Exclusive Jurisdiction Agreement in Favor of English Courts

Facts

The complainants, a German foundation and a German investment company, had entered into derivative transactions with the respondent, the bankruptcy estate of C. AG in liquidation. These transactions were governed by a jurisdiction clause in the 1992 ISDA Master Agreement in favor of the English courts. As a result of the bankruptcy of C. AG, a dispute arose over the calculation of damages, whereupon the complainants filed collocation actions in Switzerland. The respondent, in turn, filed a claim against the complainants before the English High Court.

The High Court of the Canton of Zurich denied the international jurisdiction of the Swiss courts, as the parties had concluded an exclusive jurisdiction agreement in favor of the English courts. The complainants appealed this decision by way of a civil law appeal to the Federal Supreme Court.

Considerations

The Federal Supreme Court dismissed the appeal. It concluded that the jurisdiction clause in Section 13(b) of the 1992 ISDA Master Agreement establishes the exclusive jurisdiction of the English courts, insofar as the courts of a Contracting State of the Lugano Convention are concerned. The interpretation of the lower court, according to which the "Contracting States"…