Jurisdiction clauses: High Court finds English courts have exclusive jurisdiction under bespoke ISDA clause

A recent High Court decision shows that the English courts will not readily refuse jurisdiction or stay proceedings where parties have agreed an English jurisdiction clause, whether the choice of jurisdiction is exclusive or non-exclusive: Dexia Crédit Local SA v Patrimonio del Trentino SpA [2024] EWHC 2717 (KB).

It further suggests that the English courts are likely to accept jurisdiction over a claim in respect of a swap transaction where the relevant ISDA Master Agreement contains an English jurisdiction clause, even if it is alleged that the transaction itself was void for lack of capacity. A clause in the Master Agreement to the effect that it and all confirmations entered into under it formed a "single agreement" did not mean that the Master Agreement and the individual swap transactions would necessarily stand or fall together.

The decision also acts as a reminder that a claim can be served out of the jurisdiction without the need for the court's permission whenever there is an applicable English jurisdiction clause, whether that is exclusive, non-exclusive or asymmetric, and that in general a jurisdiction clause will be interpreted broadly.

Finally, the decision highlights the need to consider carefully whether foreign law evidence is needed on an application to challenge jurisdiction. The court's permission should be sought in good time where foreign law evidence is required and the parties should list a hearing with a realistic time limit if the application to adduce expert evidence is contested. In the present case, the court expressed some displeasure at the parties having adduced detailed expert evidence without permission where that evidence was not necessary or proportionate.

For more information, see this post on our Banking Litigation Notes blog.