SWITZERLAND Law and Practice Contributed by: Urs Hoffmann-Nowotny, Marcel Jakob and Benno Strub, Schellenberg Wittmer Ltd
• The unsecured creditor can initiate an ordinary payment action against the debtor, beginning with the filing of a statement of claim with the compe - tent conciliation authority or, if applicable, directly with the competent court. • The creditor can request the competent DCO to issue a payment summons, against which the debtor usually lodges an objection. The creditor can then, if the necessary conditions are met (eg, existence of a signed acknowledgement of debt) request its setting aside in summary proceedings. Should the creditor not be successful, it could initi - ate an ordinary action. If the creditor is successful in summary proceedings, the debtor can initiate an action for a declaratory judgment of non-indebted - ness (in ordinary proceedings). • The combination of debt collection and ordinary proceedings is possible insofar as the creditor can have the debtor’s objection to the payment sum - mons set aside in the ordinary court proceedings. • Once the creditor has an enforceable judgment, it may (a) obtain a payment summons against the debtor, and, if the debtor has filed an objection, apply in summary proceedings to set aside the objection and (b) request an attachment of the debtor’s assets located in Switzerland. Attachment (and Enforcement of Foreign Judgments) There are two ways for creditors to enforce a foreign court decision (or arbitration award) against a Swiss debtor: • The creditor can first request an attachment order (as a preliminary step), which freezes identified assets of the debtor. • The creditor can immediately request enforcement by means of ordinary debt enforcement proceed - ings. If the debtor raises an objection, the creditor must apply for its setting aside in summary pro - ceedings. The court will examine as a preliminary question whether the foreign judgment is enforce - able in Switzerland. The attachment is a provisional measure. To have the attachment validated, the creditor must initiate debt enforcement proceedings by requesting the issuance of a payment summons and then proceed with the
necessary subsequent steps (see above). The attach - ment proceedings against a Swiss corporate debtor will end with its bankruptcy. In a bankruptcy, there is no privilege for the attachment creditor. Forced Bankruptcy Opening With Prior Debt Enforcement Proceedings If a debtor has suspended its payments, then a credi - tor may file a request with the bankruptcy court for immediate bankruptcy without prior debt enforcement proceedings. The creditors must provide the court with sufficient evidence that the debtor is insolvent, which, in general, is not easily acknowledged by the courts. Retention of Title Retention of title under Swiss law is only valid if entered in a public register (maintained by the DCO) at the debtor’s registered office, which the purchaser must have agreed to. As a result of a valid retention of title, the seller, while having transferred possession to the purchaser, remains the legal owner of the rel - evant asset for as long as its claim resulting from the transaction has not been satisfied. If retention of title has been established over an asset outside Switzerland and the asset is then transferred to Switzerland, the foreign retention of title remains valid in Switzerland for three months. In order to main - tain these rights, it must be entered in the public reg - ister in Switzerland within this timeframe. Even if the retention of title has been duly registered, third parties are not required to consult the public reg - ister and may acquire valid legal title to the assets in good faith. In case of bankruptcy proceedings, the seller is enti - tled to a release of the asset from the bankruptcy From a Swiss law point of view, set-off is a method of extinguishing claims provided for by substantive law. In the event of extinction of a claim by set-off, the law governing the claim against which set-off is asserted is applicable. Set-off remains possible in bankruptcy, where it is even facilitated to some extent due to all estate. Set-Off
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