July 12, 2023

English High Court gives effect to ISDA Master Agreement jurisdiction clause in latest Italian swaps case


In a recent decision in Dexia Crediop SpA v Provincia di Brescia [2023]1, the English High Court dismissed the application of the Italian Province of Brescia (the "Defendant") for an order that the Court does not have jurisdiction or, alternatively, should decline jurisdiction, over certain claims brought by the Italian bank Dexia Crediop SpA (the "Claimant") regarding the validity and enforceability of interest rate swaps entered into between the parties shortly before the financial crisis of 2007-2008.

This decision follows a series of similar cases in recent years arising out of interest rate swaps entered into by Italian public bodies who have sought to challenge the jurisdiction of the English Courts to hear disputes arising out of these transactions, notwithstanding the parties' choice of court in the contractual documentation.

This decision provides a further illustration of the English Courts giving effect to the standard jurisdiction provision in the ISDA Master Agreement. It also serves as an important reminder of the need for careful drafting and consideration of jurisdiction clauses in contracts governing complex transactions from the outset, to ensure that the documentation gives effect to the parties' intentions and helps to minimise the risk of disputes on jurisdiction issues arising further down the line.

Factual Background

The Claimant's underlying claim concerned two interest rate swap transactions entered into by the Claimant and Defendant in June and December 2006 (the "Swaps").  The Swaps were governed by a 2002 ISDA Master Agreement, which contained the following standard English governing law and jurisdiction provision (the "ISDA Jurisdiction Clause"):

"13. Governing law and jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in accordance with [English law]

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement ('Proceedings') each party irrevocably:-- (1) submits to the jurisdiction of the English Courts if this agreement is expressed to be governed by English law … and (2) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum, and further waives the right to object with respect to such Proceedings that such court does not have any jurisdiction over such party."

In 2017, following a dispute as to the validity of the Swaps, the Claimant and Defendant entered into an Italian law governed settlement agreement concerning the Swaps (the "Settlement Agreement"). The Settlement Agreement brought an end to existing English and Italian proceedings between the parties and, importantly, confirmed the validity of the Swaps. 

The Settlement Agreement did not itself contain a jurisdiction clause.  The Settlement Agreement did, however, contain the following provision:

"9.1. This agreement and all contractual and non-contractual obligations arising therefrom shall be governed by and interpreted in accordance with Italian law.

9.2. However, it is understood that the swaps and the ISDA agreement relating to them are subject to English law and the exclusive jurisdiction of the English courts as contractually provided for."

Later, the Defendant sought to challenge the validity of the Settlement Agreement and Swaps by issuing a claim in the Italian Courts (the "New Italian Claim"). In that claim, the Defendant sought an order that the Swaps were unenforceable, and/or claimed damages for payments due thereunder.

In the present claim, issued by the Claimant in 2021, the Claimant sought various declarations in respect of the Swaps, including as to the validity, terms and effect of the Settlement Agreement, and as to whether the commencement of the New Italian Claim was a breach of the terms of the Settlement Agreement on the basis that it sought to challenge the validity of the Swaps (the "Declarations").

The Application

In November 2021, the Defendant brought an application to challenge jurisdiction.  It sought an order that the English Court did not have jurisdiction or should decline jurisdiction over the Claimant's claims for the Declarations. The Defendant argued that those claims fell outside the ISDA Jurisdiction Clause and should be litigated in Italy, on the basis that they relate to an Italian law governed settlement agreement, executed by Italian parties in Italy. 

The Claimant argued that the English Courts do have and should exercise jurisdiction over the matter on the basis that the Declarations all relate to the underlying Swaps and the ISDA Master Agreement, and therefore fell within the scope of the ISDA Jurisdiction Clause.


The Court decided that the Declarations did, in fact, relate to the Swaps, and thus fell within the scope of the ISDA Jurisdiction Clause.

In reaching its decision, the Court found that the issues and underlying facts in this case were very similar to those considered and decided last year by Robin Knowles J in Deutsche Bank v Provincia di Brescia [2022] EWHC 2859 (Comm) – another Italian swaps case involving the same Italian public authority as counterparty.  Those proceedings had been brought by Deutsche Bank in relation to two swaps entered into at the same time as the Swaps in this case. Deutsche Bank sought many of the same declarations as those sought in these proceedings, and the Defendant there contended that the same standard ISDA Jurisdiction Clause did not apply to the declarations sought in relation to a settlement agreement that was in substantially the same terms as that of the Settlement Agreement in the present case.

In that judgment, the Court had found in favour of Deutsche Bank.  The Court held that that the ISDA Jurisdiction Clause is broadly framed.  The Court confirmed that, by its plain words, the clause is broad enough to capture any disputes concerning the Swaps, including future disputes, and noted that the Settlement Agreement also expressly reiterated the scope and application of the ISDA Jurisdiction Clause to future disputes arising in relation to the Swaps.

The Court concluded that: "There is in the present case no competing jurisdiction clause. The master agreement and the settlement agreement are between the same parties. They address well enough the same subject matter. They are interdependent. The only way that I consider clause 11.2 [in that case – which was in the same terms as clause 9 of the Settlement Agreement in the present case] to be properly understood is as making plain that the parties were seeking to preserve, not exclude or undo, the effect of the English jurisdiction clause. The choice of Italian law to govern the settlement agreement does not point to Italian jurisdiction on the facts of the case."

In the present case, in applying Robin Knowles J's reasoning, Mr Justice Butcher also found that the Claimant had the better of the arguments that the Declarations, whilst referring to the Settlement Agreement, in essence related to the underlying Swaps themselves and therefore fell within the scope of the ISDA Jurisdiction Clause.  The Court also rejected the Defendant's contention that England is not the convenient forum for the dispute as the Defendant had waived its rights to bring such arguments under Clause 13(b) of the ISDA Jurisdiction Clause, which provided that the Defendant irrevocably waived arguments to the effect that England is not the forum conveniens.


Whilst the Defendant's jurisdiction challenge failed in the present case, the position may not always be as clear. Indeed, we note that Robin Knowles J in Deutsche Bank v Brescia found that there were "high quality arguments on both sides", and the Courts will no doubt look closely at the facts of each case and the specific wording in contractual documentation when considering whether they have or should exercise jurisdiction over a dispute of this nature.

The decision does, however, provide another example of the English Commercial Court upholding and applying the standard form English jurisdiction clause in the ISDA Master Agreement. The decision is also consistent with the general approach under English law of interpreting forum provisions broadly, pursuant to principles set out in the well-known Fiona Trust decision of the House of Lords in 2007. More broadly, it reaffirms the Court's expertise in dealing with cross-border commercial disputes, in particular cases involving international parties and contractual provisions not all governed by English law.

The Court's judgment serves as a useful reminder to parties entering into complex financial transactions and settlement agreements concerning the validity and enforceability of the same, to make sure that choices of forum have been carefully considered in advance and the contractual provisions clearly drafted to minimise the risk of jurisdictional uncertainty or a jurisdictional challenge should a dispute arise.  This is particularly so where disputes have already arisen historically between the parties as to the enforceability and validity of these financial instruments.

Should you have any questions regarding the issues raised in these judgments, please feel free to contact any of the authors.

1 EWHC 959 (Comm)

Stay Up To Date With Our Insights

See how we use a multidisciplinary, integrated approach to meet our clients' needs.