Deutsche Bank AG London Branch v Petromena ASA

For jurisdiction under the Lugano Convention, the characterisation of a claim is objective. A claim falls within Article 5.1 only where the relevant obligation arose from an agreement or consensual relationship, even if no contract valid under national law was concluded. A unilateral assumption of responsibility is insufficient.

Articles 5.1 and 5.3 are mutually exclusive. Where alleged advice and breaches of duty originated principally from the defendant’s operations in England, England may be the place where the harmful event occurred under Article 5.3, even if the advice was received and loss was suffered elsewhere. A jurisdiction clause concerning disputes arising out of or in connection with a loan agreement does not extend to independent duties allegedly assumed by a bondholder acting as adviser.

Deutsche Bank sought declarations of non-liability in England in respect of claims brought by Petromena in Norway. Petromena alleged that Deutsche Bank, acting through its London branch, had assumed advisory and fiduciary-like duties during discussions about refinancing Petromena’s distressed bond financing, and had breached those duties by selling bonds and demanding acceleration.

Petromena applied for a declaration that the English court lacked jurisdiction. It relied principally on Article 5.1 of the Lugano Convention, arguing that the claims related to contractual services performed or received in Norway. Alternatively, it relied on Article 5.3 and contended that the harmful event occurred in Norway. It also relied on the exclusive Norwegian jurisdiction clause in the Loan Agreement.

1. Application dismissed. The English court had jurisdiction to hear Deutsche Bank’s claim for negative declaratory relief.
2. The burden was on Deutsche Bank to establish a good arguable case that the jurisdictional facts existed. In a negative declaration claim, it could rely on the jurisdictional facts asserted by Petromena in the Norwegian proceedings.
3. The claims were objectively matters relating to tort, delict or quasi-delict, rather than matters relating to a contract under Article 5.1. The autonomous Convention concept required the relevant obligation to arise by virtue of an agreement or consensual relationship. The mere fact that Deutsche Bank was alleged to have freely assumed advisory responsibilities did not satisfy that requirement. The pleaded case was that Deutsche Bank had unilaterally assumed the role of adviser, with no pleaded agreement or accepted offer.
4. In any event, Article 5.1 would have conferred jurisdiction on the English court. Applying Wood Floor Solutions Andreas Domberger GmbH v Silva Trade SA [2010] ECR I-2121, the relevant place was where the service provider principally carried out its activities. The evidence showed that the relevant work was performed overwhelmingly in London. The fact that advice might have been received in Norway was immaterial.
5. Articles 5.1 and 5.3 were mutually exclusive. The claims fell within Article 5.3. Under the two-limb approach in Handelskwekerij GJ Bier NV v SA Mines de Potasse d’Alsace [1976] ECR 1735, the relevant question was whether England was the place of the event giving rise to the damage. The communications, operations and alleged breaches originated in London. England therefore had the particularly close connection required for special jurisdiction.
6. The Norwegian jurisdiction clause in the Loan Agreement did not govern the dispute. Petromena’s claims were founded on the alleged assumption of an advisory role, not on any breach of the Loan Agreement. The words arising out of or in connection with that agreement had limits and did not cover the independent duties alleged.
7. The court declined to rule on whether the Norwegian courts had jurisdiction, that being a matter for those courts.