Thanks to Rossella De Sio for collaborating on this article
With a landmark ruling that is likely to raise more questions than answers, the Court of Justice of the European Union confirmed the validity of asymmetric jurisdiction clauses in international contracts under the Brussels I-bis Regulation (Regulation (EU) No. 2012/1215).[1]
Asymmetric jurisdiction clauses are commonly used in financial agreements and allow one party to choose between multiple courts for resolving disputes, while restricting the other party to a specific court. These clauses may create an imbalance in the parties’ ability to select the forum for litigation and their admissibility has not been universally accepted in all Member States.
In light of the paramount principle of parties’ autonomy, the Court of Justice noted that the Brussels I-bis Regulation does not preclude parties from entering into such jurisdictional clauses. However, the Court sought to condition their validity on certain elements.
Factual background
The case stemmed from a dispute involving the Italian company Società Italiana Lastre SpA (SIL) and the French Agora SARL. They entered into a supply agreement that included a jurisdictional agreement. The asymmetric clause allowed SIL to bring actions before any other competent courts in Italy or abroad and reads: “the court of Brescia [(Italy)] will have jurisdiction over any dispute arising from or related to this contract. [SIL] reserves the right to bring proceedings against the purchaser before another competent court in Italy or elsewhere” (par. 17).
Agora SARL sued SIL before French courts. In both lower instances, the courts rejected SIL’s lack of jurisdiction objection – arguing that the asymmetric jurisdictional clause was invalid. The Cour de Cassation referred the case to the Court of Justice.
First: the validity of jurisdiction clauses must be assessed under the Brussels I-bis Regulation
With the first preliminary question, the Court of Justice confirmed its previous case law and ruled that the validity of jurisdictional clauses must be assessed exclusively based on the Brussels I-bis Regulation and, specifically, on its Art. 25.
Art. 25 indeed states that the parties can agree that “a court or the courts of a Member State are to have jurisdiction to settle” their dispute “unless the agreement is null and void as to its substantive validity under the law of that Member State.”
The reference to the substantive laws of the Member State must be interpreted as limited to “the general causes of nullity of a contract, namely, in particular, those which vitiate consent, such as error, deceit, violence or fraud, and incapacity to contract, causes which, unlike the conditions of validity pertaining to the agreement conferring jurisdiction themselves.” (par. 36). These concepts are not regulated by the Regulation.
For jurisdiction clauses to be valid, the agreement must precisely identify “the court or courts of a Member State which is to settle any disputes which have arisen or which may arise between the parties” (par. 42). Such a requirement is consistent with “the objectives of foreseeability, transparency and legal certainty” (par. 46).
Second: asymmetric jurisdiction clauses are generally valid if they designate courts of EU Member States or States parties to the Lugano II Convention
With the second preliminary question, the Court confirmed the validity of asymmetric jurisdiction clauses under the Brussels I-bis Regulation. The Court however identifies three criteria that must be met.
First, the parties are free to choose more than one competent venue to adjudicate their disputes. The Regulation only limits their autonomy in specific cases, such as Articles 15, 19, and 23, in matters of insurance contracts, consumer contracts, and employment contracts, and the exclusive jurisdiction under Article 24.
Second, to comply with the objectives of foreseeability, transparency and legal certainty, the clause must precisely designate courts of a Member State or of States that are parties to the Lugano II Convention.
On this point, controversially, the Court goes beyond and asserts that the designation of a State that is neither an EU Member State nor a State party to the Lugano II Convention would be contrary to the Brussels I bis Regulation. EU Law does not regulate the designation of a court of a third country and, such a situation would be “detrimental to legal certainty” (par. 60) as the application of national laws would likely lead to different outcomes.
Third, outside of the cases where jurisdiction cannot be derogated, an asymmetric clause granting one party more rights than the other does not impact its validity.
What’s left for asymmetric clauses designating third countries?
The decision has already raised many questions, especially regarding jurisdiction clauses that designate courts of third countries, e.g., the UK, as the competent venue.
Based on the strict wording of this decision, a national court could rule out the validity of asymmetric clauses designating courts of third countries as the competent venue.
Interestingly, however, this outcome seems to be at odds with the principle of parties’ autonomy, which constitutes the backbone of the Court of Justice’s decision.
A reasonable interpretation suggests that the Court’s reasoning cannot per se invalidate asymmetric jurisdictional clauses designating courts of countries not parties to the EU or the Lugano II Convention. In fact, Art. 25 of the Brussels I-bis Regulation regulates exclusively jurisdictional clauses that designate courts in the EU. This constitutes a limit to the Court of Justice’s jurisdiction.
Hence, if an asymmetric clause designates courts of third countries, a local court should assess its validity pursuant to the laws that regulate the contract.
Pending a clarification from other EU courts based on the Court of Justice’s decision, to reduce the risk that asymmetric clauses are called into question, the parties should:
- Ensure that jurisdictional agreements in their contracts are drafted with clear and precise terms to avoid disputes on their validity.
- Avoid clauses that could be imprecise or unbalanced, as these may be invalidated by courts.
- Be prepared to litigate if their clause designates a court of a third country outside the EU or the States that are parties to the Lugano II Convention. It is impossible to exclude that a court of a Member State could invalidate such a clause based on the Court of Justice’s decision.
[1] Judgment of 27 February 2025, Società Italiana Lastre SpA (SIL) v Agora SARL, C-537/23, EU:C:2025:120.
