DEPFA Bank Plc v Provincia Di Pisa

A national court should refer a question under Article 267 TFEU only where an answer is necessary to enable that court to give judgment. The prospect of future enforcement difficulties or inconsistent proceedings elsewhere does not itself satisfy that requirement. Where the proceedings before the referring court are undisputedly civil or commercial matters, and the court can determine them with complete confidence, a conflicting characterisation of related foreign proceedings does not create a necessary reference. Any question concerning the classification of the foreign proceedings, or the compatibility of foreign administrative-law provisions with the Judgments Regulation, should ordinarily be addressed by the foreign court seized of that issue.

The Banks brought claims in the English Commercial Court concerning the validity and enforcement of interest rate swaps entered into with Provincia di Pisa. Pisa had subsequently used powers of self-redress under Italian administrative law to annul the resolutions authorising the swaps and commenced related proceedings in Italy.

The English court had previously dismissed Pisa’s jurisdiction challenge: [2010] EWHC 1148. The Italian Consiglio di Stato held that the Italian administrative court could determine the effect of the self-redress decisions on the swaps. The Banks applied for a reference under Article 267 TFEU concerning whether proceedings involving Pisa’s exercise of those powers were civil or commercial matters within Article 1 of the Judgments Regulation.

1. Application refused. The court declined to refer the proposed question to the Court of Justice of the European Union.
2. Article 267 TFEU requires a reference only where a decision on the question is necessary to enable the referring court to give judgment. That requirement concerns the referring court’s own decision-making process. It does not arise merely because a reference might reduce future enforcement difficulties or the risk of inconsistent judgments.
3. The English proceedings were civil or commercial matters. That classification was common ground and was not challenged by either party. The English court could therefore proceed with complete confidence to determine the Banks’ claims.
4. The Consiglio di Stato’s view that the Italian proceedings were within its jurisdiction did not cast doubt on the classification of the different proceedings before the English court. The two courts were addressing different claims and legal questions.
5. The real uncertainty concerned whether Pisa’s Italian proceedings involved a civil or commercial matter governed by the Judgments Regulation, or an administrative matter governed by Italian law. That issue was before the Italian Supreme Court. If a reference became necessary, the Italian court was better placed to explain the relevant provisions of the Italian Code of Administrative Procedure and the effect of the Italian decisions.
6. Even if the Italian decision could be regarded as creating doubt about the English classification, the court would have exercised its discretion against making the reference. The Banks’ application was therefore dismissed.

The judgment records that Pisa’s earlier challenge to the jurisdiction of the English Commercial Court was dismissed by Hamblen J: [2010] EWHC 1148. The present decision concerned an application for a preliminary reference and was not an appeal from that decision.