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Court of Appeal rules on exclusive jurisdiction under Judgments Regulation

28/04/10

JPMorgan Chase Bank, N.A. v Berliner Verkehrsbetriebe (BVG) Anstalt des Öffentlichen Rechts, Court of Appeal judgment 28 April 2010 [2010] EWCA Civ 390

The Court of Appeal has upheld the decision of Teare J in JP Morgan Chase v BVG [2010] 2 WLR 690 that a claim made by JP Morgan in relation to a credit default swap agreement should be heard in England under the jurisdiction clause in the agreement. The amount at risk under the agreement is around $220 million. BVG contends that the agreement was void because it was beyond the scope of BVG's powers to enter into it and thus ultra vires.

BVG's argument on jurisdiction was that proceedings raising the issue of ultra vires are allocated exclusively to the German courts under Articles 22(2) and 25 of the Brussels Judgments and Jurisdiction Regulation, even though other issues, such as alleged misselling by JP Morgan, may also be raised in the proceedings.

The Court of Appeal has held that the "sound administration of justice" requires the Court to make an "overall judgment" of the issues in a case to determine whether the proceedings are "principally concerned" with the matters falling within Article 22. The Court of Appeal was not prepared to interfere with the Judge's finding in that regard.

Shortly before the Court of Appeal's judgment was ready for handing down, the German Court referred related issues to the European Court of Justice in related proceedings between the same parties. The Court of Appeal rejected a submission that it should stay the English proceedings pending that reference or make a further reference itself.

The Court of Appeal refused BVG leave to appeal to the Supreme Court, but acknowledged in the judgment that "The Supreme Court may disagree, in which case it will doubtless consider making a reference, but that would be a matter for it to consider."

The judgment is here.

Tim Lord QC, Simon Salzedo and Sarah Abram appeared for BVG.