The freezing order in question was sought in support of an arbitral award regarding a dispute related to a share purchase agreement. The award, which was rendered by a sole arbitrator in London, ordered the award debtors to pay approximately US$ 5 million to the award creditors. To secure payment, the award creditors requested the freezing of one of the award debtor's real estate properties and all movable assets in Switzerland. The lower court granted the freezing order. However, it was disputed throughout the subsequent court instances, whether the arbitral award constituted a recognisable and valid basis for freezing assets in Switzerland.

In its decision of 21 December 2012, the Swiss Supreme Court ruled that, regardless of whether the decision was issued by a Swiss or a foreign arbitral tribunal, an arbitral award qualifies as an enforceable decision in terms of the Swiss Debt Enforcement and Bankruptcy Act (DEBA). As such, it may provide a valid ground for freezing assets located in Switzerland.

The Supreme Court clarified that no preceding decision on the recognition and enforceability of a foreign award is necessary for a freezing order to be granted under Swiss law. The incidental decision on the exequatur (that is, a decision on the award's recognition in Switzerland as part of the freezing order procedure), was found to be in accordance with the summary nature of the proceedings.

As a consequence of this decision, regardless of whether the debtor is domiciled in or outside Switzerland, assets of an award debtor that are located in Switzerland can be frozen if a creditor furnishes prima facie evidence that the award is recognisable and enforceable in Switzerland. This means that not all formal requirements of the New York Convention must be fulfilled for a freezing order to be granted.

Given that, for procedural reasons, the Supreme Court only had limited power of review, the decision must be interpreted with some caution as lower courts are not strictly bound by it. However, the very careful and thorough reasoning applied by the Swiss Supreme Court makes it highly unlikely that lower courts will deviate from this decision in the near future.

Case: 5A_355/2012.