Ireland: Swaps Mis-Selling Case Struck Out For Want Of Jurisdiction

Last Updated: 19 February 2014
Article by Conor McDonnell, Colin Monaghan and Amelia Walsh

The Commercial Court has dismissed proceedings commenced by a number of commercial entities domiciled in the British Virgin Islands in respect of the alleged mis-selling of interest rate swaps by The Royal Bank of Scotland plc (Agios Steamship Inc., Beautiful Steamship Inc., Eastwynd Steamship Inc. and Kingdom Steamship Inc. v The Royal Bank of Scotland plc (Ms Justice Finlay Geoghegan, 16 January 2014)).


Each of the Plaintiffs are entities registered and incorporated in the British Virgin Islands and were formed for the purposes of entering into and/or taking the benefit of, among other things, ship building contracts and corresponding financing contracts. By way of a loan agreement, the Royal Bank of Scotland plc (the "Bank") had advanced a term loan to part-finance four Supermax Bulk Carriers to be constructed at STX (Dalian) Ship Building Company Limited in Dalian, China. This loan agreement provided for the exclusive jurisdiction of the English Courts.

The Plaintiffs subsequently entered into a number of interest rate swap transactions with the Bank in 2008 (the "Swaps"), to hedge their liability for interest on foot of the loan agreement. An ISDA Master Agreement was entered into on 26 July 2007 which provided that it would be governed by and construed in accordance with the laws of England and, accordingly, be subject to the jurisdiction of the English Courts. The respective confirmations of the Swaps executed by the parties further provided for the jurisdiction of the English Courts (with the exception of one swap, which provided for the non-exclusive jurisdiction of the courts of the State of New York, though this was subsequently replaced in 2009 and 2010).


The proceedings were initiated by the Plaintiffs in August 2013 alleging that the Swaps had been mis-sold and seeking, among other things, restitution for the total sum in respect of the Swaps, an equitable account for profits and damages for breach of contract and breach of duty (including statutory duty). A Conditional Appearance Subject to Jurisdiction was subsequently entered into on behalf of the Bank on 11 October 2013, without prejudice and solely for the purpose of contesting the jurisdiction of the High Court. The proceedings were entered into the Commercial List of the High Court on 14 October 2014.

Arthur Cox, on behalf of the Bank, issued a motion to strike out the proceedings and/or contest jurisdiction on foot of EC Regulation No 44/2001 on 4 November 2013. This application was heard before Ms Justice Finlay Geoghegan on 16 January 2014.


It was accepted by the parties that the jurisdiction of the Irish Court to hear and determine the Plaintiffs' claim was governed by EC Regulation No 44/2001 by reason of the fact that the Bank is a company domiciled in a Member State of the European Union, i.e. Scotland. It was further accepted that the fact that the Bank has a branch in this jurisdiction does not of itself give the Irish Courts jurisdiction to hear the proceedings.

In this regard, the Bank contended that, in circumstances where it is registered and domiciled in Scotland pursuant to Article 60 of EC Regulation No 44/2001, it may not be sued in the Courts of Ireland save by virtue of the exceptions to the general rule on domicile set out in Sections 2 to 7 of Chapter II of EC Regulation No 44/2001. The Bank further contended that, as the Plaintiffs' claim did not fall within the ambit of any of the exceptions set out in Sections 2 to 7 of Chapter II, in that the dispute did not arise out of the operations of the Bank's branch in Ireland, there was no basis upon which the proceedings could be maintained against the Bank in this jurisdiction.

The Court took into account the contention by the Bank that, even if the Court otherwise had jurisdiction to hear and determine the proceedings, the parties had agreed to submit to the exclusive jurisdiction of the English Courts in the event of any disputes arising out of the loan agreement and the various Swaps.

The Court, in relying on the judgment of Bio-Medical Research Limited trading as Slendertone v Delatex SA [2004] IR 307, accepted that the only basis upon which the Courts of Ireland could have jurisdiction to hear and determine the Plaintiffs' claim would be if the parties could be deemed to have reached a clear and precise agreement to confer such jurisdiction, which would amount to a prorogation of jurisdiction for the purposes of Article 23 of EC Regulation No 44/2001. In circumstances where no such agreement was evident from the provisions of the loan agreement and the Swaps, the onus of which in any event was on the Plaintiffs to prove, there was no basis upon which the Plaintiffs could establish jurisdiction in favour of the Courts of Ireland:

"In those circumstances, it appears to me, and I conclude that there is no agreement between the parties which, for the purposes of Article 23 of the Regulation, confers, by agreement, jurisdiction on the Courts of Ireland. And that is the only basis upon which the Plaintiffs have now advanced their entitlement to maintain the proceedings in this jurisdiction".

The Court ultimately declared that it had no jurisdiction to hear and determine the Plaintiffs' claim and, accordingly, struck out the proceedings for want of jurisdiction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.