ING Bank N.V. & Anor v Banco Santander S.A.

A jurisdiction clause binds a non-party only where the applicable national law shows that the non-party succeeded to the original contracting party’s rights and obligations, or where the non-party otherwise accepted the clause. The relevant national law is the law governing the substantive contract. A foreign-law assumption of liabilities cannot be converted into succession under English law where the contractual requirements for novation or transfer are absent.

The insolvency exclusion in the Brussels Regulation applies where the claim derives directly from insolvency proceedings and is closely connected with them. The court must examine the substance and legal basis of the claim, not merely its contractual form or the identity of the parties.

ING claimed against Santander for interest allegedly payable under loan and swap agreements originally made with Marme, a Spanish company in liquidation. Santander was successor to Sorlinda, which had acquired Marme’s assets under a Spanish liquidation plan and had undertaken obligations concerning Marme’s liabilities.

ING issued proceedings in England relying on exclusive English jurisdiction clauses in the agreements. Santander applied for declarations that the English court lacked jurisdiction, contending that Santander was not bound by the clauses and that the claim fell within the insolvency exclusion in Article 1(2)(b) of the Regulation (EU) No. 1215/2012. Santander alternatively sought a case-management stay pending Spanish insolvency proceedings.

1. Jurisdiction clause. The application succeeded. Under Article 25, consent to jurisdiction is an autonomous question of EU law, but whether a non-party succeeded to the rights and obligations of an original contracting party is determined by the national law governing the substantive contract. The Marme Agreements were governed by English law.
2. There had been no novation or other relevant succession under English law. The agreements prohibited transfer without the required written consent, and ING did not allege that such consent had been given. The effect of the alleged Spanish-law assumption was therefore irrelevant to the question whether Santander was bound by the English jurisdiction clauses.
3. The bill-of-lading authorities did not establish a general principle applicable to this case. Their rationale depended on the negotiability of bills of lading and the statutory or contractual succession arising on transfer. The court would in any event have been reluctant to extend that principle to an insolvency acquisition of assets and liabilities.
4. Insolvency exclusion. The claim also fell within the insolvency side of the Brussels Regulation/Insolvency Regulation divide. The pleaded question was whether Sorlinda became liable to ING as a result of the liquidation plan, the Sorlinda bid and the Spanish insolvency court’s orders. That question depended on Spanish insolvency law and the conduct and effect of Marme’s liquidation.
5. The contractual character of the interest claim did not alter its substance. The claim sought to determine whether liabilities arising in the insolvency had passed to Santander and whether interest was recoverable in light of Spanish insolvency law. It was directly derived from, and closely connected with, the insolvency proceedings. The authorities relied on by ING, including F-Tex SIA v Lietuvos-Anglijos UAB “Jadecloud-Vilma” and Tünkers France v Expert France, were materially distinguishable because the rights in those cases had become detached from the insolvency process.
6. Stay. A case-management stay would also have been refused if the court had otherwise had jurisdiction. Such a stay requires rare and compelling, or exceptionally strong, circumstances. The exclusive jurisdiction clauses made the threshold still higher. The ordinary international case-management considerations relied on by Santander were insufficient.