Choice of Law: A Fair Exchange

    View Authors August 2017

    Dexia Crediop S.p.A. v Comune Di Prato [2017] EWCA Civ 428  

    In the sphere of financial derivatives, claims in the English courts by foreign municipalities and other public bodies subject to special legislation have, since 2008, been numerous. In particular, there have been a number of disputes over whether foreign “mandatory” laws apply to derivative contracts by operation of Art 3(3) of the Rome Convention despite the parties’ express choice of English law. This article provides is analysis of the recent Court of Appeal judgment in Dexia Crediop SPA v Comune Di Prato [2017] which has provided some much needed clarification and certainty as to the operation of Art 3(3) of the Rome Convention in interest rate swaps and other derivatives with an international element. The article also provides useful guidance as to how foreign law issues are to be dealt with in the English courts and whether the mark-to-market of a swap can be considered an initial cost. 

    This article was first published in the Commercial Litigation Journal.