Deutsche Bank AG & Ors v Asia Pacific Broadband Wireless Communications Inc & Anor

Under Article 23 of the Judgments Regulation 44/2001, validity of a jurisdiction agreement is an autonomous question of European law requiring the party relying on it to show, to the good arguable case standard, that consensus was clearly and precisely established. The court may consider the nature of the claims for which the clause is invoked. Where those claims depend on the agreement being unauthorised and void, outward indicia such as signatures, corporate seals and contractual representations may not establish real consensus. A broad commercial construction applies when determining the scope of a valid jurisdiction clause. Claims in misrepresentation and restitution arising from the underlying agreement may fall within a clause covering disputes in connection with it.

The claimants sought permission to amend existing contractual proceedings concerning a lending transaction by adding alternative claims in misrepresentation and restitution. The proposed claims depended on the defendants establishing that the credit agreement was void because it had not been authorised, or was not in the defendants’ interests.

The credit agreement contained an exclusive English jurisdiction clause. The defendants disputed jurisdiction over the proposed claims. The issues were whether the clause remained valid under Article 23 of the Judgments Regulation 44/2001 if the agreement was void, and whether the proposed claims fell within the clause’s scope.

1. The application was dismissed. The claimants had not shown a good arguable case, in the sense of having much the better of the argument, that the jurisdiction clause was the subject of real consensus under Article 23 in relation to the proposed alternative claims.
2. The validity of the jurisdiction clause was governed by autonomous European law. English law became relevant only after validity under Article 23 had been established and the court considered the clause’s scope. The formal requirements were strict, and consensus had to be demonstrated clearly and precisely.
3. The court was entitled to consider the claims or disputes for which the clause was invoked. Both proposed claims were predicated on the credit agreement being unauthorised and void. The alleged lack of authority therefore attacked the jurisdiction clause as well as the principal agreement. Signatures, corporate seals, board minutes and contractual representations were insufficient, without more, to establish consensus where the signatory’s authority was denied.
4. The principle of separability in Fiona Trust v Privalov did not alter the result. Its statutory foundation concerned arbitration agreements under section 7 of the Arbitration Act 1996, and its broader observations did not displace the strict European-law requirements applicable to Article 23 jurisdiction clauses. The reasoning in Mackender v Feldia supported the conclusion that absence of authority to conclude the agreement could also invalidate the jurisdiction clause.
5. Had validity been established, the construction issue would have been resolved in the claimants’ favour. Applying the broad and purposive approach in Fiona Trust v Privalov, both the misrepresentation and restitution claims were disputes in connection with the credit agreement. The claims were nevertheless not permitted because jurisdiction over them had not been established.