DEUTSCHE BANK AG LONDON v COMUNE DI BUSTO ARSIZIO

Declaratory relief is discretionary. The court must assess utility, justice between the parties and whether declarations are the most effective means of resolving a real and present dispute. Relief should reflect the dispute actually determined and should avoid hypothetical, precautionary or overbroad declarations that may create confusion or trespass on matters outside the court’s jurisdiction.

Where a party succeeds on the central issues in complex commercial litigation, failure on subsidiary or contingent issues will not ordinarily justify departing from the general rule that costs follow the event. Permission to appeal should be refused where the proposed grounds have no real prospect of success and an appeal could not affect the outcome.

Following an earlier judgment upholding two interest rate swaps entered into between Deutsche Bank and the Comune di Busto Arsizio, the court determined consequential matters. Deutsche Bank sought 14 declarations, a provision permitting it to seek further relief in the same proceedings if future sums remained unpaid, its costs, and permission to appeal.

The issues concerned the proper scope and utility of declarations, the effect of the parties’ contractual representations, the relationship with potential claims under an Italian-law mandate, the court’s jurisdiction after final determination, costs, and the statutory tests for permission to appeal.

1. Declarations. The court applied the discretionary principles summarised in BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA, including utility, justice to both parties, the need for a real and present dispute, and caution against hypothetical or confusing relief. The reasoning in Rolls-Royce v Unite the Union was treated as the leading authority on the scope of declaratory relief.
2. Declarations 1, 3, 4, 6, 10, 12 and 13, and a declaration confined to the existence of specified contractual representations, were appropriate. Declaration 2 was refused because there had been no alleged breach or dispute and its utility was unclear. Declaration 5 was refused because it concerned a matter not in issue. Declarations 7–9 and 11 were refused in their proposed form because they risked being misunderstood as determining matters under the Italian-law mandate; narrower declarations might have been useful. Declaration 14 was refused because it was precautionary, unsupported by evidence, insufficiently reflective of the dispute, and potentially extended to matters outside the court’s jurisdiction.
3. The court did not base the declarations on contractual estoppel. It proceeded on the conventional basis that the declarations reflected issues actually disputed and determined, with regard to their utility.
4. Stay or further relief. The court refused to keep the proceedings open for future applications. Once all issues had been determined, the court was functus officio; no live element of the claim remained and no jurisdictional basis for the proposed order had been identified.
5. Costs. Deutsche Bank was the overall winner on the central capacity, validity and enforceability issues. Applying Fox v Foundation Piling Ltd and related authorities, the court gave substantial weight to the “follow the event” starting point. Busto was ordered to pay Deutsche Bank’s costs, with an interim payment of £1.4 million.
6. Permission to appeal. Permission was refused. The conclusions on Italian law were factual conclusions informed by expert evidence, attracting appellate caution under Dexia Crediop SpA v Comune di Prato and Wheeldon v Millenium Insurance. In any event, the proposed appeal could not affect the outcome, and no other compelling reason was established.

The judgment was a consequential decision following the court’s earlier judgment of 12 October 2021, which held that the two interest rate swaps were valid, binding and enforceable. No separate appellate decision is stated in the judgment.