DEUTSCHE BANK AG V ASIA PACIFIC BROADBAND WIRELESS COMMUNICATIONS INC

[2008] EWHC 918 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Flaux, 30 April 2008

Conflict of laws – Exclusive jurisdiction – Claims brought for breach of credit facility containing exclusive jurisdiction clause – Claimant seeking to argue alternative claims for restitution and misrepresentation if credit agreement void – Whether exclusive jurisdiction clause valid if credit agreement void – Construction of exclusive jurisdiction clause – Brussels Regulation 4/2001, article 23

DB advanced money to APBW under a credit facility of some US$210 million to purchase equipment. The loan was guaranteed by the second defendant, APBW’s parent company. The credit agreement was governed by English law and provided for the exclusive jurisdiction of the English courts “to settle any dispute in connection with any Finance Document”. Following defaults by APBW, DB commenced proceedings in England; the claim form stated that the court had jurisdiction over both APBW and the second defendant under Article 23 of the Brussels Regulation, Council Regulation 44/2001, by reason of the exclusive jurisdiction clause and of the fact that because DB was domiciled in the EC then Article 23 was applicable. Jurisdiction was contested by the defendants on the ground that the credit agreement was void because it had been entered into without their authority. Two issues arose: did the exclusive jurisdiction clause survive the assertion that the credit agreement was void; and if the clause was valid, whether – assuming the agreement itself was void – the clause covered claims for restitution and misrepresentation. Flaux J held that DB had not clearly and precisely demonstrated the consensus necessary to show that there was a binding exclusive jurisdiction clause in respect of the alternative claims, because those claims were predicated on the basis that the credit agreement was void, and accordingly that the court did not possess jurisdiction. However, had there been jurisdiction, the claims would have fallen within the words “in connection with”.