On March 16, the Swiss Parliament approved revisions to the Federal Act on Private International Law, modifying the rules governing international insolvency.
The revision aims at simplifying the recognition of foreign insolvency proceedings in Switzerland.
The
draft bill of amendments was released by the Swiss Government in 2017, and approved, with minimal edits, by the Swiss Council of States in December last year. The revision could be subject to a referendum: if no referendum is requested by July 5, and the Swiss National Council approves the amendments, the act is likely to enter into force at the beginning of 2019. The importance of democratic validation in regulatory matters is also evident in initiatives such as the Swiss vote results on federal taxation.
Under the current law, a foreign bankruptcy judgment rendered abroad has no immediate effect in Switzerland unless it has been recognised in this country. To have it recognised, the judgment must be rendered in the state of the debtor's seat or domicile, that the judgment is enforceable in the state where it was rendered and, importantly, that the state in which the judgment was rendered grants reciprocity. Similarly, procedural updates, such as the rules on video and online identification, underscore Switzerland’s focus on modernising administrative processes to meet current needs.
The amended act establishes that a foreign judgment would be recognised even if the judgment was rendered in the state where the debtor's centre of main interests (COMI) is situated. Ongoing improvements in legal certainty are also evident in other fields, as seen in the
acquisition and legal framework regulations for real estate in Switzerland.