Jurisdiction clauses: can asymmetry work in your favour?

‘Asymmetric jurisdiction’ arises when a contractual clause requires one party to conduct any litigation in one court while allowing the other party a choice of forum for litigation. Such clauses are a common feature of finance agreements, where the lender wants flexibility to enforce the contract in any jurisdiction(s) where the borrower has assets but wishes to restrict the borrower’s ability to bring a claim to a single, specified jurisdiction.

Under English law, asymmetric jurisdiction clauses are held as valid and enforceable. By contrast, the position on upholding such clauses within the EU had been undecided. On 27th February 2025, the Court of Justice of the European Union (CJEU) ruled that asymmetric jurisdiction clauses are valid and enforceable under Article 25 of the Brussels I Regulation (recast, No. 1215/2012) where the designated courts are all either EU member states or states of the Lugano Convention (being Switzerland, Norway and Iceland) as having jurisdiction.

Whilst this is a welcome clarification, some uncertainty remains. If the jurisdiction clause designates any court outside of the EU and Lugano Convention (e.g. English courts), it isn’t clear how the clause would be interpreted under EU law. For example, if one party is permitted to bring proceedings only in the English courts and the other party to litigate in any competent court, but the restricted party brings a claim in a court in the EU (in breach of the provision), that EU court (a) may not recognise the clause as valid; and (b) may not stay proceedings in favour of the English courts.

As a result, when negotiating a jurisdiction clause in favour of the English courts, it may be preferable to provide for exclusive jurisdiction (i.e. both parties are only able to bring a dispute in the English courts), as an enforcement mechanism that will be recognised and upheld both by courts of the EU and under the Lugano Convention. It will be interesting to see if the CJEU offers more clarity on this in the future.

If you have any questions on jurisdiction or choice of dispute resolution method or forum in your contracts, please get in touch with the commercial and technology team at [email protected] or if you need assistance with enforcement of cross-border claims please contact [email protected].