The Milan Court or the High Court? Jurisdiction clause and lis pendens

Categories: Contract Law
Typology: Case Law
Tags: bank

On 9 October 2015, the High Court of Justice of England and Wales (Commercial Court) delivered a judgment on jurisdiction clauses and lis pendens (Barclays bank plc v Ente Nazionale di previdenza ed assistenza dei medici e degli odontoiatri, [2015] EWHC 2857 (Comm).

The facts were the following. The claimant, Barclays Bank PLC, is an English bank. The defendant, Ente Nazionale di Previdenza ed Assistenza dei Medici e Degli Odontoiatri (“ENPAM”) is an Italian pension fund. A dispute has arisen between them as to a transaction entered into by way of a Conditional Asset Exchange Letter from ENPAM to Barclays dated 21 September 2007 by which ENPAM exchanged fund assets for securities which were in the form of credit-linked notes called the “Ferras CDO securities”. ENPAM’s claim is that it incurred a major loss in the transaction, and that it is entitled in law to look to Barclays to make that loss good. ENPAM began proceedings against Barclays and others in the Civil Court of Milan on 23 June 2014 (the Milan proceedings). Barclays says that this was in breach of provisions in the contractual documentation giving exclusive jurisdiction to the English courts. It issued proceedings before the High Court seeking a declaration to that effect and other relief on 15 September 2014. The judge was told that the proceedings were not served for some time. On 20 April 2015, ENPAM applied pursuant to Article 27 or Article 28 of Council Regulation (EC) No. 44/2001 (the Brussels I Regulation) for an order that the English court should not exercise its jurisdiction in these proceedings on the basis that Milan court was first seised. On 18 May 2015, Barclays issued a summary judgment application on the basis that there is no defence to its claim that the Milan proceedings fall within contractual provisions giving exclusive jurisdiction to the English courts.

The judge (Justice Blair) decided that Article 27 does not apply to Barclays’ claim in the English proceedings, since these proceedings do not have “le même objet et la même cause” as those in Milan (at 91). He added at 144 that there will not be a stay under Article 27 (the claim in relation to the Letter Agreement indemnity not being pursued), or under Article 28. Barclays is entitled to summary judgment except in relation to its claim for an indemnity under the PCA. What is interesting, among others, is that the judge states explicitly that Brussels I bis (and its new provisions on jurisdictions clauses — on which see S. Francq, “Les clauses d’élection de for dans le nouveau règlement Bruxelles I bis”, in “Le nouveau règlement Bruxelles I bis », Bruylant, June 2014, p. 107) is not applicable (para 36). Nonetheless, he seems to rely at some point on it, e.g. at 86: “I consider that the reasoning in The Alexandros T is applicable to the present case. I do not accept ENPAM’s submission that this result would infringe any overarching principle of EU law. Once it is recognised that a “an agreement conferring jurisdiction which forms part of a contract shall be treated as an agreement independent of the other terms of the contract” (see Article 25.5 of the Recast Judgments Regulation) that point goes”.

(Altalex, 25 January 2016. Article by Emmanuel Guinchard)

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