Barclays Bank Plc v Ente Nazionale Di Previdenza Ed Assistenza Dei Medici E Degli Odontoiatri

JurisdictionEngland & Wales
JudgeLord Justice Moore-Bick,Lord Justice Tomlinson,Mr. Justice Arnold
Judgment Date08 December 2016
Neutral Citation[2016] EWCA Civ 1261
Docket NumberCase No: A3/2015/3809
CourtCourt of Appeal (Civil Division)
Date08 December 2016
Between:
Barclays Bank Plc
Claimant/Respondent
and
Ente Nazionale Di Previdenza Ed Assistenza Dei Medici E Degli Odontoiatri
Defendant/Appellant

[2016] EWCA Civ 1261

Before:

Lord Justice Moore-Bick

Vice-President of the Court of Appeal, Civil Division

Lord Justice Tomlinson

and

Mr. Justice Arnold

Case No: A3/2015/3809

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Mr. Justice Blair

[2015] EWHC 2857

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr. Mark Hapgood Q.C. and Mr. Alan Roxburgh (instructed by Trowers & Hamlins LLP) for the appellant

Miss Sonia Tolaney Q.C. and Mr. Adam Sher (instructed by Freshfields Bruckhaus Deringer LLP) for the respondent

Hearing date: 17 th November 2016

Lord Justice Moore-Bick
1

This is an appeal from the order of Blair J. dismissing the appellant's application under CPR Part 11 and giving summary judgment in favour of the respondent on its claim for a declaration that the claims being made by the appellant in proceedings in Milan fall within the scope of agreements between the parties that the English courts are to have jurisdiction to determine their dispute.

2

On 21 st September 2007 the appellant, Ente Nazionale di Previdenza ed Assistenza dei Medici e degli Odontoiatri ("ENPAM") entered into an agreement with the respondent, Barclays Bank Plc ("Barclays"), described as a "Conditional Asset Exchange Letter" ("the Letter Agreement") for the exchange of various financial assets, including certain Secured Limited Recourse Credit-Linked Notes ("the Notes"). In October 2007 the parties entered into two supplemental agreements, but nothing directly turns on them. Some months later, on 31 st March 2008 the parties entered into a Professional Client Agreement ("PCA") containing the terms by which all existing and future business between them should be governed. The Letter Agreement and the PCA each contained an English jurisdiction clause and an indemnity clause under which ENPAM agreed to indemnify Barclays against the consequences of any breach of the agreement.

3

ENPAM is an Italian body which manages a fund for the benefit and welfare of doctors and orthodontists. It says that the transaction covered by the Letter Agreement was not one that was appropriate for a body of its kind and that the Notes in particular were an unsuitable form of investment. It claims that it was misled into entering into the agreement by two members of Barclays' staff who were acting in contravention of Italian law relating to the selling of financial products and that it has suffered a serious loss as a result.

4

On 12 th June 2014 ENPAM, without any warning, commenced proceedings against Barclays in Milan. There were two heads of claim. The main claim was for damages for breach of the duty of good faith and failure to comply with Italian financial regulations in connection with the negotiation and execution of the Letter Agreement contrary to articles 1337 and 2043 of the Italian Civil Code. It was common ground that it would be characterised by English law as a claim in tort and consistently with that formulation of its claim ENPAM relied on article 5(3) of the Judgments Regulation ( Regulation (EC) No. 44/2001) as giving the court in Milan jurisdiction. The secondary claim was for a declaration that as a result of Barclays' misconduct the Letter Agreement and the subsequent agreements between the parties should be declared null and void or should be cancelled for fraud or mistake. The court is said to have jurisdiction over the secondary claim as a result of its right to assert jurisdiction over the primary claim. In its statement of claim in Milan ENPAM asserted that the jurisdiction clause in the Letter Agreement was invalid, but it made no express reference to the PCA or the jurisdiction clause which it contained and the PCA was not included in the index of relevant documents attached to the statement of claim.

5

On 15 th September 2014 Barclays commenced proceedings against ENPAM in the Commercial Court seeking damages for breach of the jurisdiction clauses in the Letter Agreement and the PCA. On 20 th April 2015 ENPAM responded by applying under CPR Part 11 for a declaration that the court should not exercise its jurisdiction to hear the action and for an order staying the proceedings pursuant to articles 27 or 28 of the Judgments Regulation. On 18 th May 2015 Barclays issued an application for summary judgment on its claim. On 31 st July 2015 Flaux J. directed that that application be heard at the same time as ENPAM's application, subject to the directions of the judge hearing the applications.

6

On 14 th September 2015 the applications came on for hearing before Blair J. In the course of the proceedings Barclays agreed not to pursue its claim under the indemnity clause in the Letter Agreement and to amend its claim form and particulars of claim accordingly. On that basis the judge held that the proceedings in London and Milan did not involve the same cause of action within the meaning of article 27, which was therefore not engaged. It was common ground that the proceedings were "related" within the meaning of article 28, but the judge declined to stay the English proceedings because he did not think that the common issues were substantial, because he was satisfied that the English jurisdiction clauses applied to the disputes between the parties and because the proceedings in Milan had been deliberately based on a claim in tort which enabled the court there to assume jurisdiction under article 5(3) of the Judgments Regulation. He also held that it was appropriate to give summary judgment for Barclays on its claim for a declaration that in bringing the claims in Milan ENPAM was in breach of the jurisdiction clauses in the Letter Agreement and the PCA.

Subsequent developments in Milan

7

Blair J. delivered his judgment on 9 th October 2015. In the course of it he pointed out that in the Milan proceedings ENPAM had not expressly alleged that the PCA or the jurisdiction clause which it contained were affected by Barclays' alleged illegal conduct and had not sought any relief in relation to the jurisdiction clause in the Letter Agreement. On 18 th December 2015 ENPAM served a document in the Milan proceedings described as a "Brief" pursuant to Article 183 of the Italian Code of Civil Procedure. The precise nature of this document was the subject of some debate, but it appears to combine what in England would be a reply with further development and elucidation of the original claim. Since the sixth paragraph of Article 183, under which the document is said to be served, makes provision for filing pleadings modifying claims previously filed and for time to reply to any new claims, it appears that the document can be used to raise a new claim.

8

In its brief ENPAM expanded its case on jurisdiction to include a specific averment that the PCA itself and the jurisdiction clauses in both that agreement and the Letter Agreement were invalid and of no effect and a prayer for a declaration that the jurisdiction clauses were null and void. Armed with that amendment ENPAM sought permission to adduce it as fresh evidence in support of its case on this appeal, it being said that under Italian procedural law it took effect as from the date of the original claim. By this means ENPAM sought to make good retrospectively the defects which the judge had identified in its claim in Milan.

9

In support of his application to adduce this material Mr. Hapgood submitted that ENPAM could not have relied on it before the judge because the document did not then exist. He also submitted that the document did no more than clarify the statement of claim to remove any doubt that the reference to "other agreements" had been intended to include the PCA. This latter submission is in my view untenable, given the precision with which the documents that are relied on are identified in the original pleading. As to the former, it is true, of course, that the brief had not come into existence when the matter was before the judge, but that is only because it is a thinly disguised attempt to make good defects identified in the judgment. An attempt of this kind to rely on a doctrine of relation back under Italian law seems to me to raise a number of difficulties, not least in relation to the date when the court in Milan was seised of the new claims for the purposes of article 27. If the question were simply one of exercising our discretion, I would not be in favour of allowing ENPAM to rely on this opportunistic manoeuvre to plug the gaps which the judge identified in its case. Clearly, the new allegations in the brief could have been included in the original pleading and could have been put before the judge. Strictly speaking, if it wishes to rely on the brief ENPAM needs the court's permission to file additional evidence exhibiting it and for the reasons I have given I would refuse it on the grounds that it comes too late.

10

However, I do not think that the issue can be disposed of in that simple and straightforward way, because, if ENPAM is right in saying that under Italian procedural law the allegations in the brief relate back to the date of the statement of claim, it is necessary to consider whether we are bound to stay the English proceedings under Article 27 of the Judgments Regulation, whatever may have been the position before the judge. I do not think it would be right, therefore, for us simply to refuse permission to adduce the brief in evidence, since that would amount to shutting our eyes to developments which, for better or worse, have now taken place in Milan. Those developments raise questions concerning the date at which the application of Article 27 is to be determined and the time when the court in Milan was seised of the new claims for the purpose of...

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