Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

+5
A "Swiss Torpedo" is called a delay tactic because it is a procedural move used in international litigation to intentionally block or slow down foreign court proceedings by initiating an earlier, often superficial, legal action in Switzerland. This tactic exploits the lis pendens rule, which generally requires courts in many jurisdictions (including those under the Lugano Convention) to stay their proceedings if a case involving the same parties and subject matter is already pending elsewhere.
Loyens & Loeff
Loyens & Loeff
+2
Here is why it is considered a delay tactic:
Establishes Preemptive Jurisdiction: By filing a request for conciliation in Switzerland first, a party can lock in the Swiss forum. Even if the claim is just a "negative declaratory action" (a suit asking a court to declare that the filer is not liable), it forces the foreign court to wait, often for a significant time.
Low Threshold for Activation: According to recent Swiss Federal Supreme Court case law, a case becomes pending as soon as a voluntary conciliation request is filed, even if conciliation is not strictly required. This allows a party to start the "torpedo" immediately without having to prepare a full, substantive lawsuit.
Neutralizes Foreign Courts: If a party breaches a "choice of court" agreement to litigate elsewhere (like England), a Swiss torpedo can stall those proceedings for years while Swiss courts, which are notoriously methodical, determine their own jurisdiction.
Creates Parallel Proceedings: It forces the opposing party to engage in a foreign, often inconvenient, legal system, thereby increasing costs and delaying final resolution.
VISCHER
VISCHER
+4
In cases like Lehman Brothers Finance (LBF) v Enasarco, this strategy was used to delay a $61.5 million payout by creating a prolonged jurisdictional battle between Swiss and English courts. While English courts have become more robust in protecting their own "choice of court" clauses, the Swiss torpedo remains a powerful tool to disrupt the immediate progress of cross-border litigation.