Deutsche Bank AG v Comune Di Savona
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore,Lord Justice Gross,Lord Justice Floyd |
| Judgment Date | 27 July 2018 |
| Neutral Citation | [2018] EWCA Civ 1740 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2017/1700 |
[2018] EWCA Civ 1740
THE RIGHT HONOURABLE Lord Justice Longmore
THE RIGHT HONOURABLE Lord Justice Gross
and
THE RIGHT HONOURABLE Lord Justice Floyd
Case No: A3/2017/1700
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
HIS HONOUR JUDGE WAKSMAN QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Ms Sonia Tolaney QC, Mr Rupert Allen & Mr Andrew Lodder (instructed by Allen & Overy LLP) for the Claimant/Respondent
Mr Jonathan Davies-Jones QC & Mr Christopher Burdin (instructed by Seddons) for the Defendant/Applicant
Hearing dates: 10 th & 11 th July 2018
Judgment Approved
See Order at bottom of this judgment
Introduction
This is an appeal about two theoretically competing jurisdiction clauses. One's natural reaction is that it should be possible to assign any particular dispute to one or other such clause and that there should be no overlap between them. Thus in a judgment handed down on 22 nd January 2015 Popplewell J said in Monde Petroleum S.A. v Westernzagros Ltd [2015] 1 Lloyd's Rep 330 at paras 35–36:-
“35. Where there is more than one agreement between the same parties, and they contain conflicting dispute resolution provisions, the presumption of one stop adjudication dictates that the parties will not be taken to have intended that a particular kind of dispute will fall within the scope of each of two inconsistent jurisdiction agreements. They will fall to be construed on the basis that they are mutually exclusive in the scope of their application, rather than overlapping, if the language and surrounding circumstances so allow …
36. Nevertheless the possibility of fragmentation may be inherent in the scheme of the parties' agreements and clear agreements must be given effect to even if this may result in a degree of fragmentation in the resolution of disputes between the parties.”
In cases with a European law context it is necessary to consider Article 25 (ex Article 23) of what I will call the recast regulation i.e. Regulation (EU) No. 1215/2012 which provides for it to apply where the parties have agreed that a court has jurisdiction over:-
“disputes which have arisen … in connection with a particular legal relationship.”
In that context in a judgment handed down on 18 th March 2015 I said in Deutsche Bank v Petromena [2015] 1 WLR 4225 at paras 85–86:-
“85. English law cannot, however, be decisive of the matter in the European context. It is important to note that Article 23 is itself confined to agreements to settle disputes “which have arisen or which may arise in connection with a particular legal relationship.” The emphasis on the “particular legal relationship” shows that a dispute arising from a second relationship is not likely to be included in an agreement for resolving disputes in an earlier, and different, relationship. The European Court of Justice made exactly this point in Powell Duffryn Plc v M Petereit (case C-214/89) [1992] ECR 1–1745. Powell Duffryn was an English company which subscribed for shares in a German company which increased its capital but subsequently went into liquidation; the liquidator (Mr Petereit) sued Powell Duffryn in Germany for sums due in respect of the increase in capital and for dividends paid by mistake, relying on a clause inserted into the company statutes on a show of hands in a general meeting by which it was said that any shareholder submitted to the jurisdiction of the courts ordinarily competent to entertain suits against the company. Powell Duffryn asserted that it should be sued in the courts of its domicile. The Court of Justice was asked to rule on a number of questions including: “Does the jurisdiction clause satisfy the requirement that the dispute must arise in connection with a particular legal relationship within the meaning of Article 17 of the Brussels Convention?” [which later became Article 23 and is now Article 25].
86. The court held at para 34 that the requirements of Article 17 would be satisfied if the clause “may be interpreted as referring to the disputes between the company and its shareholders”, leaving it to the domestic court to determine whether the clause was to be so construed or not. In reaching that conclusion it said at para 31 that the requirement that the dispute arise in connection with a particular legal relationship:
“is intended to limit the scope of an agreement conferring jurisdiction solely to disputes which arise from the legal relationship in connection with which the agreement was entered into. Its purpose is to avoid a party being taken by surprise by the assignment of jurisdiction to a given forum as regards all disputes which may arise out of its relationship with the other party to the contract and stem from a relationship other than that in connection with which the agreement conferring jurisdiction was made.””
To similar effect in a judgment handed down on 30 th April 2015 Beatson LJ said in Trust Risk Group SpA v AmTrust Europe Ltd [2016] 1 All ER (Comm) 325:-
“[48] … In short, what is required is a careful and commercially-minded construction of the agreements providing for the resolution of disputes. This may include enquiring under which of a number of inter-related contractual agreements a dispute actually arises, and seeking to do so by locating its centre of gravity and thus which jurisdiction clause is “closer to the claim”. In determining the intention of the parties and construing the agreement, some weight may also be given to the fact that the terms are standard forms plainly drafted by one of the parties.
…
[59] … If the conclusion is that the parties made two contracts at different times which contain jurisdiction agreements for different countries, there is no presumption that the provisions in the more recent contract are intended to capture disputes … in the earlier contract even if the effect is a risk of fragmentation of the overall process for the resolution of disputes.”
These statements of principle (probably made in ignorance of each other's existence), helpful as they are, do not give much guidance in cases where it is genuinely difficult, or actually impossible, to assign a particular dispute to one jurisdiction clause or another. Conceptually it must be a possible conclusion that a dispute falls within the ambit of both jurisdiction clauses. The fact that the competing jurisdiction clauses are governed by different laws makes that possibility not unlikely. In that event the true position may be that the parties have agreed that either jurisdiction clause can apply rather than that one clause must apply to the exclusion of the other.
Facts
On 22 nd March 2007 the London branch of Deutsche Bank A.G. (“the bank”) and Comune di Savona (“Savona”) made a written agreement pursuant to which the bank agreed to provide certain services to Savona until 31 st December 2008. The judge held that these services included advisory services. The agreement was called “the Convention” and clause 13 provided:-
“GOVERNING LAW AND JURISDICTION
This Agreement shall be regulated and interpreted in conformity with Italian Law and disputes relating to it must be referred to the exclusive jurisdiction of the Court of Milan.”
About two months later on 6 th June 2007, the bank and Savona entered into a 1992 multicurrency ISDA Master Agreement with a schedule attached. Clause 13 provided:-
“GOVERNING LAW AND JURISDICTION
a) Governing Law. This Agreement will be governed by and construed in accordance with [English Law]
b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement … each party irrevocably:
i) submits to the jurisdiction of the English courts.”
The Master Agreement (as amended by the schedule) contained important provisions two of which were the “no advice clause” and the entire agreement clause which it is convenient to set out:-
“3(h) with respect to each party:
i) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanation related to the terms and conditions of a Transaction shall not be considered to be investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.
ii) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts the terms and conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.
iii) Status of Parties. The other party is not acting as a fiduciary for or adviser to it in respect of that Transaction….
…
9(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.”
Other clauses together with the Declarations sought by way of relief are set out in the Appendix to this judgment.
On 14 th June 2007 the bank and Savona executed swap confirmations confirming that Savona had made two interest rate swap transactions (“the Transactions”). The confirmations stated that they were subject to the terms of the ISDA Master...
To continue reading
Request your trial
-
Airbus S.A.S. v Generali Italia S.p.A.
...437, [2015] 2 Lloyd's Rep 154; Monde Petroleum S.A. v Westernzagros Ltd [2015] EWHC 67 (Comm), [2015] 1 Lloyd's Rep 330; Deutsche Bank AG v Comune di Savona [2018] EWCA Civ 1740 and BNP Paribas S.A. v Trattamento Rifiuti Metropolitani S.p.A. [2019] EWCA Civ 768, although all of these w......
-
Athena Capital Fund Sicav-Fis S.C.A. v Secretariat of State for the Holy See
...Global Markets Ltd v Amatra Leveraged Feeder Holdings Ltd [2012] EWHC 1331 (Comm); [2012] 2 CLC 279Deutsche Bank AG v Comune di Savona [2018] EWCA Civ 1740; [2018] 4 WLR 151; [2020] 1 BCLC 361, CADeutsche Bank AG v Sebastian Holdings Inc [2010] EWCA Civ 998; [2011] Bus LR D139; [2011] 1 All......
-
BNP Paribas S.A. v Trattamento Rifiuti Metropolitani S.P.A.
...all and do so in a careful and commercially-minded way: see Trust Risk Group at [48] and the recent Court of Appeal decision in Deutsche Bank AG v Savona [2018] EWCA Civ 1740 at [3]. (2) The clauses need to be construed in the light of the transaction as a whole, taking into account the ov......
-
Banca Intesa Sanpaolo SPA v Comune Di Venezia
...v Regione Calabria [2012] EWHC 699 (Comm) and later Dexia Crediop S.P.A. v Provincia Di Brescia [2016] EWHC 3261 (Comm) and Deutsche Bank AG v Comune di Savona [2017] EWHC 1013 (Comm); [2018] EWCA Civ 1740), or applications by the banks for declarations as to the validity of the swap tr......
-
Competing Jurisdiction Clauses In Interest Rate Swap Cases
...clarity on the approach the Courts should take when faced with competing jurisdiction clauses. In Deutsche Bank AG v Comune di Savona [2018] EWCA Civ 1740 (27 July 2018) the Court of Appeal overruled an earlier decision of the lower court, drawing on the recent Commercial Court decision of ......
-
English court’s jurisdiction over Italian swaps dispute confirmed
...of them is in an ISDA Master Agreement. Allen & Overy acted for the successful respondent bank: Deutsche Bank AG v Comune di Savona [2018] EWCA Civ 1740, 27 July 2018 Deutsche Bank AG (the Bank) and Comune di Savona (Savona) entered into two interest rate swaps in June 2007 under a 1992 ISD......
-
High Court Reaffirms Primacy Of ISDA Master Agreement Jurisdiction Clause Post-Brexit
...Paribas SA v Trattamento Rifiuti Metropolitani SPA [2019] EWCA Civ 1740 (read our blog post) and Deutsche Bank AG v Comune di Savona [2018] EWCA Civ 1740 (read our blog post). These judgments were made pursuant to Article 25 of the Recast Brussels Regulation, which governs the question of j......
-
Piedmontese Struggle To Consume Full English
...the ISDA entire agreement clause is "clear and unambiguous". This was reflected by the decision in Deutsche Bank v Commune di Savona [2018] EWCA Civ 1740, which said that the ISDA Master Agreement is "self-contained" agreement, exclusive of prior dealings. The court was not persuaded that T......