2019年6月4日
This case concerns a jurisdictional battle in which Lord Justice Hamblen took the opportunity to re-iterate some key principles concerning choice of law and jurisdiction, as well as business parties' freedom to contract.
The outcome was not surprising, cementing the English courts' well-established approach to uphold contracts negotiated at arms' length between business people.
The Court of Appeal noted the implausibility of sensible business people agreeing inconsistent jurisdiction clauses.
On 29 October 2008, Trattamento Rifiuti Metropolitani (TRM) entered into a facility agreement with a syndicate led by BNP Paribas S.A. (BNPP) as arranger and agent (through its Milan branch) (the Facility Agreement).
The Facility Agreement describes BNPP as 'Hedging Bank' for the purposes of interest rate hedging arrangements, but BNPP was not party to the Facility Agreement in that capacity.
The Facility Agreement was governed by Italian law and "any dispute relating to the interpretation, conclusion, performance or termination of this contract or otherwise relating to it shall be within the exclusive competence of the Court of Turin".
In order to comply with its interest rate hedging obligations to the lenders under the Facility Agreement, TRM entered into a swap on 23 March 2010, the documentation consisting of a 1992 ISDA Master Agreement, Schedule and Confirmation (the Swap).
The ISDA Master Agreement was governed by English law, with the parties submitting to the jurisdiction of the English courts.
In the course of later correspondence and meetings during 2016, TRM made allegations which led BNPP to issue a claim for negative declaratory relief in respect of the Swap.
TRM applied to the English courts to dismiss BNPP's claim for want of jurisdiction. In particular, it point to a provision in the Swap which stated that "in case of conflict between the provisions of this Agreement and the [FA] and the [ICA], the provisions of the [FA] and the [ICA] as appropriate shall prevail".
TRM was unsuccessful, the High Court concluding that BNPP's claim relating to the Swap fell within the English jurisdiction clause in the Swap, rather than the Turin jurisdiction clause contained in the Facility Agreement.
TRM appealed to the Court of Appeal.
Hamblen LJ considered previous authorities and re-affirmed the following principles:
Applying these principles to the facts at hand, the judge concluded that:
English judges have confirmed their hands-off approach when it comes to businesses entering into clearly worded contracts. This case affords another opportunity to reaffirm that principle, and gives further clarity on the issue of competing jurisdiction clauses.
Parties should ensure they are completely aware of their contractual arrangements and how these dovetail, particularly with regards to oft-forgotten boilerplate clauses.
Our international private wealth team responds to some key questions that our clients from across a number of sectors and jurisdictions have been thinking about over the past couple of weeks.
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