Dexia Crediop S.p.A. v Provincia di Brescia
[2023] EWHC 959 (Comm)
Deutsche Bank AG London & Anor v Provincia Di Brescia
20 November 2024
[2024] EWHC 2967 (Ch)
High Court
Two banks and an Italian town argued about complicated financial deals. The town said the deals were illegal under Italian law; the banks said they were legal and the town had already agreed to them. An English court sided with the banks, saying the deals were okay and the town was stuck with its agreement.
Key Facts
- •Deutsche Bank AG London and Dexia SA (the Banks) sought declaratory relief concerning two interest rate swap transactions and settlement agreements with Provincia di Brescia (Brescia).
- •Brescia did not participate in the trial.
- •The transactions were governed by English law, while the settlement agreements were governed by Italian law.
- •Brescia had previously challenged the English court's jurisdiction but unsuccessfully.
- •Brescia subsequently initiated new proceedings in Italy, challenging the transactions and settlement agreements.
- •The Banks argued that the transactions were hedging, not speculative, and complied with relevant Italian law.
- •The Banks also argued that the settlement agreements were valid and barred Brescia's Italian claims.
Legal Principles
Court's discretion to proceed in a party's absence.
CPR 39.3
Claimant's burden of proof in an undefended hearing.
CPR 32.2(2)(b) and 32.5(1)(b)
Characterisation of capacity issues in private international law; Haugesund principle.
Haugesund Kommune v Depfa ACS Bank [2010] EWCA Civ 579
Application of mandatory rules of foreign law; Rome Convention Article 3(3).
Rome Convention
Limits on the capacity of Italian local authorities to enter into derivatives; ‘speculative’ vs. ‘hedging’ transactions.
Various prior English cases (Venice, Busto, Pesaro, Catanzaro), Cattolica Decision
Article 42 of TUEL; division of responsibilities within Italian local authorities.
Article 42 of TUEL
Ostensible authority and ratification under English law.
Various
Article 1972 of the Italian Civil Code; settlement agreements relating to void contracts.
Article 1972 of the Italian Civil Code
Article 1965 of the Italian Civil Code; requirement of consideration for settlement agreements.
Article 1965 of the Italian Civil Code
Ratification of settlement agreements under Italian law.
Various
Jurisdiction of English courts to grant declaratory relief concerning Italian-law governed settlement agreements.
[2022] EWHC 2859 (Comm) and [2023] EWHC 959 (Comm)
Outcomes
The court granted declaratory relief in favor of the Banks.
The court found that the transactions were hedging transactions and complied with relevant Italian law, and that the settlement agreements were valid and barred Brescia's further claims.
The court dismissed Brescia’s jurisdictional challenge.
The court found that the English jurisdiction clauses in the Master Agreements were sufficiently broad to encompass disputes relating to the settlement agreements, despite them being governed by Italian law.