EUPillar JP Morgan Chase Bank NA v Berliner Verkehsbetriebe (BVG) [2010] EWCA Civ 390

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. On 9th July 2009, the English High Court dismissed the jurisdictional challenge. An appeal was made before the Court of Appeal. On 28th April 2010, the appeal was dismissed. Lord Justice Aikens: “87 […] a court has to undertake an exercise in “overall classification” and make an “overall judgment” to see whether the proceedings are “principally concerned” with one of the matters set out in art.22. […]. 88 […] the interpretation […] fits with the wording of art.25 . It also fits with the objective of art.22 , which is to give exclusive jurisdiction to the courts of the state which will be best suited to dealing with the relevant issue, depending on which paragraph of art.22 is in play. It is only necessary to displace the general rule as to jurisdiction or the parties’ own agreed jurisdictional choice if, making an overall judgment, it is clear that granting jurisdiction to the courts of the relevant state (where the land is; where the company has its seat; where the patent is registered etc.) will result in the sound administration of justice. In the context of art.22.2 , this will not be the case unless, overall, the proceedings are so closely connected with matters of local company law and internal corporate decision making in respect of the company that the proceedings should not be tried anywhere but in the courts of the state where the company has its seat.” [87-88] 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.