Summary
There were two sets of substantive contracts between the parties. First, there was an advisory contract between UBS Limited and an Italian Bank, BNL. Under this agreement, UBS Limited had to perform certain services regarding a regional debt. The agreement included an Italian law and jurisdiction clause. Second, there were a number of interest rate swap transactions with Calabria. The transactions were governed by an ISDA Master Agreement which included an English law and jurisdiction clause.
On 8th April 2010, the proceedings were first initiated by Calabria before the Italian court of Catanzaro. Calabria was seeking redress from UBS. However, the proceedings were issued against UBS Warburg AG, which was wrongfully considered to be a company formed under English law.
On 23rd December 2010, UBS Limited and UBS AG started court proceedings in England, seeking a series of negative declarations against Calabria. In other words, on the claimant’s side in the English proceedings, there were two companies from the UBS Group. The first claimant was an English subsidiary, UBS Limited. The second claimant was the parent company, UBS AG.
The defendant, Calabria, challenged the jurisdiction of the English court, and requested a stay of the English proceedings under Articles 27 and 28 of Brussels I.
Were the requirements of Article 27 satisfied in respect of the proceedings against UBS Limited? The English court answered this question in affirmative, holding that the English proceedings against UBS Limited had to be stayed under Article 27 of Brussels I. This gave rise to the questions: Were the actions against UBS AG related within the meaning of Article 28? And should the English court stay its proceedings? The English court held that the actions were related and the English proceedings were to be stayed under Articles 27 and 28.
Mr Justice Popplewell held that:
“51 In my judgment the fact that the summons itself identifies with reasonable clarity that the claim is advanced against UBS Ltd renders the service on the London place of business of its parent company, UBS AG, sufficient to identify with sufficient certainty the intention that such service was to be on UBS Ltd for the purposes of art.160. Even if there were room for some doubt, this is to be resolved in favour of UBS Ltd and there would not be “total uncertainty” about it.
52 If I were wrong in this conclusion, I would have found that any defect in service was cured by the Appearance filed by UBS Ltd and that such cure operated retrospectively to the date of the original purported service.”
[…]
64 […] In this case the discretionary factors point strongly towards granting a stay:
i) the degree of overlap is such that the risk of conflicting decisions is substantial and acute;
ii) the Italian tort claims are governed by Italian law which an Italian court is best placed to determine. Against this it is said on behalf of UBS AG that English law issues arise in relation to the scope and application of the ISDA Master Agreement. But those are issues with which the Italian court will inevitably be dealing in any event in relation to the claim against UBS Ltd (and quite probably the other banks);
iii) it is relevant to consider when the respective courts might make a decision (see Cooper Tire & Rubber Co Europe Ltd v Shell Chemicals UK Ltd [2010] EWCA Civ 864 at [54]). In this case there is little prospect of a decision by the Italian court before the end of 2013 at the earliest. But in circumstances where UBS Ltd will be tied to the Italian timetable whatever that may be, I regard this as a factor of little weight.” [51-52, 64].