Case of the Day: EFG Bank v. AXA Equitable Life

The case of the day is EFG Bank AG, Cayman Branch v. AXA Equitable Life Insurance Co. (S.D.N.Y. 2018). The judge had previously denied a motion by EFG, a Swiss bank, for a protective order that would have required AXA to seek discovery of information located in Switzerland via the Hague Evidence Convention. EFG sought reconsideration.

The claim was that the judge had made a clear error in light of Article 271 of the Swiss Criminal Code—the Swiss blocking statute, which AXA would violate by producing the discovery in response to an ordinary discovery request.

The judge noted that the issue wasn’t whether discovery under the FRCP would violate Swiss law, but whether there was a real risk of prosecution sufficiently great to warrant a protective order. And unsurprisingly, he held the answer to that question was no. In France there is at least the Christopher X case, but apparently in Switzerland there are no cases of criminal convictions for violations of the blocking statute in cases involving US discovery, or at least EFG could not cite any.

Just by way of overview and reminder, there is no requirement in US law of first resort to the Hague Evidence Convention—that’s the holding of Aerospatiale. Courts should take foreign blocking statutes seriously—maybe more seriously than they sometimes do—but ultimately it’s the risk of prosecution, not the mere fact of a violation, that may tip the scales against a protective order. The judge doesn’t mention it as a factor here, but perhaps the fact that the Swiss company was the plaintiff in this US litigation weighs against a protective order, too.

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