Belgium initiates 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 civ

INTERNATIONAL COURT OF JUSTICE

Peace Palace, Carnegieplein 2, 2517 KJ The Hague, Netherlands
Tel.: +31 (0)70 302 2323 Fax: +31 (0)70 364 9928
Website: www.icj-cij.org

Press Release
Unofficial

No 2009/36
22 December 2009

Belgium initiates 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

THE HAGUE, 22December 2009. The Ki ngdom of Belgium initiated proceedings
yesterday before the International Court of Justi ce (ICJ) against the Swiss Confederation in respect

of a dispute concerning:

“the interpretation and application of th e Lugano Convention of16 September1988
on jurisdiction and the enforcement of judgments in civil and commercial matters . . .,
and the application of the rules of general in ternational law that govern the exercise of

State authority, in particular in the judicial domain, [and relating to] the decision by
Swiss courts not to recognize a decision by Belgian courts and not to stay proceedings
later initiated in Switzerland on the subject of the same dispute”.

In its Application Belgium states that the dispute in question “has arisen out of the pursuit of

parallel judicial proceedings in Belgium and Switz erland” in respect of the civil and commercial
dispute between the “main shareholders in Sabena, the former Belg ian airline now in bankruptcy”.
The Swiss shareholders in question are SAirGroup (formerly Swissair) and its subsidiary
SAirLines; the Belgian shareholders are the Belg ian State and three companies in which it holds
the shares.

The Applicant affirms that “in connection with the Swiss companies’ acquisition of equity in
Sabena in1995 and with their partnership with the Belgian shareholders, contracts were entered
into, between1995 and 2001, for among other thi ngs the financing and joint management of
Sabena” and that this set of contracts “provide d for exclusive jurisdiction on the part of the

Brussels courts in the event of dispute and for the application of Belgian law”.

Belgium states in its Application that, “on 3July2001, taking the position that the Swiss
shareholders had breached their contractual commi tments and non-contractual duties, causing [the

Belgian shareholders] injury”, the Belgian shar eholders sued the Swiss shareholders in the
commercial court of Brussels, seeking damages to compensate for the lost investments and for the
expenses incurred “as a result of the defaults by the Swiss shareholders”. After finding jurisdiction
in the matter, that court “found various instances of wrongdoing on the part of the Swiss
shareholders but rejected the claims for damag es brought by the Belgian shareholders”. Both

Parties appealed against this decision to the Court of Appeal of Brussels, which in 2005 by partial
judgment upheld the Belgian courts’ jurisdiction over the dispute on the basis of the Lugano
Convention. The proceedings on the merits are pending before that court and the case will be
pleaded there in February and May 2010. - 2 -

In various proceedings concerning the application for a debt-restructuring moratorium
(sursis concordataire ) submitted by the Swiss companies to the Zurich courts, the Belgian

shareholders sought to declare their debt claims ag ainst them. It is asserted that the Swiss courts,
including in particular the Federal Supreme Cour t, have however refused to recognize the future
Belgian decisions on the civil liability of the Swi ss shareholders or to stay their proceedings
pending the outcome of the Belgian proceedings. According to Belgium, these refusals 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”.

The Applicant states that its Ambassador to the Swiss Confederation informed the Swiss

Minister for Foreign Affairs on 29June2009 of Belgium’s intention to refer the dispute to the
International Court of Justice. On 26 November 2009 Belgium’s embassy in Berne confirmed this
intention by note verbale, asking to be informed of the Swiss authorities’ position on such a
procedure.

To found the jurisdiction of the Court, Belg ium cites solely the unilateral declarations
recognizing the compulsory jurisdiction of the ICJ made by the Parties pursuant to Article36,
paragraph2, of the Statute of the Court, on 17June1958 (Belgium) and 28July1948

(Switzerland), and still in effect. The Applican t notes that the Lugano Convention “contains no
dispute settlement clause” placing conditions on recourse to the ICJ and that the Court of Justice of
the European Communities “is without jurisdiction in the area”.

Concluding its Application, Belgium requests the Court to adjudge and declare that:

⎯ “the Court has jurisdiction to entertain the dispute between [Belgium and
Switzerland] concerning the interpretation and application of the Lugano

Convention of 16September1988 on jurisdiction and the enforcement of
judgments in civil and commercial matters, and of the rules of general
international law governing the exercise by St ates of their authority, in particular
in the judicial domain;

⎯ Belgium’s claim is admissible;

⎯ Switzerland, by virtue of the decision of its courts to hold that the future decision
in Belgium on the contractual and non-contractual liability of SAirGroup and
SAirLines to the Belgian State and Zephy r-Fin, S.F.P. and S.F.I. (since merged,
having become SFPI) will not be recognized in Switzerland in the SAirGroup and

SAirLines debt-scheduling proceedings, is breaching the Lugano Convention, and
in particular Articles1, second paragraph, provision(2); 16(5); 26, first
paragraph; and 28;

⎯ Switzerland, by refusing to stay the pro ceedings pursuant to its municipal law in
the disputes between, on the one hand, the Belgian State and Zephyr-Fin, S.F.P.
and S.F.I. (since merged, having become SFPI) and, on the other, the estates
(masses) of SAirGroup and SAirLines, companies in debt-restructuring liquidation

(liquidation concordataire), specifically on the ground that the future decision in
Belgium on the contractual and non-c ontractual liability of SAirGroup and
SAirLines to the Belgian State and Zephy r-Fin, S.F.P. and S.F.I. (since merged,

having become SFPI) will not be recognized in Switzerland in the SAirGroup and
SAirLines debt-scheduling proceedings , is breaching the rule of general
international law that all State authority, especially in the judicial domain, must be
exercised reasonably;

⎯ Switzerland, by virtue of the refusal by its judicial authorities to stay the
proceedings in the disputes between, on the one hand, the Belgian State and - 3 -

Zephyr-Fin, S.F.P. and S.F.I. (since merged, having become SFPI) and, on the
other, the estates ( masses) of SAirGroup and SAirLines, companies in

debt-restructuring liquidation (liquidation concordataire), pending the conclusion
of the proceedings currently taking place in the Belgian courts concerning the
contractual and non-contractual liability of SAirGroup and SAirLines to the
first-cited parties, is violating the Lugano Convention, and in particular Articles 1,

second paragraph, provision (2); 17; 21; and 22; as well as Article 1 of Protocol
No. 2 on the uniform interpretation of the Lugano Convention;

⎯ Switzerland’s international responsibility has been engaged;

⎯ Switzerland must take all appropriate steps to enable the decision by the Belgian
courts on the contractual and non- contractual liability of SAirGroup and

SAirLines to the Belgian State and Zephy r-Fin, S.F.P. and S.F.I. (since merged,
having become SFPI) to be recognized in Switzerland in accordance with the
Lugano Convention for purposes of the debt-scheduling proceedings for
SAirLines and SAirGroup;

⎯ Switzerland must take all appropriate steps to ensure that the Swiss courts stay
their proceedings in the disputes between, on the one hand, the Belgian State and
Zephyr-Fin, S.F.P. and S.F.I. (since merged, having become SFPI) and, on the

other, the estates ( masses) of SAirGroup and SAirLines, companies in
debt-restructuring liquidation (liquidation concordataire), pending the conclusion
of the proceedings currently taking place in the Belgian courts concerning the
contractual and non-contractual liability of SAirGroup and SAirLines to the first-

cited parties.”

Belgium further requests that the case be hear d by a chamber of the Court, in accordance
with Article 26, paragraphs 2 and 3, of the Statute of the Court and with Article 17, paragraph 1, of

the Rules of Court. Lastly, the Applicant reserves the right to ask the Court to indicate provisional
measures, “depending on further developments in the proceedings now pending in Switzerland and
Belgium”.

___________

The complete text of Belgium’s Application will soon be available on the Court’s website
(www.icj-cij.org).

___________
Information Department:

Mr. Andrey Poskakukhin, First Secretary of the Court, Head of Department (+31 (0)70 302 2336)

Messrs. Boris Heim and Maxime Schouppe, Information Officers (+31 (0)70 302 2337)
Ms Joanne Moore, Associate Information Officer (+31 (0)70 302 2394)
Ms Barbara Dalsbaek, Administrative Assistant (+31 (0) 70 302 2396)