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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> UBS AG & UBS Securities Llc v HSH Nordbank AG [2009] EWCA Civ 585 (18 June 2009) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2009/585.html Cite as: [2009] EWCA Civ 585, [2009] 2 Lloyd's Rep 272, [2009] 1 CLC 934 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
MR JUSTICE WALKER
Strand, London, WC2A 2LL |
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B e f o r e :
LORD COLLINS OF MAPESBURY
LORD JUSTICE TOULSON
and
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UBS AG and UBS SECURITIES LLC |
Appellants/Claimants |
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- and - |
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HSH NORDBANK AG |
Respondents/Defendants |
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WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Mr Jonathan Sumption QC, Ms S Prevezer QC and Mr Andrew Henshaw (instructed by Quinn Emanuel) for the Respondents
Hearing dates : April 1 and 2, 2009
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Crown Copyright ©
Lord Collins of Mapesbury:
I Introduction
II Collateralised Debt Obligations
III The facts
The Kiel MTN Notes
"Each of the Bank and Finance hereby irrevocably agrees for the exclusive benefit of the Dealers that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that accordingly any suit, action or proceedings arising out of or in connection with this Agreement (together referred to as 'Proceedings') may be brought in such courts.
Each of the Bank and Finance hereby irrevocably waives any objection which it may have to the laying of the venue of any Proceedings in the courts of England and any claim that any such Proceedings have been brought in an inconvenient forum and hereby further irrevocably agrees that a judgment in any Proceedings brought in the English courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. Nothing contained herein shall limit any right to take Proceedings against the Bank and/or Finance in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not."
"The Issuer agrees, for the exclusive benefit of the Agents, the Noteholders, the Receiptholders and the Couponholders that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with the Agency Agreement, the Notes, the Receipts and/or the Coupons and that accordingly any suit, action or proceedings arising out of or in connection with the Agency Agreement, the Notes, the Receipts and the Coupons (together referred to as 'Proceedings') may be brought in such courts.
The Issuer hereby irrevocably waives any objection which it may have now or hereafter to the laying of the venue of any such Proceedings in the courts of England and any claim that any Proceedings have been brought in an inconvenient forum and hereby further irrevocably agrees that a judgment in any Proceedings brought in the English courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. Nothing contained in this Condition shall limit any right to take Proceedings against the Issuer in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not."
The Transaction
Letter Agreement: governed by New York law/no jurisdiction agreement
Offering Circular and Indenture: New York law and non-exclusive New York jurisdiction
"Governing Law
The Notes, the Indenture (including the grant by the Issuer of the security interest in the Collateral and the enforcement by the Trustee of such security interest (except to the extent that the validity or perfection of the Issuer's or the Trustee's interest in the Collateral, or remedies under the in respect thereof, may be governed by the laws of a jurisdiction other than the State of New York, in which case the laws of such jurisdiction shall apply to such extent)), the Kiel Custody Agreement, the Repurchase Agreements, the Non-Kiel Custody Agreements and the Administration Agreement will be governed by, and shall be construed in accordance with, the laws of the State of New York without regard to the principles of conflicts of laws. The Issuer will submit to the non-exclusive jurisdiction of the New York courts for all purposes in connection with the Notes, the Indenture, the Kiel Custody Agreement, the Repurchase Agreements, the Non-Kiel Custody Agreements and the Administration Agreement and will appoint UBS Warburg LLC to accept service of process on its behalf. The Repo Counterparty will submit to the non-exclusive jurisdiction of the New York courts for all purposes in connection with the Repurchase Agreements and the Non-Kiel Custody Agreements and will appoint UBS Warburg LLC to accept service of process on its behalf.
The Kiel MTN Notes will be governed by, and shall be construed in accordance with, the laws of England. The MTN Issuer will submit to the jurisdiction of the English courts in connection with the Kiel MTN Notes and has appointed its United Kingdom representative office at 50 Gresham Street, London EC2V 7AY to accept service of process on its behalf.
The Credit Swap, and all matters arising from or connected with it, will be governed by, and shall be construed in accordance with, the laws of England. The Issuer and the Swap Counterparty will submit to the jurisdiction of the English courts for all purposes in connection with the Credit Swap, and the Issuer will appoint Clifford Chance Secretaries Limited to accept service of process on its behalf."
Credit swap: English law and non-exclusive English jurisdiction
Reference Pool Side Agreement: New York law and non-exclusive New York jurisdiction
"(a) This agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws.
(b) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST [UBS] OR [LB KIEL] ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK AND ANY APPELLATE COURT FROM ANY SUCH COURT, AND, BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF [UBS] AND [LB KIEL] ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT
…"
Pricing Supplement/Dealer's Confirmation: English law and exclusive English jurisdiction
"(b) Subject as provided [below], the parties agree that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with the …[Kiel MTN Notes]… and the parties accordingly submit to the exclusive jurisdiction of the English courts… nothing contained in this condition shall limit any right of the … Noteholders… to take proceedings against [LB Kiel] in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not."
"Subject as provided in this sub-clause (2), the parties hereby irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and the parties accordingly submit to the exclusive jurisdiction of the English courts for any suit, action or proceedings arising out of or in connection with this Agreement (together referred to as 'Proceedings').
Each of [LB Kiel and LB Finance] hereby irrevocably waives any objection which it may have to the laying of the venue of any Proceedings in the courts of England and any claim that any such Proceedings have been brought in an inconvenient forum and hereby further irrevocably agrees that a judgment in any Proceedings brought in the English courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. Nothing contained herein shall limit any right of the Dealers to take Proceedings against the [LB Kiel and/or LB Finance] in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not.
..."
IV The dispute and the New York proceedings
A The original New York complaint
B The Motion to Dismiss
C The Amended New York Complaint
V Jurisdiction under the Brussels I Regulation, Article 23
"1. If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. …"
A The judge's decision
B The appeal
UBS's arguments
HSH's arguments
VI Conclusions
"HSH decided to participate in the Transaction by issuing to UBS on a principal to principal basis US$500 million of puttable medium term notes ('the MTNs') under HSH's existing MTN programme, and pursuant to a series of Agreements ('the MTN Agreements') in return for HSH providing credit protection to UBS against certain credit risks in relation to the Reference Pool. HSH's objective was to enhance its return … in exchange for assuming a degree of risk on the Reference Pool."
"HSH also expressly confirmed that it understood, acknowledged and agreed that UBS was only acting as initial purchaser for the Transaction and was not acting as adviser to HSH (clause 2 of the Letter Agreement), and that the Letter Agreement constituted the entire agreement and understanding of the parties with respect to the Transaction and superseded all oral or written communications in relation thereto (clause 6(b) of the Letter Agreement)."
"Accordingly, at the time at which HSH entered into the Transaction it did so of its own volition based on its own judgment (following advice from its independent advisors and not on the basis of any advice or representation made by UBS), at its own risk and solely on the terms of the written agreements comprising the Transaction."
i) that the Principal Agreements and the terms contained therein, as well as all other written agreements and/or written notifications and/or documents entered into and/or executed by the parties pursuant to or related to or in connection with the Transaction (the "Related Documents") were and had been at all material times valid, binding and enforceable;
ii) that HSH was not entitled to rescind any of the Principal Agreements or any of the Related Documents (which is no longer relevant since the claim for rescission has been dropped);
iii) that HSH was not induced to enter into the Transaction by the alleged misrepresentations and/or non-disclosures;
iv) that the obligations of the parties in relation to the Transaction were (and had at all material times been) governed by, and are limited to, the terms of the Principal Agreements and/or the Related Documents and, save as expressly set out in those Agreements and/or the Related Documents, UBS had assumed no obligation, duty or other responsibility, whether of a fiduciary or other nature, to HSH;
v) alternatively, that any such duty, obligation or responsibility undertaken by UBS had been lawfully performed and discharged;
vi) that UBS had not been unjustly enriched as alleged and/or had not converted any of HSH's funds and/or HSH's investment as alleged;
vii) that UBS had materially complied with and/or discharged each and all of its relevant obligations arising out of or in connection with the Principal Agreements and the Related Documents and accordingly UBS had not caused and/or was not liable to HSH in respect of any loss or damage arising out of or in connection with those Agreements and the Related Documents (whether in contract, tort, statute or otherwise) which may have been suffered or incurred by HSH in connection with the Transaction.
"then, where the jurisdiction clauses are in conflict, I do not see why the GMRA clause should not prevail: either on the basis that, in a case of conflict on standard forms plainly drafted by CS Europe, MLC should be entitled to exercise the broader rights; or on the basis that the clause in the contract which is closer to the claim and which is more specifically invoked in the claim should prevail over the clause which is only more distantly or collaterally involved."
VII Forum non conveniens
Lord Justice Toulson:
Lord Justice Ward: