Dexia SA v Comune Di Torino

A court may proceed in a defendant’s absence where the defendant knowingly and voluntarily declines to participate, having regard to caution, likely attendance after adjournment, representation, prejudice and the overriding objective. Permission for summary judgment without an acknowledgment of service or defence may be granted where service and jurisdiction are established and the defendant deliberately declines to participate. A broadly worded English-law jurisdiction clause may cover collateral, tortious and pre-contractual claims. The statutory concept of a Contracting State concerns convention status, not whether the convention applies to the particular dispute.

Dexia sought declarations concerning the validity, enforceability and jurisdictional effect of 11 interest rate swaps entered into with an Italian municipal authority under a 1992 ISDA Master Agreement governed by English law. Torino had commenced related proceedings in Turin alleging advisory, pre-contractual and tortious liability, invalidity, breach, termination and restitution.

Torino was served in the English proceedings but took no further part. Dexia sought permission to apply for summary judgment without an acknowledgment of service or defence, abridgment of time, permission for expert evidence on Italian law, and summary judgment that the English jurisdiction clause was exclusive and that the Italian proceedings breached it.

The court proceeded in Torino’s absence under Civil Procedure Rules 1998, r. 39.3. Torino knew of the proceedings, had previously instructed lawyers, deliberately and voluntarily failed to participate, and was unlikely to attend after an adjournment. Proceeding was consistent with efficient case management and the overriding objective.

1. Permission was granted under Civil Procedure Rules 1998, r. 24.4(1)(a), because service and jurisdiction were established, Torino had deliberately abstained, and Dexia had a legitimate interest in an enforceable merits judgment. Time was abridged under r. 24.4(5), with procedural protection allowing Torino to seek variation or set-aside.
2. The jurisdiction clause was governed by English law and required a broad and purposive construction. Its wording, read with the entire-agreement and no-advisory provisions, covered the alleged advisory, pre-contractual and tortious claims. The clause was materially equivalent to that considered in Deutsche Bank AG v Comune di Savona.
3. The reference to s. 1(3) of the Civil Jurisdiction and Judgments Act 1982 used the statutory definition in force at the time of litigation. The definition identified states bound by the specified convention; it did not require the convention to apply to the particular dispute. Italy was therefore a Contracting State and the English jurisdiction was exclusive vis-à-vis Italy.
4. Article 4(2) of Italian Law No. 218/1995 concerned material validity rather than corporate capacity. The proposed argument based on non-disposable rights had no realistic prospect of success.

Torino had no realistic prospect of defending the declarations, and there was no compelling reason for a trial. The declarations were made.