The turmoil in recent years in economic markets has not surprisingly resulted in a number of court cases concerning complex financial transactions, often with cross-border elements. Those transactions are commonly documented in a number of related agreements, whether entered into contemporaneously or over a period of time. Not uncommonly, by accident or design, those agreements contain different jurisdiction clauses. Which court has jurisdiction in these circumstances? This is the question the Court of Appeal has had to consider in two recent cases.
In UBS Securities LLC v HSH Nordbank AG [2009] EWCA Civ 585 the Court of Appeal considered a complex CDO transaction which consisted of a series of separate but inter-related agreements which contained conflicting jurisdiction clauses. To read our e-bulletin on UBS v Nordbank please click here. In that case the Court of Appeal looked to the agreement which was "at the commercial centre of the transaction" to determine which jurisdiction clause should cover the dispute. In the more recent case of Sebastian Holdings Inc v Deutsche Bank AG [2010] EWCA Civ 998, the Court of Appeal has had an opportunity to consider another series of financial agreements relating to equities and foreign exchange trading. In this case the Court of Appeal distinguished the case from the fact pattern in UBS v Nordbank and found that where a claim arose under a particular agreement, the jurisdiction clause in that agreement would apply even if this resulted in a fragmentation of proceedings.
This decision gives helpful and very detailed guidance on the construction of jurisdiction clauses contained in a complex series of agreements and provides an example of when the jurisdiction clause contained in the agreement which is perceived to be at the centre of a transaction will not trump jurisdiction clauses contained in other connected agreements. Click here to read our briefing on this case.
Location