Dexia Crediop SPA v Provincia Di Brescia

Where related contracts contain different jurisdiction clauses, the court must construe them carefully and commercially, giving effect to the parties’ agreements even if this fragments dispute resolution. A broad clause covering proceedings relating to an agreement is not displaced merely because another contract is commercially important or overlapping issues of law may arise under it. The court identifies the particular contractual relationship and claim to which the dispute relates. Under Article 29 of the Recast Regulation, common issues are insufficient: proceedings must involve the same cause and object, meaning the same facts and legal rules and the same end in view. Claims for declaratory relief concerning swaps were therefore distinct from damages claims concerning alleged breaches of a mandate.

Dexia sought declarations concerning two interest rate swaps entered into with Provincia Di Brescia. The declarations concerned Brescia’s capacity, compliance with applicable law, the validity and enforceability of its obligations, and the non-speculative purpose of the transactions.

The swaps were governed by an ISDA Master Agreement subject to English law and an exclusive English jurisdiction clause. A separate Mandate, concerning debt-management services, was governed by Italian law and contained an exclusive Rome jurisdiction clause. Brescia challenged English jurisdiction over declarations concerning compliance with Italian law and sought a stay under Articles 29 and 31(2) of the Recast Regulation. The central issues were which jurisdiction clause applied and whether the English and Rome proceedings involved the same cause of action.

1. Application dismissed. Brescia was not precluded from challenging jurisdiction over declarations (2) and (3) merely because it accepted jurisdiction over other declarations. Issues 1 and 2 were interdependent and were determined together.
2. The court applied the Canada Trust test: the question was which party had the better argument on the construction of the competing jurisdiction agreements. Related contracts must be construed carefully and commercially, giving effect to clear agreements even where this causes fragmentation. The court may consider the contract from which the dispute most naturally arises or its centre of gravity.
3. Declarations (2) and (3) concerned representations and contractual terms in the ISDA Master Agreement. They were therefore proceedings relating to that agreement within its exclusive English jurisdiction clause. The declarations did not concern the quality of Dexia’s performance under the Mandate. The fact that Italian law might need to be considered did not transfer jurisdiction to Rome.
4. There was no basis to insert the word “only” into the ISDA jurisdiction clause or to imply a term preserving exclusive Rome jurisdiction over overlapping Italian-law issues. That would rewrite the parties’ agreement. The English court could potentially grant the declarations through contractual estoppel without determining Italian law.
5. The English and Rome proceedings did not involve the same cause of action under Article 29(1) of the Recast Regulation. They relied on different contractual provisions and legal bases. They sought different relief: declaratory relief concerning the swaps in England and damages for alleged breaches of the Mandate in Rome. Their outcomes were not legally irreconcilable.
6. Article 29 therefore did not require a stay. Article 31(2) was moot, but, if applicable, the English court was the designated court under the ISDA jurisdiction clause and had priority. The decision was subject to Brescia’s separate right to apply for a stay under Article 30.

First-instance decision. The judgment records that the Court of Appeal gave judgment in Barclays Bank Plc v Ente Nazionale Di Previdenza Ed Assistenza Dei Medici E Degli Odontoiatri [2016] EWCA Civ 1261 after the hearing, but that decision did not constitute an appeal in the present proceedings.