Derivatives Update: The 2002 ISDA Master Agreement's Jurisdiction Clause

The recent case of SwissMarine Corporation Ltd v OW Supply & Trading A/S (in bankruptcy) [2015] EWHC 1571 (Comm) reached some interesting conclusions as to how the jurisdiction clause in the 2002 ISDA Master Agreement operates when the English Court's jurisdiction is chosen.

Background

SwissMarine and OW Supply entered into a 2002 ISDA Master Agreement. An event of default under the 2002 ISDA occurred when OW Supply filed for bankruptcy in Denmark on 7 November 2014. 

SwissMarine chose not to designate an early termination of the 2002 ISDA on the basis of OW Supply's insolvency. Instead it brought proceedings in London for a declaration that, under Section 2(a)(iii) of the 2002 ISDA, it was not obliged to make any payment to OW Supply as long as this event of default was continuing.  Click here for our most recent alerter on Section 2(a)(iii) of the ISDA Master Agreements.