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Journal of International Banking & Financial Law/2010 Volume 25/Issue 9, October/Articles/Competing
Jurisdiction Clauses - (2010) 9 JIBFL 551
Journal of International Banking and Financial Law
(2010) 9 JIBFL 551
1 October 2010
Jonathan Lawrence
K&L Gates LLP jonathan.lawrence@ klgates.com
www.klgates.com
© Reed Elsevier (UK) Ltd 2010
Deutsche Bank AG v Sebastian Holdings Inc. [2010] EWCA CIV 998 (Court of Appeal, Civil Division) (Mummery, Thomas & Pitchford LJJ) (20 August 2010)
FACTS
Sebastian Holdings Inc. ('Sebastian') is a company formed for the purpose of holding securities and dealing in the financial markets. In May 2006, November 2006 and January 2008, Sebastian entered into a series of agreements with Deutsche Bank AG ('Bank') for trading in the financial markets and these agreements became the subject of disputes. The principal issue in the appeal was the construction of jurisdiction clauses in that series of agreements; most provided for the jurisdiction of the English courts; one provided for the jurisdiction of the New York courts. The trading ended in October 2008 when Sebastian made losses of $750m in trading through the Bank. Sebastian contended that the English courts did not have jurisdiction on the true construction of the series of agreements looked at together or that if it had, the claim should be stayed in favour of New York.
CONCLUSION
Sebastian's appeal was dismissed. The Bank could rely on the English jurisdiction clauses. In construing a jurisdiction clause, a broad and purposive construction must be followed. Where there are multiple related agreements, the task of the court in determining whether a dispute falls within the jurisdiction clauses of one or more related agreements, depends upon the intention of the parties as revealed by the agreements.
Where different agreements are entered into for different aspects of an overall relationship, and those different agreements contain different terms as to jurisdiction, the court should not ignore the parties' careful selection of jurisdiction in each agreement.
The court focussed on finding the commercially rational construction and giving effect to clear agreements, even if this may result in a degree of fragmentation in the resolution of disputes between parties to the series of agreements. A judgment in England had the advantage of enforcement under the Judgements Regulation and the Lugano Convention. It is difficult to see how a court could say rational businessmen did not intend to give that further advantage to the Bank. The jurisdiction clauses did not conflict, even if the defences may

Page 2 overlap. The construction advanced by Sebastian required the court to rewrite the agreements and impose a regime that would not have been commercially rational. To construe the agreements in that way, far from giving effect to the intention of the parties, would frustrate them.