Competing Jurisdiction Clauses - Appeal

In (1) UBS AG (2) UBS Securities LLC v HSH Nordbank

AG [2009] EWCA Civ 585 the Court of Appeal, in agreeing with

the decision of the High Court that the proper jurisdiction for

proceedings to be brought was New York, found that it was necessary

to construe a jurisdiction clause in the light of the transaction

as a whole.

UBS appealed against a decision that the English Courts did not

have jurisdiction to try proceedings UBS had brought against the

respondent bank, HSH Nordbank AG ("HSH"). The dispute

related to a complex transaction involving various contracts that

contained different jurisdiction clauses pursuant to which the

predecessor of HSH, Landesbank Schleswig-Holstein, purchased

derivatives from UBS. Among the central contracts governing the

transaction was an agreement between the parties about the

management of assets forming a particular reference pool, which was

subject to New York law and contained a nonexclusive New York

jurisdiction clause.

HSH brought proceedings in New York alleging that UBS had made

fraudulent and negligent misrepresentations in relation to the

reference pool, which had induced HSH to enter into the

transaction. However, in anticipation of the New York proceedings,

earlier on the same day UBS had started proceedings against HSH in

the High Court, seeking a declaration that it was not liable to

HSH, on the basis of English jurisdiction clauses contained in

various documents governing a credit swap entered into by the

parties in relation to the purchase of assets in the reference

pool. HSH applied for an order in the English proceedings that the

English Courts did not have jurisdiction to try UBS' claim, or

(in the alternative) asked the Court to decline to exercise

jurisdiction on the grounds that the New York Courts were the

natural and proper forum for the resolution of the dispute. In

short, HSH argued that none of the contracts out of which the New

York dispute arose conferred jurisdiction on the English Courts.

UBS, on the other hand, argued that certain exclusive jurisdiction

clauses, and in particular a jurisdiction clause in a dealer's

confirmation, conferred jurisdiction on the English Courts.

The High Court had found for HSH, the Judge deciding that the

English jurisdiction clauses contained in the relevant credit swap

documentation were insufficiently wide to cover the dispute set out

in the New York claim. The Court held that those matters which were

the subject of the U.S. proceedings (i.e...