Banca Intesa Sanpaolo Spa & Anor. v Comune Di Venezia

Banca Intesa Sanpaolo Spa & Anor. v Comune Di Venezia

Venice lacked capacity under Italian law (as interpreted by the Italian Supreme Court in Cattolica) to enter into the swaps because they were speculative and/or involved recourse to indebtedness for non-investment purposes. Under English conflict rules, this rendered the swaps void and unenforceable. Venice was entitled to restitution of sums paid, but the banks could rely in principle on a change of position defence for payments made under back-to-back hedging swaps. The banks' estoppel, misrepresentation, and indemnity arguments failed. Venice's suitability/advisory claims failed for lack of breach, causation, and/or were time-barred.

Parties
Claimant: Banca Intesa Sanpaolo SpA; Claimant: Dexia Crediop SA; Defendant: Comune di Venezia
Jurisdiction
England and Wales
Judgment Date
14 October 2022
Procedural Posture
Commercial Court Trial (english Law, International Swaps) / Final Judgment After Full Trial
Outcome
Swaps declared void and unenforceable for lack of capacity; restitution ordered subject to change of position defence; all other claims and counterclaims dismissed.
Legal Topics
Interest Rate Swaps, Capacity of Public Authorities, Mandatory Rules (rome Convention), Restitution for Void Contracts, Change of Position Defence, Limitation Periods, Misrepresentation, Suitability of Financial Products
Banking and Finance Law Conflict of Laws Public/administrative Law Contract Law Restitution/unjust Enrichment Interest Rate Swaps Capacity of Public Authorities Mandatory Rules (rome Convention) +5 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 6 Authorities cited 30 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Banca Intesa Sanpaolo SpA

Claimant

Dexia Crediop SA

Claimant

Comune di Venezia

Defendant

Procedural Posture

Commercial Court Trial (english Law, International Swaps) / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether the Italian local authority (Venice) had capacity to enter into the swaps under Italian law and English conflict rules
  2. 2 Whether the swaps were void for lack of capacity, illegality, or lack of authority
  3. 3 Whether mandatory Italian law applied under Article 3(3) Rome Convention

Ratio Decidendi

Venice lacked capacity under Italian law (as interpreted by the Italian Supreme Court in Cattolica) to enter into the swaps because they were speculative and/or involved recourse to indebtedness for non-investment purposes. Under English conflict rules, this rendered the swaps void and unenforceable. Venice was entitled to restitution of sums paid, but the banks could rely in principle on a change of position defence for payments made under back-to-back hedging swaps. The banks' estoppel, misrepresentation, and indemnity arguments failed. Venice's suitability/advisory claims failed for lack of breach, causation, and/or were time-barred.

Court Disposition

Swaps declared void and unenforceable for lack of capacity; restitution ordered subject to change of position defence; all other claims and counterclaims dismissed.

Orders

  • Declaration that the swaps are void and unenforceable
  • Venice entitled to restitution of sums paid under the swaps, subject to change of position defence for hedging swaps