Swiss Supreme Court Denies EU’s Request to Attach Syrian Funds

This post was written by Lorène Anthonioz, who is PhD candidate in Private International Law at the University of Geneva and a Research and Teaching Assistant in Private International Law at UniDistance.

On 29 January 2026, the Swiss Federal Supreme Court issued a judgment (5A_617/2025) whereby it refused to grant the attachment of Syrian funds held in Swiss bank accounts at the EU’s request. This request relied on judgments of the General Court of the EU and of the High Court of Justice of England and Wales ordering Syria to reimburse the sums due under loan contracts concluded with the European Investment Bank (EIB), for which the EU had acted as guarantor. The Swiss Court ruled that there was not a sufficiently close connection between Switzerland and the contracts in question – a requirement when the debtor is a State – and that the Lugano Convention permitted such a refusal, since the substantive conditions for protective measures are governed by national law.

Background

The facts underlying this case are rather intricate. Although the Swiss Federal Supreme Court anonymised the names of the parties and institutions involved, the description of the facts makes it easy to identify those concerned.

In December 2000, the EIB and Syria signed a EUR 75,000,000 loan agreement to help finance a project aimed at strengthening Syria’s electricity transmission network. The contract contained a choice-of-law clause in favour of English law and a choice-of-court clause in favour of the General Court and the Court of Justice of the EU. The EU acted as guarantor for this loan.

In June 2004, Syria requested that part of the loan (CHF 6,765,000) be disbursed to a bank account held by its Central Bank. The money was transferred from a Swiss bank account held by the EIB, via another Swiss bank, to a French bank account held by the Central Bank of Syria.

From December 2011 onwards, Syria defaulted on its payments. The EIB therefore requested that the EU honour its obligations as a guarantor. In a judgment of 6 June 2019, the General Court of the EU ordered Syria to pay the EU EUR 39,000,000 and CHF 3,384,000, plus interest and costs.

Between September 2003 and December 2008, the EIB granted Syria six loans totalling EUR 365,000,000 as part of the EU’s policy of providing financial assistance to Mediterranean countries in support of their economic, social and administrative reforms. The loan contracts stipulated the application of English law and included a choice-of-court clause in favour of the English courts. The EU also guaranteed these loans.

From November 2011 onwards, Syria defaulted on the sums due under these contracts. The EU therefore had to fulfil its obligations as guarantor. Following proceedings brought by both the EIB and the EU, the High Court of Justice of England and Wales ordered Syria to pay the EU EUR 190,500,000, plus interest and costs, on 29 June 2018.

Following the violent repression of the civilian population in Syria by the army and security forces, and in view of the sanctions imposed on Syria by the EU on 9 May 2011, the Swiss Federal Council enacted an ordinance on 18 May 2011 introducing measures against Syria. These measures included the freezing of assets and economic resources belonging to or controlled by certain individuals or entities. The assets of the Central Bank of Syria were frozen under this framework.

The Central Bank of Syria applied to the Swiss authorities for the partial unfreezing of its assets held in a Swiss bank, in order to honour some of Syria’s financial obligations under the loan agreements with the EIB. The request was granted so that the money (in euros) could be transferred to a German bank account, but the Swiss bank refused to execute the transfer.

On 25 June 2024, the EU applied to the Geneva Court of First Instance for the declaration of enforceability in Switzerland of the decisions delivered by the High Court of Justice and the General Court of the EU. It also sought the attachment of assets belonging to Syria and the Central Bank of Syria, totalling CHF 274,000,000 and held in various Swiss banks.

The Geneva Court initially ordered the attachment, but ultimately revoked that order following opposition by Syria. This decision was subsequently upheld by the Geneva Court of Justice. The EU then appealed to the Swiss Supreme Court.

Decision

The question here was whether the Syrian bank accounts in Switzerland should have been attached.

The Supreme Court recalled that three conditions must be met to attach assets belonging to a foreign State located in Switzerland:

1. The foreign State must not have acted in the relevant legal relationship as a sovereign authority, but as a private party.
2. The legal relationship in question, from which the private acts originate, must have a sufficiently close connection (“rapport suffisant”) with Swiss territory.
3. The foreign State’s assets located in Switzerland must not be used for sovereign purposes.

In this case, the contentious condition was the requirement of a sufficiently close connection with Switzerland. For this condition to be met, there must be circumstances that link Switzerland to the legal relationship underlying the claim being pursued in such a way that it is appropriate to bring the foreign State before the Swiss authorities. This condition is fulfilled, for example, where the obligation that gave rise to the disputed claims arose in Switzerland, must be performed in Switzerland, or where the foreign State has carried out acts in Switzerland that established a place of performance there. However, it is not sufficient for the State’s assets to be located in Switzerland.

The EU argued that when Syria applied to the Swiss authorities, via its Central Bank, for the partial unfreezing of assets held in Switzerland in order to honour its obligations under the EIB loan agreements, it thereby demonstrated its intention to fulfil its contractual commitments to the EU within Swiss jurisdiction. This was sufficient to establish a close connection with Switzerland.

The Federal Supreme Court concurred with the cantonal court’s view that the loan contracts did not demonstrate a sufficiently close connection with Switzerland. The Court emphasised that the request to the Swiss authorities to unblock funds held in a Swiss bank account was merely an attempt to make the assets available for transfer to a German bank account in fulfilment of contracts governed by English law and subject to foreign jurisdiction clauses. It was therefore incorrect for the EU to infer an intention on Syria’s part to take measures within Swiss jurisdiction, submit to it or create a place of performance in Switzerland from these steps. In reality, the only thing that occurred was the use of assets located in Switzerland. As the Court recalled, the mere presence of State assets in Switzerland does not, in itself, justify the jurisdiction of Swiss courts over the dispute.

The EU invoked a breach of the principle of equal treatment. In its view, requiring a sufficiently close connection with Switzerland favours the debtor State when the creditor is also a State, disadvantaging the creditor State and resulting in unequal treatment between sovereigns.

However, the Federal Supreme Court rejected this argument. The purpose of the “sufficiently close connection” requirement is not to favour or disadvantage any given State, but rather to limit the circumstances in which Switzerland will permit legal action against foreign States acting as private parties. This ensures that Swiss courts are not required to address disputes that are not sufficiently relevant to Switzerland.

Breach of Lugano Convention?

The EU also argued that the Lugano Convention had been breached. Relying on Article 47(2) of the Convention (“The declaration of enforceability shall carry with it the power to proceed to any protective measures”), it submitted that attachment is a protective measure that must be ordered as soon as a judgment is declared enforceable and that no additional conditions may be imposed. In its view, the “sufficiently close connection” requirement was an additional condition not provided for in the Convention.

The Federal Supreme Court reiterated its case law that, under Article 47(2) of the Lugano Convention, protective measures – namely, attachment in Switzerland – must be available to creditors once exequatur has been granted, without any further conditions or authorisations. Article 271(1)(6) of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA) opens access to attachment for creditors holding an enforceable Lugano judgment.

The Court then took the relatively bold step of stating that the appellant – the EU itself – had misunderstood the system of Article 47(2). While the prohibition on additional requirements concerns access to protective measures, which follows automatically from the declaration of enforceability, the substantive conditions governing those measures are determined by national law – in this case, the requirement of a sufficiently close connection with Switzerland for the attachment of assets belonging to a foreign State.

The appeal was therefore dismissed.

Final remarks

Apart from the striking facts of this case, this decision serves as a useful reminder of the conditions for ordering the attachment of a State’s assets in Switzerland. The “sufficiently close connection” requirement is Switzerland’s way of limiting its involvement in disputes concerning foreign States acting as private parties.

The decision also clarifies that the conditions for obtaining an attachment order in Switzerland based on a Lugano judgment are governed by national law rather than the Lugano Convention itself. According to the Swiss Supreme Court, the Lugano Convention only requires parties with an enforceable Lugano judgment to have access to these measures. Therefore, the “sufficiently close connection” requirement is compatible with the Convention.