01/12/2009 - Commercial Court dismisses application to stay jurisdiction in credit crunch dispute

The Commercial Court has refused to stay English proceedings involving a US$750 million dispute between Deutsche Bank AG and Sebastian Holdings Inc arising out of prime brokerage services provided by Deutsche Bank to facilitate foreign exchange and other derivatives trading by SHI.  SHI issued proceedings first in time in New York and the Bank followed with its Commercial Court action.  The case is interesting because there are multiple contracts in place between these parties, which throw up multiple and arguably competing jurisdiction clauses.  Walker J dismissed SHI's jurisdiction challenge in the English action in a judgment dated 14 August 2009.

SHI then made an application to the Commercial Court to stay the English proceedings in favour of New York. Burton J refused such application, holding that he was not satisfied that New York as opposed to London was clearly the more appropriate forum and that, since there were several English jurisdiction clauses, SHI had not established that there were "strong reasons" to depart from the parties' agreement that  the Engl ish court had jurisdiction.   The Judge heard argument on whether there was any such discretion to stay at all in a case governed by Article 23 of the Judgments Regulation and in the light of the ECJ's ruling in Owusu v Jackson 2005, but declined to express any view since it was unnecessary as he would not have exercised any such discretion.