Dexia Crediop SPA v Comune Di Prato

Dexia Crediop SPA v Comune Di Prato

Prato had capacity to enter into the swaps under Italian law; the swaps did not constitute 'indebtedness' under Article 119 or fall within Article 41 of Law 448/2001. Article 3(3) of the Rome Convention was not engaged because the transactions had international elements, including use of ISDA documentation and back-to-back contracts with non-Italian banks. Therefore, mandatory rules of Italian law did not apply. Even if they did, only Article 30 TUF would defeat Dexia's claim, but Prato failed to prove loss for its counterclaim. Dexia is entitled to judgment for the sums claimed.

Parties
Appellant: Dexia Crediop S.p.A.; Respondent and Cross Appellant: Comune di Prato
Jurisdiction
England and Wales
Judgment Date
15 June 2017
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal allowed in favour of Dexia; Prato's appeal and counterclaims dismissed.
Legal Topics
Derivatives, Interest Rate Swaps, Capacity of Local Authorities, Mandatory Rules, Rome Convention, Restitution, Statutory Interpretation, Consumer Protection
Conflict of Laws Banking and Finance Contract Law Public/administrative Law Derivatives Interest Rate Swaps Capacity of Local Authorities Mandatory Rules +4 more

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Parties

Dexia Crediop S.p.A.

Appellant

Comune di Prato

Respondent and Cross Appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether Prato had capacity under Italian law to enter into the swaps
  2. 2 Whether mandatory rules of Italian law applied to the swaps under Article 3(3) of the Rome Convention
  3. 3 Whether the swaps were void under Italian law (Article 119 Constitution, Article 41 Law 448/2001, Article 30 TUF)

Ratio Decidendi

Prato had capacity to enter into the swaps under Italian law; the swaps did not constitute 'indebtedness' under Article 119 or fall within Article 41 of Law 448/2001. Article 3(3) of the Rome Convention was not engaged because the transactions had international elements, including use of ISDA documentation and back-to-back contracts with non-Italian banks. Therefore, mandatory rules of Italian law did not apply. Even if they did, only Article 30 TUF would defeat Dexia's claim, but Prato failed to prove loss for its counterclaim. Dexia is entitled to judgment for the sums claimed.

Court Disposition

Appeal allowed in favour of Dexia; Prato's appeal and counterclaims dismissed.

Orders

  • Judgment for Dexia for €12,017,611.55 with liberty to apply for assessment of interest.
  • Prato to pay 90% of Dexia's costs of trial and appeal.