Ian Higgins reports on credit default swaps, vires, & exclusive jurisdiction agreements
The Court of Appeal has given a boost to the effectiveness of express jurisdiction agreements in written agreements. The ruling will have considerable importance for those who enter into agreements with overseas entities and seek to have their disputes heard in the London courts.
In Berliner Verkehrsbetriebe (BVG) Alstalt des Öffentlichen Rechts v JP Morgan Chase Bank NA [2010] EWCA Civ 390, [2010] All ER (D) 212 (Apr) the jurisdiction of the English courts was challenged, despite an express contractual submission to jurisdiction. One of the substantive defences raised was that the transaction was ultra vires the German defendant, and on that basis it was claimed that the German courts had exclusive jurisdiction to determine the question of vires. The Court of Appeal rejected that approach.
The facts
The claimants were entities of JP Morgan (JPM). They entered into a complex swap transaction with BVG, a German public authority which is responsible for the operation of the Berlin public transport system. The financial turmoil of September 2008 left the public
