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ISDA Anatomy™
In a Nutshell™ Section 13(b):
13(b) Jurisdiction. For any proceedings under this Agreement (“Proceedings”), each party irrevocably:―
- 13(b)(i) submits to:―
- (1) for English law-governed Agreements, the non-exclusive jurisdiction of the English courts (or their exclusive jurisdiction where Proceedings involve a Convention Court); or
- (2) for New York law-governed Agreements, the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in Manhattan;
- 13(b)(ii) waives its right to object to such court as a venue for any Proceedings brought in, or claim it is an inconvenient forum, or that it has no jurisdiction; and
- 13(b)(iii) agrees that Proceedings brought in one jurisdictions will not preclude Proceedings in any other jurisdiction.
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2002 ISDA full text of Section 13(b):
13(b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement (“Proceedings”), each party irrevocably:―
- 13(b)(i) submits:―
- (1) if this Agreement is expressed to be governed by English law, to (A) the non-exclusive jurisdiction of the English courts if the Proceedings do not involve a Convention Court and (B) the exclusive jurisdiction of the English courts if the Proceedings do involve a Convention Court; or
- (2) if this Agreement is expressed to be governed by the laws of the State of New York, to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City;
- 13(b)(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party; and
- 13(b)(iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.
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Click here for the text of Section 13(b) in the 1992 ISDA
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On the disapplication of 13(b)(iii)
Where you wish to elect the exclusive jurisdiction of (say) English courts in your Schedule, you may wish to explicitly disapply the proviso to 13(b) which provides that nothing in this clause precludes the bringing of Proceedings in another jurisdiction (in the flush language of the 1992 ISDA version; in 13(b)(iii) of the 2002 ISDA version).
Strictly speaking you shouldn't need to do this: Section 1(b) provides that the inconsistency created by the use of the expression “exclusive jurisdiction” in the Schedule will prevail over the text the Master Agreement. But that won’t stop officious attorneys the world over trying.
But, counselor, be warned: if you do try to explicitly override it — you know, for good measure and everything — and your counterparty pushes back, having deliberately taken the clarifying language out of a draft, you may be in an inferior position when interpreting the meaning of "exclusive jurisdiction", precisely because the counterparty refused to rule out the use of other jurisdictions. A cracking example of the anal paradox at work. Don’t be too clever by half.