Asymmetric jurisdiction clauses: CJEU finds jurisdiction clause in favour of EU courts may be valid despite giving one party greater choice

Last Thursday (27 February) the Court of Justice of the European Union (CJEU) handed down an important judgment on the validity of asymmetric jurisdiction clauses under EU law, responding to questions referred by the French court (outlined in our previous blog post here): Società Italiana Lastre SpA (SIL) v Agora SARL Case C‑537/23 ECLI:EU:C:2025:120.

Asymmetric jurisdiction clauses (also known as unilateral or one-way clauses) are often used in finance transactions, as they can for example give a lender flexibility to sue a borrower in multiple jurisdictions where it may have assets, while restricting the borrower to bringing any proceedings in a named jurisdiction. In recent decades the courts of some countries, including some EU Member States, have refused to give effect to such clauses, although the English courts have repeatedly confirmed their validity as a matter of English law.

The present decision clarifies how EU Member State courts should determine whether an asymmetric clause is valid for the purposes of article 25 of the recast Brussels Regulation, which applies where contracting parties have agreed on the jurisdiction of an EU court. In essence:

• The decision establishes that an asymmetric jurisdiction clause in favour of an EU court may be valid under article 25 despite giving one party a broader choice of courts in which to bring proceedings than it allows the other party.
• However, it suggests that such a clause will not be valid under article 25 if, properly interpreted, the choice of courts includes courts of countries which are neither EU Member States nor contracting states to the Lugano Convention (ie Iceland, Norway and Switzerland).

The decision leaves a number of important questions unanswered, as outlined below.

Interpretation of EU asymmetric clauses

• The CJEU does not address the question of whether a clause, such as in the present case, which provides for either party to sue in a named EU court but allows one of them to sue in "another competent court elsewhere" might be interpreted as referring only to competent courts in EU/Lugano states, so as to render the clause valid under article 25. Presumably that will be a question for the national court seised of a dispute to consider, applying the governing law applicable to the clause.
• It would seem prudent for commercial parties agreeing asymmetric jurisdiction clauses in favour of EU courts to ensure that the choice of court is expressly limited to EU/Lugano state courts so as to avoid any doubt as to validity on this basis.

Asymmetric clauses in favour of the English courts

• The decision does not address the validity of asymmetric jurisdiction clauses in favour of non-EU courts, such as where a borrower is required to sue in the English court but the lender is permitted to sue either in that court or in any other competent court.
• Such a clause will be given effect by the English court, but it will not fall within article 25 and so there is uncertainty as to whether an EU court seised of a dispute in apparent breach of the clause could stay its proceedings or decline jurisdiction in favour of the English court. That is because the recast Brussels Regulation gives a discretion to stay an action in favour of identical or related proceedings instituted before a non-EU court where those non-EU proceedings were commenced first in time, under articles 33 and 34, but it contains no other express provision permitting a stay of proceedings in favour of a non-EU court.
• Where a dispute falls within an exclusive jurisdiction clause in favour of the English court under the 2005 Hague Choice of Court Convention ("Hague 2005"), an EU court will be obliged to suspend or dismiss any proceedings brought in breach of the clause. However, asymmetric clauses are not considered to be exclusive for the purposes of Hague 2005.
• Commercial parties negotiating an English jurisdiction clause where there is an EU nexus will need to consider in each case whether the potential advantages of an asymmetric clause outweigh the potential uncertainties as to whether such a clause will be given effect by an EU court. In some cases, parties may prefer the certainty afforded by an exclusive English jurisdiction clause, while recognising that such a clause will reduce flexibility.

Enforcement of judgments

• The decision does not say anything about enforcement of judgments given pursuant to asymmetric jurisdiction clauses. However, both the EU and the UK (from 1 July 2025) have acceded to the 2019 Hague Judgments Convention ("Hague 2019"), which provides for the mutual enforcement of judgments where certain eligibility criteria are met, including where the judgment was given by a court designated in a jurisdiction agreement (other than an exclusive jurisdiction agreement, as those fall within Hague 2005).
• Presumably the fact that an asymmetric clause in favour of a non-EU court does not fall within article 25 of the recast Brussels Regulation cannot affect its status as a jurisdiction agreement designating a court for the purposes of Hague 2019 – and therefore the present CJEU decision should have no effect on the enforceability of judgments pursuant to asymmetric clauses under Hague 2019.

Arbitration implications

• The decision does not address arbitration as it focuses solely on the validity of asymmetric jurisdiction clauses under EU law. Nonetheless, clauses that grant one party the option to choose between arbitration and litigation while restricting the other party to only one of these options may raise similar concerns as those raised before the CJEU in this referral.
• The CJEU's reasoning rests on Article 25 of the recast Brussels Regulation which, under Recital 12, does not apply to arbitration. Therefore, parties should not assume this reasoning would be applicable to option clauses involving arbitration. However, the court's view that an asymmetric clause granting one party greater rights does not invalidate it under the Recast Brussels Regulation and that party choice should be respected may provide some reassurance to parties as to how EU law might approach such option clauses.

Background

The dispute arose between SIL, an Italian company, and Agora, a French company, under a contract for the supply of panelling. The contract contained a jurisdiction clause in favour of the court of Brescia, Italy, but also stated that SIL "reserves the right to bring proceedings against [Agora] before another competent court in Italy or elsewhere".

Agora brought proceedings against SIL in the French courts, and SIL challenged jurisdiction on the basis of the jurisdiction clause. The French regional court and court of appeal rejected that challenge on the basis that the jurisdiction clause was unlawful as it gave SIL a greater choice of jurisdiction than it gave Agora.

SIL brought an appeal on a point of law before the French Cour de Cassation, which referred certain questions of law to the CJEU including: (i) whether the validity of an asymmetric clause under article 25 should be determined by applying autonomous rules of EU law derived from article 25 or the law of the Member State designated by the clause; and (ii) whether such clauses were inconsistent with article 25, which provides as follows:

"If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes…, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State…."

Decision

The CJEU held that in assessing the validity of a jurisdiction clause, complaints alleging imprecision or asymmetry must be determined by applying autonomous rules derived from article 25, not the law of the Member State designated – though article 25 recognises that a jurisdiction agreement may also be null and void on other grounds under that national law.

The CJEU observed that EU jurisdiction rules are intended to be highly predictable and transparent in order to ensure legal certainty, so that a party can easily predict where they may sue or be sued and a national court can easily decide on its own jurisdiction (as reflected in recitals 15 and 16 of the Regulation). The requirement in article 25 that the parties "have agreed" on a court or courts of a Member State does not require that the chosen court can be determined solely by the wording of the clause (as established in Coreck, C-387/98 EU:C:2000:606, decided under the Brussels Convention). However, it must identify with sufficient precision the objective factors on the basis of which the parties have agreed to choose the relevant court or courts.

As to the validity of an asymmetric clause under article 25, the CJEU stated that the reference in article 25 to the courts "of a Member State" did not mean the parties must necessarily designate the courts of a single Member State. That would be contrary to the principle that the parties' freedom of choice should be respected (subject to the provisions conferring exclusive jurisdiction on certain courts, such as in matters relating to land, and the special rules for insurance, consumer and employment matters), as reflected in recital 19 of the Regulation. Accordingly, the CJEU said, the validity of an asymmetric clause could not be called into question under article 25 on the ground that it permits a party to bring proceedings before the courts of different Member States (or contracting states to the Lugano Convention).

Further, an agreement conferring jurisdiction on a particular Member State court (or Lugano contracting state court), while allowing a party to bring proceedings in other courts which have jurisdiction pursuant to the recast Brussels Regulation or Lugano Convention, would satisfy the requirement of precision and the objectives of foreseeability, transparency and legal certainty. It would effectively amount to a reference to the general rules of jurisdiction provided for by those instruments.

However, the CJEU stated, if in referring to "another competent court… elsewhere", the jurisdiction clause at issue in the present case were to be interpreted as meaning that it also designates courts of "one or more States which are not Members of the European Union or parties to the Lugano II Convention", it would be contrary to the recast Brussels Regulation. The CJEU added:

"In that case, that agreement conferring jurisdiction would not be consistent with the objectives of foreseeability, transparency and legal certainty referred to in recitals 15 and 16 of that regulation, to the extent that EU law does not, in itself, make it possible to designate the courts which have jurisdiction, as that designation is, where appropriate, the result of the application of the rules of private international law of third countries."

Accordingly, the CJEU held, the asymmetric nature of a jurisdiction agreement such as the one found in the present case does not render it unlawful, if the parties have freely consented to it. Such a clause will be valid in so far as it:

1. designates courts of one or several EU Member States or Lugano contracting states;
2. identifies objective factors which are sufficiently precise to enable the court seised to ascertain whether it has jurisdiction; and
3. is not contrary to the exclusive jurisdiction provisions of the recast Brussels Regulation (eg relating to land) or the special rules for insurance, consumer and employment matters.