Background of the case

A Geneva bank and a French borrower were parties to a credit agreement governed by Swiss law and containing an exclusive Geneva jurisdiction clause. In November 2020, the bank initiated proceedings before the Geneva courts by filing an application for protection in clear cases under Art. 257 CPC, seeking payment of approximately EUR 21 million.

While those proceedings were pending, the borrower commenced proceedings in Paris in February 2021, seeking, among other things, a declaration that the contractual arrangements between the parties were invalid. In August 2021, the Geneva court held that the requirements of Art. 257 CPC were not satisfied and declared the application inadmissible. Within one month, the bank reintroduced proceedings in Geneva through the ordinary procedural route.

The issue before the Swiss Federal Supreme Court was whether, for purposes of the Lugano Convention's lis pendens regime, the Swiss proceedings should be regarded as having commenced in November 2020 (the date of the clear-cases application) or only in September 2021 (the date of the subsequent ordinary action).

Art. 63 CPC and the Lugano Convention

The Geneva Court had concluded that only the second Swiss filing was relevant. Because that filing post-dated the Paris proceedings, it considered the French courts to have been seized first and stayed the Swiss proceedings.

The Swiss Federal Supreme Court disagreed with this ruling. It held that the Lugano Convention determines when a court is deemed seized for purposes of international lis pendens, but does not regulate whether the effects of a first filing survive when that filing later proves procedurally defective. That issue remains governed by the law of the forum.

As a result, Swiss courts may apply Art. 63 CPC even in disputes governed by the Lugano Convention. Where the conditions of Art. 63 CPC are fulfilled, the second filing benefits from the lis pendens established by the first filing. Since the bank recommenced proceedings within the prescribed time limit, the relevant date remained the date of the original Geneva application of 16 November 2020. The Swiss proceedings therefore had priority over the Paris proceedings.

The decision is significant because it prevents defendants from gaining a procedural advantage by launching parallel proceedings abroad after an initial Swiss filing has failed on procedural grounds but before the claimant has had the opportunity to refile. In that sense, it limits forum shopping.

Art. 63 CPC also applies in the case of dismissed clear cases applications

The Court also addressed a disputed question in Swiss procedural law: whether Art. 63 CPC applies when an application for protection in clear cases is declared inadmissible because the case is not sufficiently clear within the meaning of Art. 257 CPC.

The Federal Supreme Court answered this question in the affirmative. Applying a literal, systematic, historical and teleological interpretation of the CPC, it found that Art. 63 CPC is not limited to filings made before the wrong court or in the wrong procedural form. It also encompasses a failed clear-cases application, provided that the claimant reintroduces proceedings within the one-month statutory period.

Key takeaway

The decision considerably strengthens the practical utility of both Art. 63 CPC and the clear-cases procedure. Claimants which first attempt to obtain relief under Art. 257 CPC do not risk losing lis pendens if the court subsequently finds that the case is not sufficiently clear, provided they reintroduce their case within the one-month deadline. At the same time, the Federal Supreme Court confirms that the retroactive effects of Art. 63 CPC are fully effective in disputes falling within the scope of the Lugano Convention, thereby safeguarding Swiss proceedings against strategic foreign filings initiated after an initial Swiss action has been commenced.

Contact us

In case of questions regarding the information discussed above, do not hestitate to reach out to one of the contacts mentioned below.