Diageo DV Limited v NIO S.R.L. (in liquidation)

An exclusive English jurisdiction clause may arise from mandatory wording even where the agreement does not use the word “exclusive”. Its scope is determined by construing the transaction and agreements as a whole, with particular attention to the dispute’s centre of gravity.

Where a contract permits withholding an estimated liability from a future payment, written notice before payment falls due may be sufficient. Agreement or a contractual expert determination is not necessarily a precondition to withholding, although final liability and quantum may remain for later determination.

Foreign proceedings brought in breach of an exclusive English jurisdiction agreement will ordinarily be restrained unless strong reasons justify refusal. The injured party may recover reasonably incurred costs caused by the breach.

Diageo and Nio entered into a share purchase agreement concerning an Italian company. The agreement contained an English choice-of-law clause and a jurisdiction clause providing that disputes would be determined by the English courts. A separate deed, executed to satisfy Italian share-transfer formalities, contained an Italian jurisdiction clause.

After Diageo withheld part of a deferred payment to reflect a claimed indemnity liability, Nio commenced proceedings in Milan and sought a jurisdiction ruling from the Italian Supreme Court. Diageo applied for permission to seek summary judgment, declarations and a final anti-suit injunction. Nio did not acknowledge service or defend the proceedings. The central issues were the proper scope of the competing jurisdiction clauses, Diageo’s contractual entitlement to withhold the estimated liability, and the appropriate relief.

1. Permission and summary judgment. Permission to apply for summary judgment was granted under Civil Procedure Rules 1998, r 24.4(1). There was a good and proper reason to determine the claims summarily, including the likely recognition and enforcement consequences of a merits judgment under the Hague Service Convention and the fact that declaratory relief and a final anti-suit injunction required judicial consideration. Nio had no real prospect of successfully defending the relevant issues and there was no compelling reason for a trial.
2. Jurisdiction clause. Clause 24.2 of the SPA was an exclusive English jurisdiction agreement. The clause was mandatory, provided that disputes “will be determined” by the English courts, and was governed by English law. The competing clauses had to be construed broadly and commercially in the context of the transaction as a whole, following Fiona Trust & Holding Corp v Privalov [2007] UKHL 40. The deed’s Italian clause was confined to the formal share-transfer arrangements required by article 2470 of the Italian Civil Code. The Milan and Italian Supreme Court proceedings were, in substance, claims concerning the SPA and therefore breached clause 24.2.
3. Withholding mechanism. The settlement liability was a Relevant Claim. Diageo had used reasonable endeavours to ensure that Niococktails considered settling by purchasing products from Proximo and had consulted Nio before settlement. Diageo had notified Nio of the claim and estimate before the deferred payment fell due. Clause 6.2 entitled Diageo to withhold the estimated liability without prior agreement or invocation of the Counsel Determination Mechanism. That mechanism allowed either party to challenge the withheld amount, but was not a condition precedent to withholding.
4. Relief. A final anti-suit injunction was granted. Declarations were granted that the Italian proceedings fell within clause 24.2 and breached it, and that the specified questions concerning the deferred payment, indemnity and withholding were governed by the SPA. The court declined at this stage to declare that Nio was finally liable for the indemnity or that all Italian-law claims were governed by English law. Diageo was awarded an interim payment of £44,045 for Italian legal costs, with further damages to be assessed, and application costs of £33,645 plus the £10,000 court fee.

The judgment records earlier procedural orders concerning service and an interim anti-suit injunction, including [2025] EWHC 2109 (Comm). This was the final determination of Diageo’s application in the High Court.