In the case of JP Morgan Chase Bank NA v Berliner Verfkehrsbetriebe (BVG)  EWCA Civ 390, the appellant (B) appealed against a decision dismissing its application for an order that the English court had no jurisdiction in respect of the claims of the respondents (J). J were part of a well known international banking group. B was a German public law institution which operated the Berlin public transport system and its seat was in Germany. B entered into a credit swap arrangement after discussions with J. B said that the decisions of its management and supervisory boards to enter into the transaction were ultra vires as a matter of German law and accordingly void. B contended that it had been given incorrect advice by J about the transaction and its effect. The swap transaction documentation contained English law and jurisdiction clauses. J began English proceedings for declarations and for the sums said to be due under the swap. B applied unsuccessfully to the English court for an order that it had no jurisdiction, on the ground that the proceedings brought by J had "as their object ... the validity of the decisions" of the organs of a legal person, B, whose seat was in Germany, so that under Regulation 44/2001 art.22(2) the German courts had exclusive jurisdiction and the English court had to decline jurisdiction under art.25.
J submitted that the judge correctly interpreted art.22(2) in holding that the court had to look at the proceedings overall; he had rightly assessed the issues involved in the case and had properly concluded that it was a multi-issue case where more than one issue would be of importance; he correctly found that the ultra vires issue was not the "principal matter" with which the English court would be concerned in the proceedings. B submitted that since the ultra vires issue might be dispositive of J's claim altogether, that was sufficient to bring the proceedings within the ambit of art.22(2); alternatively, if it was necessary to carry out an evaluation of the issues overall, the judge should have given decisive weight to the ultra vires issue.
Appeal was dismissed.
(1) The court was bound by authority to interpret the words "proceedings which have as their object" in art.22(2) as "proceedings which are principally concerned with". If proceedings raised an issue within art.22(2), that did not mean that those proceedings were "principally concerned with" that issue. If proceedings raised a number of issues and one of them was within the terms of art.22(2) and the resolution of that issue might be dispositive of the proceedings as a whole, that did not mean that the proceedings were "principally concerned with" an issue within art.22(2). The correct approach required the court to undertake an exercise in "overall classification" and make an "overall judgment" as to whether the proceedings were "principally concerned" with one of the matters set out in art.22(2). If an issue within art.22(2) was not merely a "preliminary" or "incidental" matter, that did not mean that, looking at the proceedings overall, they were proceedings which were "principally concerned" with art.22(2) matters. It followed that the judge reached the right conclusion on the interpretation of art.22(2) in posing the question whether the English proceedings were principally concerned with the ultra vires issue raised by B by way of defence to J's claim.
(2) The ultra vires issue was important because it might be dispositive of the proceedings, but the proceedings were not "principally concerned with" the ultra vires issue. They were principally concerned with the validity of the swap and whether J could enforce its rights under it. As a part of that overall issue, the court would have to consider various defences put forward by B, of which an important one, which could be decisive, was the ultra vires issue. The judge was right that the proceedings were not so likely to be connected with the German law of ultra vires that they should only be tried in Germany.
(3) In the circumstances the English proceedings should not be stayed to await the judgment of the European Court of Justice on questions referred to it by the German court in proceedings brought by B against J. Nor should the English court refer any questions to the ECJ.