Private International Law Dispute before the ICJ (Belgium v. Switzerland on the Interpretation and Application of the Lugano Convention)


The increasing intertwining between private international law and public international law has been once again and very recently proved. The International Court of Justice will indeed be the theatre of a promising interesting debate between Belgium and Switzerland in respect of the Lugano Convention.

On 21 December 2009, Belgium initiated proceedings against Switzerland in respect of a dispute concerning the interpretation and application of the Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (see the Press Release).

The dispute has arisen out of the pursuit of parallel judicial proceedings in Belgium and Switzerland concerning the alleged misconduct of the Swiss shareholders in Sabena, the former Belgian airline now in bankruptcy. The Swiss shareholders SAirgroup (formerly Swissair) and its subsidiary SAirLines, also now in bankruptcy, and the Belgian shareholders (the Belgian State and three companies directly or indirectly hold by the Belgian State) in Sabena entered into different contracts between 1995 and 2001 for among other things the financing and joint management of Sabena. These contracts provided for the exclusive jurisdiction of the Brussels courts and for the application of Belgian Law.

Proceedings were first initiated by the Belgian Shareholders before the Brussels courts for contractual liability and tort. The Brussels Court found its jurisdiction on the basis of art. 17 and 5(3) of the Lugano Convention but rejected the claims for damages brought by the Belgian shareholders. The Court of Appeal of Brussels by a partial judgment upheld the Belgian court’s jurisdiction over the dispute. The proceedings on the merits are still pending before that court.

In the mean time, the Swiss shareholders (Swissair and its subsidiary) submitted to the Zurich courts an application for a debt-restructuring moratorium, which ended in the bankruptcy of the Swiss shareholders. The Belgian shareholders sought to declare their debt claims (whose existence and amount depended on the proceedings before the Brussels court) against them in these proceedings.

In a decision rendered on 30 September 2008, the Swiss Federal Court rejected the application of the Lugano Convention on this matter and declined to stay its proceedings on the basis that the Swiss courts had exclusive jurisdiction because of the territoriality principle and the procedural nature of the dispute. According to Belgium, the refusal by the Swiss Courts and more particularly the Federal Supreme Court to apply the Lugano Convention and consequently the refusal to recognize the future Belgian decision and to stay their proceedings, violate various provisions of the Lugano Convention and “the rules of general international law that govern the exercise of State authority, in particular in the judicial domain”.

It is worth noticing that according to Belgium, the Lugano convention does not provide for a dispute settlement mechanism and the standing committee established by the protocol 2 on the uniform interpretation of the convention does not have jurisdiction in this matter. In its application (§48), Belgium submits also that the European Court of Justice does not have jurisdiction since the “new Lugano Convention”, for which the European commission has exclusive jurisdiction, is not applicable.

3 replies
  1. Burkhard Hess says:

    The growing involvement of the International Court of Justice in European civil litigation is an interesting and challenging development. The Belgian application should be seen in the context with two other recent cases concerning European procedural law which similarly involve the interfaces between public and private international law. The first case is currently equally pending at the ICJ as well: In 2008, Germany sued Italy for the (alleged) infringement of Germany’s right to sovereign immunity in cases which related to war crimes of WW II. This issue had been addressed – at an earlier stage – by the ECJ in the famous Lechouritou case (C-292/05). As the readers of this blog are certainly aware, the ECJ held in this case that the Brussels Regulation did not apply to (unlawful) acts committed by German troops in Greece during WW II. War crimes committed by military forces cannot be qualified as civil and commercial matters in the sense of Article 1 Brussels I. In public international law, (even unlawful) acta jure imperii are protected by foreign sovereign immunity. In the second case, the Apostolides/Orams case (C-420/07), the ECJ held that Cypriot plaintiffs were entitled to sue British nationals in the civil court of Nikosia for the restitution of their plots of land located in Northern Cyprus. The landowners had been unlawfully expropriated by the Turkish authorities in Northern Cyprus. Their estates were finally sold by these authorities to the English defendants. Although the ECJ noticed that parallel proceedings were pending in the ECHR and that the ECHR had set up a specific regime for the restitution of land in the region, it allowed the civil action. As a result, the ECJ set up a parallel restitution regime under the Brussels I Regulation (for a critical appraisal of this case see Hess, Europäisches Zivilprozessrecht (2010), § 5, para 13).

    What is the common denominator of these cases? At first sight, they all relate to Article 1 of the Regulation Brussels I (or Article 1 of the parallel Lugano Convention) which determines the scope of the European procedural law. However, the specific issues were different: The Belgian application relates to the relationship between civil and insolvency proceedings (but equally to the delineation between domestic and harmonised proceedings); although Lechouritou and Apostolides addressed the delineation between civil proceedings and remedies under public international law. However, the Belgian case equally shows that a direct involvement of a State in civil litigation (especially in foreign courts) remains a delicate issue which may finally entail (parallel) litigation under public international law. Under public international law, States are responsible for infringements of international law committed by their domestic courts. Such infringements may also occur when domestic courts apply European procedural law.

    Further, the Belgian application shows the inherent weakness of the present Lugano regime: It does not provide for a uniform regime for the interpretation of the Convention. The ECJ is not involved. Protocol No 2 to the Convention only obliges the courts of the contracting parties to respect the case law of other Member States and especially the case law of the ECJ. However, under the new Lugano Convention (which shall enter into force in 2011), the situation will change considerably. As the Convention was ratified by the European Union last May, it will be (secondary) European law. Accordingly, the courts of EU Member States may refer to the ECJ for the interpretation of the new Convention under Article 267 TFEU. However, Swiss courts will not be allowed to address the ECJ. Thus, a judicial conflict as the current case will not be completely excluded. However, under the new Lugano Convention Belgium will not be able to institute proceedings against Switzerland for the violation of the (new) Lugano Convention as this instrument will bind the EU as a Contracting Party. Nevertheless, under the new Convention, the ECJ will be the final arbiter for the interpretation of the new Convention, as the Belgian courts may refer to the ECJ with regard to the interpretation of the Lugano Convention (cf. Hess, Europäisches Zivilprozessrecht, § 5, para 36 – 37). It remains to be seen whether the ECJ will allow Switzerland to take part in its proceedings (maybe as an amicus curiae) when the interpretation of the Lugano Convention is at stake.

    Finally, the question remains whether the ICJ is the most appropriate court for the interpretation of the Lugano Convention. The interpretation of a specific instrument of private international law is certainly not an every day business of the ICJ which normally decides matters of public international law like the delimitation of the continental shelf, border disputes, diplomatic and consular protection, state responsibility for genocide etc. Seen from this perspective, it might have been preferable to submit the issue to an ad hoc arbitral tribunal composed of experts of private international who are more familiar with the interpretation of the Lugano Convention. However, due to the high qualification and the reputation of the ICJ’s bench, a thorough and elaborated judgment on the interpretation of the Lugano Convention can be expected.

  2. Jochem Vlek says:

    Many thanks to prof. Hess for his remarks. In the interest of completeness I’d like to point out two things:
    – The website of the depository ( of the new Lugano Convention states that the Convention has entered into force just last week (01-01-2010) in respect of Denmark, Norway and the Community. Both Switzerland and Iceland still have to ratify.
    – With regard to your comment on Switzerland’s inability to take part in proceedings before the ECJ concerning the interpretation of the new Lugano Convention: It is my understanding that Switzerland (as well as the other non-EU member states that are party to the new Lugano Convention) has the right to submit written observations to the ECJ whenever the interpretation of the new Lugano Convention is at stake (of course, after ratification by Switzerland). This follows from Article 2 of the 2nd protocol to the new Lugano Convention. Further, under the new Lugano Convention, these States are also entitled to submit written observations whenever the ECJ is called upon (by a court of an EU-member state) to interpret the Brussels 1 Regulation. So, the ECJ will allow Switzerland to take part in those proceedings not by courtesy but by following strict legal obligation. This all contributes happily to pan-European procedural harmony.

    Finally, however qualified the ICJ might be, it does strike me as odd that if we follow Belgium’s reasoning, the ICJ might be called upon to decide as a ‘final court of appeal’ whether or not the Swiss Federal Court’s interpretation of the exclusion of insolvency matters in Article 1(2) of the Lugano Convention was correct. On the other hand, this logically follows from the procedural nature of the dispute (most notably the Belgian State being the main shareholder in Sabena). I’m not an expert in public international law but both Belgium and Switzerland have made the declaration under Article 36 of the Statute of the ICJ, which seems to clear the path for the ICJ’s jurisdiction.

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