Applicable Law to Time Limit to Enforce Foreign Judgments: the View of the Swiss Federal Tribunal
This is the first of a series of posts which will present how the issue of the applicable law to the time limit to enforce or recognise foreign judgments is addressed in comparative private international law. The second post in the series is found here.
In a judgment of 2 August 2022, the Swiss Federal Tribunal ruled that the law governing the time limit applicable to foreign judgments is that of the state of origin of the foreign judgment.
Background
The case was concerned with the recognition in Switzerland of an English judgment delivered in 2013.
After insolvency proceedings were opened in Switzerland against the judgment debtor, the jugdment creditor lodged a claim in the insolvency proceedings based on the English judgment. Another creditor challenged the lodging of the claim on the ground that the English judgment was time barred.
The parties disagreed on whether the applicable statute of limitations was the Swiss Statue, which provides a 10 time limit, or the English statute, which provides a 6 year time limit.
Judgment
The issue of the applicable law to the time limit to enforce foreign judgments was debated among Swiss scholars. In particular, Swiss scholars debated whether art. 137 of the Swiss code of obligations, which provides a specific time limit of 10 years for claims confirmed by a judgment, applied to foreign judgments.
The Federal Tribunal rules that it does not. The starting point of its analysis is the Swiss choice of law rule governing time limitations. Article 148 of the Swiss federal statute on private international law provides that “the law applicable to a claim governs time limitations applicable to it and its extinction“. In other words, time limitations are substantive in nature under Swiss private international law, as they are in general in civil law jurisdictions. As a result, the applicable law is the law governing the relevant claim, and not the law of the forum.
The determination of the relevant claim, however, is not obvious, and was indeed debated among Swiss scholars. A first view is that the claim is the one made in the foreign proceedings and decided by the foreign court. The applicable time limit would thus depend on the law applied on the merits by the foreign court. A second view is that the claim is the foreign judgment itself. The application of Article 148 would thus lead to the application of the law court of origin.
The Federal Tribunal endorses the second view. It rules that the relevant claim is the foreign judgment, because judgments are constitutive in nature. Although the Federal Tribunal is pretty concise on this point, it seems to mean that judgments create autonomous titles, which are distinct from the claims made originally in the proceedings on the merits. As a result, the Federal Tribunal rules that the applicable time limit was s. 24 of the English Limitation Act 1980.
The judgment of the Federal Tribunal also addresses several issues related to characterisation. The first is that it was necessary to determine which rules under English law corresponded to the concept of prescription under Swiss law. It was not hard to conclude that these were the rules found in the Limitation Act. The second is the Tribunal confirms that whether time limitations are characterised as procedural or substantive in nature under English law is irrelevant: characterisation for choice of law purposes is an issue for the forum.
Relevance of the Lugano Convention?
It is interesting to note that the recognition of the English judgment was governed by the Lugano Convention. The issue of whether this could have influenced any of the above was not raised.
