The Court of Appeal in Deutsche Bank AG v Comune di Savona [2018] EWCA 1740 has clarified the position as regards competing jurisdiction clauses, particularly when considering swaps and derivatives and The International Swaps and Derivatives Association (“ISDA”) model agreements.

Where there are two contracts with competing jurisdiction clauses it is necessary to define the “particular legal relationship” that the dispute concerns by reference to Article 25 of Regulation (EU) No 1215/2012 (“Brussels Recast”). In this case, there as a distinction between an initial contract that governed a broader relationship between the parties and which contained an Italian jurisdiction clause, and the ISDA Master Agreement that specifically governed the interest swap relationship between the parties and contained an English jurisdiction clause. The Court found that all disputes relating to swap transactions must be governed by the Master Agreement jurisdiction clause.


In 2007 Deutsche Bank’s London branch (“DB”) and Comune di Savona, an Italian municipality (“Savona”) entered into an agreement whereby DB agreed to provide advisory services to Savona (the “Advisory Agreement”). That contract selected Italian law as the governing law and gave exclusive jurisdiction to the Milan court. Two months after entering that agreement, the parties entered into a 1992 multicurrency ISDA Master Agreement (the “ISDA Agreement”) that selected English governing law and gave exclusive jurisdiction to the English courts. 

Savona subsequently made two interest rate swap transactions which were followed by confirmations executed by DB and Savona, which stated that the swaps were subject to the ISDA Agreement. Savona’s entry into these swap transactions were later criticised by the Italian Court of Auditors. This led to questions over the validity of the transactions. DB issued a claim in the Commercial Court in London seeking declarations concerning the validity and enforceability of the swap transactions.

First Instance Decision

HHJ Waksman QC took the view that the Advisory Agreement imposed advisory obligations on DB which related to the swaps. He stated:

In the light of all of that, and considering, for the moment, the Italian Claim, I have no hesitation in concluding that it is governed by the Italian and not the English Clause. Or to put it strictly, DB can show no good arguable case that a claim like the Italian Claim falls within the English Clause. I agree that this conclusion entails a somewhat narrower interpretation of “relating to” than might prevail in other circumstances but, as I have tried to emphasise, that is simply a feature of the relevant context here. This construction of the English Clause is by no means absurd or uncommercial and it achieves the desired effect of avoiding any overlap between the two clauses and, broadly speaking, enabling them to deal with different things.

Appeal Decision

HHJ Waksman QC’s decision was overturned by Lord Justice Gross and Lord Justice Floyd in the Court of Appeal. The Appeal Judges found that the First Instance Court had taken the wrong approach in trying to predict whether the declarations if made, would act as defences in another jurisdiction. This was in accordance with the accepted approach taken in BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA [2018] EWHC 1670 (Comm).

Lord Justice Gross summarised the position at paragraph 36 and 38 of the judgment:

In particular, I prefer the demarcation outlined by Longmore LJ at [21] – [22] above to that favoured by the judge. As it seems to me, the Convention governed the background or generic relationship between the parties but, as clause 2(b) thereof made plain, not the individual swap contracts subsequently proposed and entered into by the parties. These were to be governed by separate agreements with separate terms, here the ISDA Master Agreement, a view reinforced by the entire agreement clause contained in the Master Agreement…

For my part, it would be startling if the bank’s claims falling squarely under the swap contracts could not be brought in the forum selected by the parties through the jurisdiction clause under those agreements, namely that contained in the ISDA Master Agreement. A fortiori, if and to the extent that such an outcome might be said to turn on subsequent proceedings which Savona chose to initiate: cf., Sebastian Holdings (No. 2), at [63]. A conclusion to this effect would be highly damaging to market certainty and I would not agree to it unless driven to do so.


The first instance judgment created a degree of market uncertainty, particularly in relation to ISDA Agreements. HHJ Waksmann recognised that his analysis could “produce some fragmentation” but he nevertheless rejected arguments of contractual estoppel to stop the claims being heard in Italy. The Court of Appeal has restored some welcome clarity which brings the case into line with other recent decisions on jurisdiction clauses. Express agreement to jurisdiction in ISDA standard forms will readily be upheld.