Key Points

  • English court takes a strict approach to its obligations under the Bank Recovery and Resolution Directive.
  • Decision of the Portuguese Central Bank was not explicitly based on the provisions of theBRRD and therefore not given effect
  • Administrative/public law background does not prevent substance of dispute being ‘civil or commercial’

The Facts

In August 2014 the Bank of Portugal (“BP”) transferred the assets and certain liabilities of a distressed Portuguese bank (“BES”) to Novo Banco (“NB”) under the powers contained in the EU Bank Recovery and Resolution Directive (“BRRD”). Included in the transfer were sums due by BES under a c. $835m English law governed facility from a Luxco (“Oak”). BP then issued a decision in December 2014 stating that liabilities to Oak were excluded from the August transfer.

No repayment was made under the Oak facility. Oak assigned its claim to, amongst others, Goldman Sachs, who commenced proceedings against NB in the English courts.

NB challenged the jurisdiction of the English courts on the basis that: (i) the Oak liabilities were excluded from the transfer and (ii) the Brussels Regulation on jurisdiction did not apply as the claimants were challenging an administrative matter rather than a civil or commercial matter.

The Decision

The High Court rejected NB’s application holding that: (i) the better argument was that the Oak liabilities were not an excluded liability and in any event the December ruling did not have effect under English law as it did not involve the exercise of any power in the BRRD (in particular it was not a transfer or re-transfer of assets or liabilities) and (ii) the Brussels Regulation did apply as, despite the background to the matter being one of administrative and public law, the claim was essentially a debt claim and therefore ‘civil or commercial’.


The decision reflects a fairly narrow view being taken by the English courts of its obligation to recognise and give effect to actions of “resolution authorities” of other Member States under the BRRD.

Goldman Sachs International v Novo Banco SA