JPMorgan Chase Bank, N.A. v Berliner Verkehrsbetriebe (BVG) Anstalt des Öffentlichen Rechts
The Supreme Court (Lord Phillips, Lord Rodger and Lord Collins) has made a preliminary reference to the Court of Justice of the European Union relating to the interpretation of the exclusive jurisdiction provisions in Article 22 of the Judgments Regulation.
BVG, which is the German public law institution charged with managing the public transport system of Berlin, concluded a complex credit default swap agreement with JPMorgan in 2007. JPMorgan has sued BVG in the Commercial Court for declarations that the transaction is enforceable and for the funds said to be owing under the credit default swap agreement (now alleged to amount to approximately $194 million). BVG contends that the credit default swap agreement is void and unenforceable, because it was beyond the scope of BVG's powers to enter into such an agreement.
BVG applied for a declaration that the claim falls within the exclusive jurisdiction of the German courts under Articles 22(2) and 25 of the Judgments Regulation (Regulation 44/2001), even though issues other than ultra vires, such as alleged misselling by JP Morgan, may also be raised in the proceedings. The Commercial Court ( QB 276) and the Court of Appeal ( EWCA Civ 390,  1 CLC 628) dismissed BVG's application.
Upon an application for permission to appeal by BVG, the Supreme Court granted BVG's request for a preliminary reference. The questions referred include how a national court should interpret the requirement that proceedings must be "principally concerned with" an issue of exclusive jurisdiction, in a case which may raise a number of issues including one or more falling outside the scope of Art 22 of the Judgments Regulation. The Supreme Court has also asked whether the national court should take into account defences as well as claims when determining whether exclusive jurisdiction is engaged under Art 22.
Parallel proceedings between BVG and JPMorgan are also ongoing in the German courts. The Berlin Court of Appeal (Kammergericht) has made a preliminary reference in March 2010 (Case C-144/10) seeking guidance on the interpretation of Arts 22(2) and 25.
Tim Lord QC, Simon Salzedo and Sarah Abram appeared for BVG, instructed by Addleshaw Goddard LLP.