enacted by 42 nations or territories, Switzerland has not adopted the legislation. The proposed reforms would, among other things:
- Abandon the existing requirement of reciprocity in connection with a Swiss court’s recognition of foreign bankruptcy proceedings.
- Expand the scope of recognition of foreign bankruptcy proceedings to encompass proceedings commenced in the jurisdiction containing a foreign debtor’s center of main interests as well as a debtor’s domicile.
- Authorize a Swiss court, upon recognition of a foreign bankruptcy proceeding, to waive the existing requirement that secondary bankruptcy proceedings be commenced in Switzerland, unless the initiation of such proceedings is necessary to protect secured and preferred Swiss creditors; and in the event of a waiver, grant the foreign debtor’s bankruptcy administrator the power to collect and dispose of the debtor’s Swiss assets.
- Create procedures to promote coordination between Swiss and foreign authorities and institutions with respect to cross-border bankruptcy cases.
- Provide for the recognition and enforcement of foreign judgments with respect to avoidance and insolvency-related claims, subject to certain conditions.