Complexity & market turmoil could fuel an increase in jurisdiction battles, say Nick Marsh
& Amanda Howe
The Court of Appeal judgment in UBS AG and UBS Securities LLC v HSH Nordbank AG [2009] All ER (D) 190 (Jun) concerned a dispute between two banks over alleged mis-selling and mismanagement of collateralised debt obligations (CDOs).
The transaction was complex and there were several agreements documenting the overall deal which were governed by different laws and contained different terms as to jurisdiction.
The German commercial bank HSH Nordbank AG (HSH) entered into a credit default swap in March 2002 with the Swiss investment bank UBS AG and its US affiliate UBS Securities LLC (UBS).
HSH wished to invest in certain real estate related credit and asset backed securities which were viewed as outperforming corporate securities in the market at that time. As a result it invested in a multiple tranche synthetic CDO.
There were numerous agreements detailing various aspects of the overall deal. Some of the agreements were governed by English law and contained exclusive English jurisdiction clauses.
Others were governed by New York
