Asymmetric jurisdiction clauses: when will they be effective?

Herbert Smith Freehills LLP have published an article in Butterworths Journal of International Banking and Financial Law on asymmetric jurisdiction clauses and when they will be effective.

Asymmetric jurisdiction clauses (also known as unilateral or one-way clauses) allow one party greater choice than the other as to the courts in which proceedings can be brought if a dispute arises under the agreement. Such clauses are often used in finance agreements, where they typically require an obligor to bring claims in a named jurisdiction, but permit the finance parties to sue in any competent court. This gives the finance parties flexibility to choose an appropriate jurisdiction once a dispute arises depending on where the counterparty may have assets at that time.

In this article, we consider the impact of the decision of the Court of Justice of the European Union (CJEU) in Società Italiana Lastre SpA (SIL) v Agora SARL (C‑537/23, 27 February 2025). The CJEU confirmed that asymmetric jurisdiction clauses may be valid under Art 25 of the recast Brussels Regulation despite giving one party a greater choice as to where to bring proceedings. However, the decision suggests that validity will be called into doubt unless the choice of courts is limited to EU member states and contracting states to the Lugano Convention (ie Iceland, Norway and Switzerland). This may cause difficulties for parties choosing asymmetric English jurisdiction clauses where there is an EU nexus.

The article can be found here: Asymmetric jurisdiction clauses: when will they be effective? This article first appeared in the May 2025 edition of JIBFL.