Nicola Sharp explains why the Commercial Court stepped into injunct proceedings brought in Italy.
The UK courts have consistently shown that they are willing to step in to preserve the prior agreement between the parties when it comes to the jurisdiction for their disputes.
In a recent case, the Commercial Court once again granted an anti-suit injunction to restrain a party from taking further steps in proceedings which were commenced elsewhere – this time in Italy.
The applicant party claimed that the proceedings were brought in breach of an agreement conferring exclusive jurisdiction on the English courts. The court agreed.
You can read the full decision here: Diageo DV Limited v Nio SRL (in liquidation) [2025] EWHC 2109 (Comm).
The jurisdiction clauses in the contracts
In this case, the parties had entered into a Share Purchase Agreement (SPA), which included a governing law and jurisdiction clause referring all disputes in connection with the agreement to the courts of England. Disputes were to be construed in accordance with English law.
On completion of the transaction, the parties agreed that they would execute a Deed of Transfer in agreed form “only for the purposes of Section 2470 of the Italian Civil Code.” The Deed of Transfer contained an exclusive Italian jurisdiction clause.
Which contract governed the dispute?
A dispute arose between the parties relating to the Deferred Payment under the SPA. The Claimant withheld certain sums, and the Defendant disputed the Claimant’s right to do so.
The Defendant started the Italian proceedings to recover the shortfall.
The Claimant submitted that the commencement and pursuit of the Italian proceedings constituted a breach of the SPA by the Defendant, and said that there were no strong reasons to refuse to grant an anti-suit injunction against the Defendant.
Ultimately this was a question of construction.
The central issue was whether the dispute fell within the scope of clause 24 of the SPA or Article 8 of the Deed of Transfer. The judge found that it was the former for the following reasons:
- The SPA contained a comprehensive account of the rights and obligations assumed by both parties. By contrast, the Deed of Transfer was much narrower in scope and was required “only” for the purposes of section 2470 of the Italian Civil Code.
- The language of clause 24 of the SPA was broad in scope and conferred on the English court exclusive jurisdiction in relation to any claim or dispute arising out of or in connection with the SPA. By contrast, the language of Article 8 of the Deed of Transfer was narrower in scope and gave the Court of Milan exclusive jurisdiction in relation to any dispute concerning the Deed of Transfer.
- It was clear from the Writ of Summons that the essential complaint underlying all of the Defendant’s claims in the Italian proceedings was that the Claimant failed to pay the Deferred Payment under the SPA in full. The alleged breaches of the terms of the SPA clearly fell within the scope of clause 24 of the SPA.
The impact of new legislation in the UK
In this case the Defendant was an Italian company. Often parties want to bring proceedings in their home court as the system is familiar and it is generally more convenient. Parties may also worry about the enforcement of a foreign judgment, which may be deemed more difficult than enforcing a domestic judgment.
However, the Hague Convention of 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters is now in force in the UK, which should make the recognition and enforcement of judgments between the UK and Contracting States more straightforward. This new legislations should give parties more confidence in the UK system and their ability to enforce UK judgments overseas.
Exclusive vs non-exclusive jurisdiction clauses
If parties want the flexibility of bringing proceedings in their home country, is it worth adopting a non-exclusive jurisdiction clause in the contract instead?
This would provide the right for disputes to be heard in the courts of a particular jurisdiction without prejudice to the right of the other party to bring a claim in the courts of another jurisdiction.
While this does offer an element of flexibility, it also runs the risk of parallel proceedings which can end up being costly and complicated.
For the sake of certainty, it is usually preferable to have an exclusive jurisdiction clause. But parties should be alive to this at the negotiation stage of drafting the contracts. It is often seen as a boilerplate clause that attracts little attention. Parties should think carefully about where they want to bring any disputes arising out of the contract and make sure that they are willing and able to comply with the contractual jurisdiction and governing law clauses.
