Looks like we made it stay in the English courts: English Court of Appeal decision on the interpretation of asymmetric jurisdiction clauses

The Hipgnosis v Barry Manilow [2025] EWCA Civ 486 decision by the Court of Appeal concerns the interpretation of an asymmetric jurisdiction clause in a Music Catalogue Agreement between Hipgnosis and Barry Manilow. The agreement required both parties to submit to the exclusive jurisdiction of the English courts, but provided Mr. Manilow with an option to litigate certain purchase price claims in U.S. courts. A dispute arose over unpaid royalties and additional purchase price claims, leading Hipgnosis to file proceedings in England. Shortly afterward, Mr. Manilow initiated proceedings in Los Angeles, asserting purchase price claims along with other allegations, and sought a stay of the English proceedings.

The High Court initially granted the stay, accepting Mr. Manilow's argument that his choice of the U.S. forum, enabled by the jurisdiction clause, crystallised "floating jurisdiction" in favour of Los Angeles, thereby revoking the English court's jurisdiction over the purchase price claims. On appeal, the Court of Appeal overturned this decision. It held that the English court’s jurisdiction, which was properly invoked by Hipgnosis, could not be revoked by Mr. Manilow's exercise of the U.S. litigation option. The court emphasized that the "floating jurisdiction" concept was flawed and contrary to legal authority. The clause permitted the possibility of parallel proceedings, and this outcome was inherent in the agreement as drafted. The Court of Appeal concluded that the English court retained jurisdiction and refused to grant a discretionary stay, highlighting that all claims could be resolved in England under the agreement's governing law. 

While the decision relates to an asymmetric jurisdiction clause which did not include an option to arbitrate, the Court of Appeal's analysis is equally applicable to asymmetric clauses which do include arbitration provisions. When drafting asymmetric clauses, it is crucial for parties to ensure that the rights and obligations concerning forum are unequivocally articulated, thereby minimising ambiguity and reducing the potential for jurisdictional disputes, particularly where parties intend to carve out or refer particular claims to a specific forum. While the Court of Appeal acknowledged that the possibility of parallel proceedings is inherent in an asymmetric jurisdiction clause, in practice, most parties with an option to arbitrate would want to ensure that the exercise of that option would bring an end to any court proceedings and for all claims to be resolved in the one arbitral forum. Accordingly, it will be critical for parties to ensure that the clause articulates clearly that (i) any proceedings issued by a counterparty are to be discontinued if the option to arbitrate is exercised (and, where possible, the time-frame in which the option can be exercised) and (ii) the counterparty has the right to bring its claims in the new forum. Additionally, in practice, parties who benefit from an option would be well-advised not to take any substantive steps in proceedings issued by the counterparty if they plan on exercising the option, in order to avoid submitting to jurisdiction of the undesired forum.

For a full exploration of the case and its implications, see this post on HSF's Litigation Notes blog.