A £275m (£169m) dispute involving UBS and HSH Nordbank – cited as the first true bank-on-bank dispute to hit the UK as a result of the credit crunch – has been refused jurisdiction in the English courts following a Court of Appeal ruling today (18 July).

The judgment, handed down by Lord Justice Ward, Lord Collins of Mapesbury and Lord Justice Toulson, will be seen as a blow for UBS after the bank appealed a ruling handed down by Mr Justice Walker last July.

Today's decision supports Walker's ruling that the UK courts did not have jurisdiction to hear the German bank's claim against UBS.

HSH Nordbank – which is suing UBS in an attempt to recover losses on a $500m (£308m) portfolio of collateralised debt obligations linked to the US mortgage market that were structured and sold by UBS – had argued that the issues under dispute were governed by US law.

The case was filed in New York by HSH Nordbank last February with UBS filing a counter-claim in the UK on the same day.

Simmons & Simmons is advising UBS, with Fountain Court Chambers David Railton QC instructed as counsel.

HSH Nordbank is being advised by litigation heavyweight Peter Calamari, a New York-based partner at corporate disputes specialist Quinn Emanuel Urquhart Oliver & Hedges, with Brick Court Chambers' Jonathan Sumption QC and Quinn Emanuel UK advocate Sue Prevezer QC acting as counsel.

It is understood that the proceedings are now set to go ahead in New York.

UBS has sought permission to appeal today's decision.