Dexia Crédit Local S.A. v Patrimonio del Trentino S.p.A.

A contractual jurisdiction clause must be construed as a whole, giving effect to its natural and ordinary meaning and commercial purpose. An express submission to the exclusive jurisdiction of the English courts is not converted into a hybrid clause merely because the contract permits proceedings in another country to the extent permitted by applicable law. In the Brussels I Regulation context, that permission was construed as allowing provisional or protective proceedings in Italy after English proceedings had begun, rather than parallel substantive litigation. For service out under CPR 6.33(2B), the claimant need show a good arguable case that a contract containing a jurisdiction term exists and covers the claim. A lack of capacity to enter a later derivative transaction did not impeach the earlier ISDA Master Agreement containing the jurisdiction clause. Even if the clause had been non-exclusive, foreseeable Italian factors and parallel proceedings would not have justified a stay.

Dexia sought declaratory relief in England concerning an interest rate swap entered into with Patrimonio del Trentino under an English-law ISDA Master Agreement. Trentino had already commenced proceedings in Italy seeking to invalidate the transaction and recover alleged losses. It challenged service out of the jurisdiction under CPR 6.33(2B), arguing that the Master Agreement and its jurisdiction clause were invalid because of alleged limits on its capacity to enter derivatives. Alternatively, it sought a stay on forum non conveniens and lis alibi pendens grounds.

The jurisdiction clause stated that the parties submitted to the exclusive jurisdiction of the English courts, but also agreed that English proceedings would not preclude proceedings before the Italian courts to the extent permitted by applicable law. The central issues were whether service was valid, whether the clause was exclusive or hybrid, and whether a stay was justified.

1. Jurisdiction challenge dismissed. Dexia had very much more than a good arguable case that the Master Agreement was valid, binding and contained a term giving the English courts jurisdiction over the claims. CPR 6.33(2B) does not require the claimant to establish the validity of the later transaction where the relied-on contract is the earlier Master Agreement.
2. The alleged Italian-law incapacity concerned the later derivative transaction, not the Master Agreement. A master agreement entered into in anticipation of future transactions remained a separate and valid contract. The single-agreement wording did not require the Master Agreement and every later transaction to stand or fall together.
3. The jurisdiction clause was exclusive in favour of England. The word “exclusive” had to be given its ordinary meaning. Read against the Brussels I Regulation regime, the clause’s reference to Italian proceedings was a limited carve-out for provisional or protective measures, available after English proceedings had been brought and subject to applicable law. It did not permit parallel substantive proceedings in Italy.
4. Stay application dismissed. The finding of exclusivity was determinative. Even on the alternative assumption that the clause was non-exclusive, the Italian witnesses, documents, law and connection with Italy were foreseeable when the agreement was made. Parallel proceedings and uncertainty about recognition or enforcement after Brexit did not constitute overwhelming, very strong or exceptional grounds for a stay, particularly in view of the forum non conveniens waiver.
5. The applications to admit the extensive Italian-law expert evidence were dismissed. The evidence was unnecessary and disproportionate to the issues decided.