BNP PARIBAS SA V TRATTAMENTO RIFIUTI METROPOLITANI SPA

[2019] EWCA Civ 768, Lord Justice Hamblen, Lord Justice Flaux and Lady Justice Asplin, 7 May 2019

Conflict of laws - Jurisdiction - Parties entering into two contracts with different jurisdiction clauses - Exclusive jurisdiction - ISDA Master Agreement - Whether dispute at hand - Brussels Regulation Recast, (EU) No 1215/2012, Article 25

The defendant, TRM, had received a commission to build a waste treatment plant from the Province of Turin and required financing, to include interest rate hedging. Following a tender process, it entered into a financing agreement with the claimant bank, BNPP. The Financing Agreement provided for the exclusive jurisdiction of the Court of Turin (the Italian jurisdiction clause, IJC). An ISDA Master Agreement in multi-currency-cross border form was subsequently entered into, which provided for the exclusive jurisdiction of the English courts (the English jurisdiction clause, the EJC). The Master Agreement was said to be subject to the Financing Agreement and any conflicts were to be resolved accordingly. A Swap was agreed under the Master Agreement. BNPP commenced proceedings in London seeking declarations in respect of the Swap, whereupon TRM commenced proceedings in Turin as to whether the hedging strategy was properly performed. TRM objected to the present proceedings on the basis that there was no serious issue to be tried and that the English court did not have jurisdiction to determine disputes under the Swap. At first instance Robin Knowles J held that there was a serious issue to be tried in relation to the Swap under the Master Agreement and that, on jurisdiction, BNPP had much the better of the argument. The two contracts were separate in a context where the parties had more than one relationship. Although the Master Agreement was said to be subsidiary to the Financing Agreement in the event of conflict, there was no conflict between the jurisdiction clauses. The use of ISDA documentation was significant - commercial parties were unlikely to intend that provisions should have one meaning in one context and another meaning in another context. The fact that the Financing Agreement was concluded first did not mean that it was necessary to start with the jurisdiction clauses in the Financing Agreement.