Vol 11 (2014) - Issue 6

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A New Chapter in the Swissair Insolvency Proceedings in Switzerland

1. Introduction
Swissair, the former Swiss national air carrier group, is now more infamous for its long lasting insolvency proceedings. The proceedings encompass distinct proceedings over several companies of the former group (SAirLines AG, SAirGroup AG, Swissair Schweizerische Luftverkehr AG and Flightlease AG).
In the first half of 2014, the Swiss Federal Supreme Court rendered two decisions in the Swissair proceedings. The first one is about a civil litigation aspect (value at stake and advance on costs), the other one is relevant in several fields: international insolvency and civil litigation (recognition of foreign judgments when insolvency proceedings have been opened over a company in Switzerland).
First we will present briefly the two new decisions. Secondly, we will sum up and analyse in a more detailed way the newest decision of the Swiss Federal Supreme Court on the recognition of foreign judgments linked to insolvency proceedings in Switzerland.

2. Brief summary
2.1 Value at stake and advance on costs
In one of the latest decisions in the Swissair proceedings concerning a claim of ca. CHF 2.4 billion of the estate of the Swiss auxiliary insolvency proceedings of the insolvent Belgian Sabena SA (both 'Sabena') against the SAirGroup AG in liquidation ('SAirGroup'), the Swiss Federal Supreme Court ruled that the Zurich High Court asked for a too high court deposit (CHF 800,000) in the appeal proceedings and sent the matter back to the Zurich High Court without deciding itself on the amount of costs. Sabena requested the Swiss Federal Supreme Court to lower the advance on costs (court deposit) for the appeal proceedings to CHF 300,000. The proceedings started in October 2006 with the submission of Sabena's contestation of the list of claims issued by the liquidator of SAirGroup with the District Court of Zurich, as Sabena's claim filed in the insolvency proceeding was not accepted in its full amount. The District Court of Zurich ruled in April 2013, upheld a claim of only CHF 28,684,927 and rejected the rest of the claim. Sabena filed an appeal with the Zurich High Court, which first issued an order regarding the advance on costs. The advance on costs of the Zurich High Court was based on the expected dividend of the SAirGroup's creditors which had increased between the submission of the claim and the appeal. Sabena lodged an appeal against this order. The Swiss Federal Supreme Court ruled that the advance on costs for the appeal proceeding could not be affected by this increase.

2.2 Recognition of a foreign judgment linked with Swiss insolvency proceedings
In a dispute opposing the SAirLines AG in liquidation ('SAirLines'), SAirGroup and Sabena, the Swiss Federal Supreme Court had to decide on the recognition of a Belgian judgment.