When it comes to parallel proceedings in the European judicial area, Article 21 of the Brussels and the Lugano Conventions gives a strong incentive to the litigants to act promptly. By launching proceedings before the other party, one can block with a guillotine-like certainty all other proceedings between the same parties concerning the same dispute. Article 21 of the twin Conventions grants indeed priority to the court first seised in time. The present case shows that this 'crude but simple' rule - priority is given to one of the two courts seised not on account of its competence to deal with the particular litigation, or of its geographical proximity with the case - can give rise to a very sophisticated litigation strategy.
In 1993 proceedings were launched both in Switzerland and in England in a dispute concerning liability for the losses incurred by an English company which had been placed under administration. The administrator threatened to sue three companies - two domiciled in Switzerland and one in New York - which were owned by the principal shareholder and managing director of the English company. According to the administrator, the three companies had illegaly benefited from the transfer by the director of assets from the English company. He granted the three companies 14 days to react and submit a comprehensive repayment plan. Two days before the end of this term, the three companies seised the Swiss court of a claim for a declaration that they were not liable for the money claimed. The day after these proceedings were issued, the administrator referred the matter to the English court. There ensued a conflict between the two parties as to the date on which an action is pending for the purposes of Article 21 (II). Before answering this vexed question, the Swiss Supreme Court had to determine whether the English and the Swiss proceedings were identical (I). While remaining true to the European nature of the lis pendens rule, the Court managed to curb certain abuses Article 21 can lead to. This decision will certainly make Switzerland less attractive for forum shoppers.European Review of Private Law