Summary
On the claimant’s side, there were two banks – Depfa (Ireland) and Dexia (Italy). The defendant was an Italian public authority. The dispute was in respect of two Swap Agreements which included an English jurisdiction clause.
There were parallel proceedings.
The English proceedings were commenced on 26th June 2009 (initially they were limited to declaratory relief, but subsequently, in September 2009, the claim forms were amended to include money claims.
The Italian proceedings were administrative in their nature. In the administrative proceedings, the claimants sought to annul a defendant’s decision which was in breach of the swap agreements.
In the English proceedings, the defendant challenged the English court’s jurisdiction, submitting that the dispute was in the scope of Article 22(2) of Brussels I. The defendant’s application was dismissed. In this context, Mr Justice Hamblen held:
“64 In all the circumstances, I consider that the proceedings are not likely to be ‘principally concerned’ with the validity of the decisions of the Defendant. That will be an important issue, although not in itself decisive issue because of the further issues of capacity/power/legality. Given in particular that the invalidity issue is not likely to be the only ground upon which the enforceability of the Swap Contracts is challenged, I accept that, as in the JP Morgan v BVG case, as a matter of ‘overall classification’ these proceedings are ‘principally concerned’ with the validity of the Swap Contracts and whether the Claimants can enforce their rights under them.
65 Nor do I consider that this is a case which in the making of an ‘overall judgment’ it is clear that granting jurisdiction to the courts of Italy will result in the sound administration of justice. In particular, this is not a case in which the proceedings are so closely connected with matters of internal decision making by the Defendant entity that they should not be tried anywhere but in the courts of Italy. There will be no inquiry in the present case into the internal decision making procedures of the Defendant. The real battleground on the violation of law issue will be whether the laws apply to derivatives at all and, if so, whether there was a violation and, if so, whether the Swap Contracts are or are not enforceable.” [64-65].
The matter reached the English High Court again. In another case ([2012] EWHC 687 (Comm)), Mr Justice Teare noted that it was not only the English court that considered that it had jurisdiction, but also the Italian Administrative Court ruled that it had jurisdiction to determine whether the Swaps were valid and binding on. In the circumstances, the Banks made request to the English High Court for a preliminary reference. They wanted for the Court of Justice to opine on whether the matter was within the scope of Article 1 of Brussels I. Mr Justice Teare rejected the request, and justified his decision as follows:
"31 although there are reasons for resolving the unsatisfactory situation which has arisen by this court making a reference to the ECJ, I would not, in the exercise of the court’s discretion, make the requested reference. In circumstances where neither party has suggested that the proceedings in England do not involve civil or commercial matters but where there is a real dispute between the parties as to whether Pisa’s proceedings in Italy involve administrative or civil or commercial matters it seems to me preferable that the unsatisfactory situation which would prevail if the Italian Supreme Court dismisses the Banks’ appeal should be resolved by the Italian Supreme Court referring to the ECJ the question whether arts 121 and 122 of the Italian Code of Administrative Procedure are compatible with the Judgments Regulation. [...]“ [2012] EWHC 687 (Comm) [31]