Asymmetric jurisdiction clauses: French court refers questions of validity to CJEU

In recent decades the courts of some countries, including some EU member states, have questioned the validity of asymmetric jurisdiction clauses or have refused to give effect to them. These clauses (also known as unilateral or one-way clauses) give one party greater flexibility as to the forum in which they can bring proceedings. They are often used in finance transactions, to give the lender flexibility to sue the borrower in any jurisdiction where it has assets, while restricting the borrower to a named jurisdiction. For example, a clause could allow the lender to bring an action before the English courts or any court which will accept jurisdiction under its own conflict of laws rules, while requiring the borrower to bring any action before the English courts.

The English courts have repeatedly held that asymmetric clauses are valid – and, indeed, that they may be considered exclusive jurisdiction clauses for the purposes of the recast Brussels Regulation (in cases commenced before the end of 2020, in which that Regulation continues to apply to the UK). See for example our blog posts here and here.

Decisions refusing to enforce these clauses have emerged, however, from various EU member state courts, including the courts in Bulgaria, Poland and (as particularly relevant for our purposes) France, as well as courts outside the EU. So it is significant that the French court has now referred to the CJEU three questions relating to the validity of such clauses:

1. What law should govern the validity of unilateral clauses: EU law or EU member states’ national laws?
2. If EU law governs this question, does EU law prohibit unilateral clauses?
3. Alternatively, if the question is governed by national laws, how should a court decide which member state’s law should be applied?

In our latest Litigation Notes blog post, we consider the relevant French case law, the questions to be addressed by the CJEU, and why this is still relevant to the UK despite Brexit.