Deutsche Bank AG London Branch v Petromena ASA

Factual and Procedural Background

This appeal concerns a jurisdictional dispute between Petromena ASA ("Petromena"), the first defendant, and Deutsche Bank AG ("DB"), the claimant. DB sought declarations of non-liability in England concerning claims Petromena had initiated against DB in Norway. Petromena challenged the English court's jurisdiction to hear DB's claim for a negative declaration. Following a refusal by Gloster LJ to declare lack of jurisdiction, Petromena appealed. Subsequently, Petromena filed a second acknowledgment of service in England, which DB contended constituted submission to the English court's jurisdiction under CPR Part 11(8), rendering Petromena's appeal moot.

Petromena initially filed a first acknowledgment of service contesting jurisdiction and applied for an order declaring the English court lacked jurisdiction. Gloster LJ refused this order and refused permission to appeal. Petromena then filed an appeal in the Norwegian Supreme Court on related jurisdictional issues. After the English court’s order was sealed and received by DB, Petromena filed a second acknowledgment of service in England. Petromena sought a stay of English proceedings pending Norwegian appeals, which DB opposed, asserting that the second acknowledgment amounted to submission to English jurisdiction.

The English court considered the interpretation of Article 24 of the Lugano Convention and CPR Part 11 concerning submission to jurisdiction by filing acknowledgments of service. The factual background involves Petromena, a Norwegian holding company with subsidiaries owning oil rigs, and DB, a German financial institution with a London branch. Petromena had issued bonds under a Loan Agreement containing a Norwegian exclusive jurisdiction clause. Petromena’s claims against DB in Norway alleged breaches of duties arising from DB's role as an adviser and bondholder, including breach of loyalty and misuse of insider information. DB sought declarations of non-liability in England.

The English court was first seised of the claim form in June 2012. The dispute concerned whether the English court had jurisdiction given the Norwegian jurisdiction clause and the nature of the claims, which Petromena characterized as non-contractual damages arising in tort/delict, while DB argued they related to contractual matters or occurred in England.

Legal Issues Presented

1. Whether the English court had jurisdiction over DB’s claim for a negative declaration against Petromena, given Petromena’s challenge and appeal.
2. Whether Petromena’s filing of a second acknowledgment of service constituted submission to the jurisdiction of the English court under CPR Part 11(8) and Article 24 of the Lugano Convention.
3. Whether Petromena’s claims against DB fell within the exclusive Norwegian jurisdiction clause in the Loan Agreement under Article 23 of the Lugano Convention.
4. Whether the claims were contractual in nature, engaging Article 5.1 of the Convention, or non-contractual tort/delict claims, engaging Article 5.3, thus affecting jurisdiction.
5. The proper interpretation and application of CPR Part 11 and Article 24 of the Lugano Convention concerning submission to jurisdiction and jurisdictional challenges.

Arguments of the Parties

Appellant's Arguments (Petromena)

• Petromena argued that the English court had no jurisdiction to hear DB’s claim for a negative declaration.
• Petromena contended that the Norwegian courts had exclusive jurisdiction under the jurisdiction clause in the Loan Agreement pursuant to Article 23 of the Lugano Convention.
• Petromena submitted that its claims should be characterized as contractual and that England was not the place of performance under Article 5.1 of the Convention.
• Petromena denied that filing the second acknowledgment of service amounted to submission to English jurisdiction, asserting that it was done subject to jurisdictional protest and consistent with its challenge.
• Petromena sought a stay of English proceedings pending Norwegian appeals.

Appellee's Arguments (Deutsche Bank)

• DB contended that the English court had jurisdiction, particularly as Petromena filed a second acknowledgment of service, which under CPR Part 11(8) amounted to submission to jurisdiction.
• DB submitted that the Norwegian jurisdiction clause was irrelevant because Petromena’s claims did not arise out of the Loan Agreement but out of an advisory relationship.
• DB argued that the claims were in tort/delict, not contractual, and that the place of the harmful event was England, conferring jurisdiction under Article 5.3 of the Convention.
• DB opposed any stay of the English proceedings.
• DB maintained that Petromena’s appeal was moot given its submission to jurisdiction by filing the second acknowledgment of service.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Elefanten Schuh GmbH v Pierre Jacqmain [1982] 3 CMLR 1	Interpretation of "appearance entered to contest jurisdiction" under Article 24 of the Lugano/Brussels Convention.	Clarified that contesting jurisdiction must be preliminary and not after substantive defence; relevant to interpretation of Article 24 exceptions.
Cartier Parfums-Lunettes v Ziegler France SA [2014] IL Pr 25	Timing of establishment of jurisdiction under Article 27 of the Lugano Convention.	Confirmed that jurisdiction is established absent contest prior to first substantive defence; relevant to jurisdiction challenge timing.
Kongress Agentur Hagen GmbH v Zeehaage BV [1990] ECR I-1845	Procedural rules must not impair effectiveness of the Convention.	Supported view that national procedural rules govern appearance, provided Convention effectiveness is preserved.
Sage v Double A Hydraulics and Chambers v Morgan Starkings (unreported, 1992)	Application of "disinterested bystander" test to waiver of jurisdictional challenge; effect of second acknowledgment of service.	Distinguished acts inconsistent with maintaining jurisdictional challenge; relevant to whether filing acknowledgment constitutes submission.
Hoddinott v Persimmon Homes [2008] 1 WLR 806	Interpretation of CPR Part 11; filing acknowledgment of service without jurisdictional challenge implies submission to jurisdiction.	Held that statutory submission to jurisdiction occurs under CPR Part 11(5) and (8); disinterested bystander test not applicable to statutory submission.
Harada Limited (trading as Chequepoint) v Turner [2003] EWCA Civ 1695	Whether participation in proceedings under jurisdictional protest amounts to submission to jurisdiction.	Rejected submission to jurisdiction by participation under protest absent filing acknowledgment of service under CPR Part 11.
Boss Group Ltd v Boss France S.A. [1997] 1 WLR 351	Jurisdiction exists if defendant alleges existence of contract for negative declaratory relief.	Supported jurisdiction under Article 5.1 even if contract existence disputed.
Fiona Trust v Privalov [2008] 1 Lloyds Rep 254	Jurisdiction clauses should be widely and generously construed.	Applied to interpret scope of exclusive jurisdiction clause in Loan Agreement.
Powell Duffryn Plc v M Petereit C-214/89; 1992 E.C.R. 1-1769	Scope of "disputes arising in connection with a particular legal relationship" under Article 17 (equivalent to Article 23 of Lugano).	Held that jurisdiction clause applies only to disputes arising from the particular legal relationship, excluding unrelated disputes.
Continental Bank v Aeakos [1994] 1 WLR 588	Claims arising from contractual relationship and breach of business morality fall within jurisdiction clause.	Distinguished from present case; confirmed claims must be inextricably linked to contract to engage jurisdiction clause.
Hedley Byrne v Heller [1964] AC 465	Foundation for claims in negligence and fiduciary duty.	Supported characterisation of Petromena’s claims as tortious rather than contractual.
Wood Floor Solutions Andreas Domberger v Silva Trade [2010] 1 WLR 1900	Determination of place of performance of contract for services under Article 5(1)(b).	Applied to conclude advisory services were performed in England, establishing jurisdiction.
Rehder v Air Baltic Cpn [2010] Bus. L.R. 549	Place of performance analysis for carriage contract.	Distinguished; advisory services performed where advice formulated, not where received.
Biguzzi v Rank Leisure plc [1999] 1 WLR 1926	Authorities under former RSC are persuasive but not binding under CPR.	Supported interpretation that CPR Part 11 represents a new procedural culture.

Court's Reasoning and Analysis

The court first addressed whether the filing of a second acknowledgment of service by Petromena constituted submission to the jurisdiction of the English court under CPR Part 11(8) and Article 24 of the Lugano Convention. It noted that under Article 24, jurisdiction arises when a defendant enters an appearance, except when the appearance is solely to contest jurisdiction. The court examined ECJ jurisprudence clarifying the scope of this exception, including Elefanten Schuh and Cartier Parfums-Lunettes, concluding that the national procedural rules govern what constitutes an appearance, provided they do not impair the Convention’s effectiveness.

Applying English procedural law, the court found that the filing of a second acknowledgment of service after an unsuccessful jurisdictional challenge is a statutory submission to jurisdiction under CPR Part 11(8). The disinterested bystander test, used in earlier common law cases to assess waiver, does not apply to this statutory submission. The court rejected Petromena’s argument that filing the second acknowledgment under protest did not amount to submission.

The court also considered the context of Petromena’s Norwegian appeals and concluded that pursuing those appeals did not preclude submission to English jurisdiction. The mandatory stay provisions under Articles 27 and 28 of the Lugano Convention operate independently and take precedence over Article 24.

Regarding the jurisdictional dispute on the merits, the court analyzed the scope of the Norwegian exclusive jurisdiction clause in the Loan Agreement under Article 23 of the Lugano Convention. It held that Petromena’s claims arose from an advisory relationship distinct from the loan relationship governed by the Agreement and thus did not fall within the exclusive jurisdiction clause. This interpretation was supported by ECJ authority in Powell Duffryn, emphasizing that jurisdiction clauses apply only to disputes arising out of the particular legal relationship.

The court further examined whether the claims were contractual or tortious for the purposes of Article 5 of the Convention. It accepted the judge’s finding that the claims were primarily tortious or fiduciary in nature, not contractual, but held that even if contractual, the place of performance was England, conferring jurisdiction under Article 5(1). This was supported by the factual finding that DB’s advisory activities were performed predominantly in London.

In sum, the court concluded that the English court had jurisdiction both by virtue of Petromena’s submission through the second acknowledgment of service and on the substantive jurisdictional issues under the Lugano Convention.

Finally, the court declined to entertain Petromena’s informal application to withdraw the second acknowledgment of service due to lack of formal application and supporting evidence, emphasizing that any such withdrawal should have been sought promptly.

Holding and Implications

The court UPHELD the order of Gloster LJ refusing to declare that the English court lacked jurisdiction.

The direct effect is that the English court has jurisdiction to hear DB’s claim for a negative declaration against Petromena. This jurisdiction arises both from Petromena’s submission by filing a second acknowledgment of service and from the substantive interpretation of the Lugano Convention provisions regarding jurisdiction clauses and the nature of the claims.

No new precedent was established beyond the application and clarification of existing principles concerning submission to jurisdiction under CPR Part 11 and the interpretation of the Lugano Convention in the context of concurrent proceedings in Norway and England.