The importance of injunctive relief has been constantly in the rise. Strategic litigation is more than filing solid briefings and waiting for the court to decide, all too often after several years only. Freezing a counterparty's assets, securing evidence, or preventing damage or legal disadvantages from occurring can make a decisive difference and thus be a game-changer in a litigation.
Under Swiss law, injunctive relief requires the applying party to render plausible to the Court that:
- it has a prima facie (good arguable) case against its counterparty;
- its claim is infringed or threatened;
- there exists a risk of irreparable damage or loss;
- the matter is urgent and does not, therefore, allow the requesting party to wait for the result of full-fledged subject-matter proceedings; and
- the requested injunctive relief is proportionate.
There is no numerus clausus of available injunctive relief. In essence, the Court can order whatever is necessary and suited to prevent damage from occurring.
In order to decide upon an application for injunctive relief, the Court will conduct a balance of probabilities and a balance of interest. It may also order the applying party to deposit security, whether upon application by the counterparty or otherwise. Likewise, it may find that no injunctive relief is warranted anymore if the counterparty deposits security by virtue of which the applying party's interests are already adequately protected.
In particularly urgent cases, injunctive relief can be granted ex parte. Since only the applying party is heard, the hurdles are particularly high, and the court will be particularly reluctant to make orders that have the potential to cause irreparable damage to the counterparty. Also, it will make sure to fix a return date as soon as practicable to limit the validity of the ex parte relief to the bare minimum, but also to be able to reassess the situation after it has duly heard both parties.
A party who believes to be the likely target of ex parte relief can file a so-called pre-emptive brief in which it attempts to disprove the likely allegations in a potential request for ex parte relief and also indicates that it is at all times available for a hearing, even at short notice, so there is no actual need for ex parte relief. The challenge with pre-emptive briefs is to make sure they are deposited with all potentially relevant (i.e., competent) Courts. The party filing a pre-emptive brief must deposit a nominal court fee and make sure it renews its brief every six months.
Pre-emptive briefs are also available against requests for the freezing of assets (so-called attachments). Requests for attachments are invariably filed ex parte. They require a particular ground (such as dissipation of assets or else a sufficiently robust title, such as a Swiss or foreign judgment or award or a recognition of debt by the counterparty). In addition, the applying creditor must indicate and (prima facie) evidence the assets (e.g., bank accounts) to be frozen.
Both normal injunctive relief and attachment need to be validated. Injunctive relief is, by definition, only provisional in nature. To the extent the subject-matter proceedings have not yet been conducted (or at least commenced), the Court will set the applying party a time-limit to commence them. If that time-limit is not complied with, the injunctive relief will lapse automatically. This means that parties applying for injunctive relief must invariably think several steps ahead before rushing into proceedings.
Should you have any relevant questions, please feel free to contact us.
Author: Thomas Weibel
