EUPillar JP Morgan Chase Bank NA v Berliner Verkehsbetriebe (BVG) Antsalt des Offentlichen Rechts [2009] EWHC 1627 (Comm)

Summary

The claimants were global providers of banking and financial services. The defendant was a German public institution which was responsible for the provision and operation of Berlin public transport system. The claimants were suing for approximately $112 million. They claimed that the sum was due under an independent collateral enhancement transaction. As a part of this transaction, the defendants sold to the claimants’ protection against the credit risk of 150 companies (the JPM swap). The agreement contained an English jurisdiction clause. The English proceedings were commenced - the amended claim form was dated 21st January 2009. There were parallel proceedings in Germany. But, the English court was the first seised one. The defendant challenged the jurisdiction of the English court, submitting that the JPM swap was invalid as it was ultra vires. On this basis, the defendant applied for an order that the English court had no jurisdiction, invoking Article 22(2). To this end, it was alleged that the dispute concerned the authority of the board to enter into the swap agreement. The English High Court dismissed the jurisdictional challenge, assuming jurisdiction. Mr Justice Teare stated: “51 […] I have difficulty in concluding that these proceedings are principally concerned with the ultra vires issue or that the principal subject matter of proceedings is the ultra vires issue or that the proceedings are in substance concerned with the ultra vires issue. Rather, taking into account all aspects of the litigation, in so far as they are apparent from the materials before the court, and seeking to form an overall judgment, these proceedings can fairly and properly be described as being principally concerned with a claim by JPM to enforce the JPM Swap and a likely defence and counterclaim by BVG based on misrepresentation, non-disclosure and breach of duty by JPM of a consultancy contract arising out of what was said or not said by JPM to BVG before the JPM Swap was entered into. But the proceedings will also involve the determination of an important preliminary issue, namely, whether the JPM Swap was ultra vires BVG. […] 53 Having reviewed the proceedings before this court “overall” I have concluded that they are not principally concerned with the issue of ultra vires and that the issue of ultra vires, viewed in its context, is not one which the policy underlying art.22(2) requires to be decided by the German courts.” [51-53]. An appeal was made. On 28th April 2010, the appeal was dismissed by the Court of Appeal. The case even reached the UK Supreme Court and the Court of Justice of the European Union (C-54/11). After the UK Supreme Court received a copy of the judgment in Case C-144/10, Berliner Verkehrsbetriebe (BVG), Anstalt des öffentlichen Rechts v JP Morgan Chase Bank NA, the UK Supreme Court informed the Court of Justice that “it did not wish to maintain the reference.” See Order of the President of the Court dated 5th July 2011.