CJEU Clarifies Validity of Asymmetric Jurisdiction Clauses

Could the long-running debate over the validity of unilateral or asymmetrical jurisdiction clauses soon be resolved? Following the Court of Justice of the European Union’s (CJEU’s) judgment of 27 February 2025, which sets out criteria on this issue, the French Court de Cassation [1] is expected to provide long-awaited clarification that will be of critical importance for businesses and financial institutions that continue to rely on such clauses in cross-border contractual arrangements.

Regulation (EC) No. 44/2001 of 22 December 2000 (Brussels I), on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, was superseded by Regulation (EU) No. 1215/2012 of 12 December 2012 (Brussels I bis Regulation), applicable since 10 January 2015. While this recast was mainly intended to streamline the application for the recognition and enforcement of judgments within the EU member states, it also introduced significant changes to the legal framework governing jurisdiction clauses and altered the regulation’s initial scope.

Among these new features are (1) the extension of the applicability of the Brussels I bis Regulation to jurisdiction clauses irrespective of the parties’ domiciles, (2) the assertion of the autonomy of the jurisdiction clause vis-à-vis the contract from which it originates, and (3) the clarification that the designated court has jurisdiction unless the jurisdiction clause is fundamentally flawed under the law of the EU member state concerned.

However, these developments have not preempted all uncertainties, particularly regarding the validity of unilateral or asymmetrical jurisdiction clauses (i.e., imposing limited jurisdictional options on one party only). French case law has evolved considerably on this issue, through sometimes dissenting decisions.

DEVELOPMENTS IN FRENCH CASE LAW

In a decision dated 26 September 2012, [2] the First Civil Chamber of the Cour de Cassation held that a jurisdiction clause was invalid if it subjected one party (the client) to the exclusive jurisdiction of a court (i.e., the courts of Luxembourg) while granting the other party (Rothschild’s Luxembourg bank) the discretionary option of bringing proceedings before the court of the client's domicile or any other competent court if the domicile of the client was not retained.

The Cour de Cassation considered that such a clause was discretionary and therefore contrary to the principles of legal certainty and predictability. At the time, the ruling was heavily criticised by certain authors as it considered, on the one hand, that the performance of the contract did not depend on Rothschild’s choice in the jurisdiction clause, which did not constitute a discretionary option, and, on the other hand, that the Brussels I bis Regulation could not be interpreted in light of French contract law.

In two judgments dated 25 March 2015 and 7 October 2015, the First Civil Chamber of the Court de Cassation somewhat softened its position.

On 25 March 2015 (Crédit Suisse), the Court de Cassation considered that before applying the asymmetrical clause (which was drafted in terms similar to those of the Rothschild judgment), the Court of Appeal should have inquired whether the options available to Crédit Suisse were based on objective factors, implying that an asymmetrical jurisdiction clause may be valid provided that it complies with the objective of predictability and legal certainty pursued by the Lugano Convention of 30 October 2007.

On 7 October 2015 (Apple Sales International), the jurisdiction clause was asymmetrical, but the options were limited (i.e., Irish courts or courts of the place where the reseller's registered office was located or the courts of any state in which the supplier had suffered damages). The Court de Cassation overruled the appellate judgment which struck the jurisdiction clause on the basis of a textual error, emphasising that the clause complied with the principle of predictability governing jurisdiction clauses. [3]

Subsequently, ruling again in the Crédit Suisse case, [4] the Court de Cassation confirmed the need for an objective identification of the alternative jurisdictions. It further refined its standing in a judgment dated 3 October 2018 [5] by considering that a unilateral jurisdiction clause, which does not identify the applicable rules of jurisdiction between EU member states or objective criteria for identifying jurisdiction, did not meet the requirement of predictability under Brussels I bis Regulation.

The validity of unilateral or asymmetrical jurisdiction clauses therefore remained complex and subject to interpretation by the French courts.

CASE C-537/23

On 27 February 2025, the CJEU handed down an important decision, Case C-537/23, concerning the validity of asymmetric jurisdiction clauses. This decision, resulting from a petition by the French Court de Cassation, sheds new light on the issue.

The CJEU indeed considers that asymmetric jurisdiction clauses may be valid, but only under certain strict conditions:

1. Autonomy under the Brussels I bis Regulation: The CJEU establishes that asymmetric jurisdiction clauses should be assessed under the autonomy criteria set forth in the Brussels I bis Regulation, rather than national law, to ensure the uniformity and predictability of the legal framework within the European Union.
2. Geographical limitation: The CJEU imposes significant limits on the validity of asymmetric jurisdiction clauses. The most notable is that a jurisdiction clause may only designate courts of EU member states or members of the Lugano Convention; otherwise, it may not be in line with the objectives of predictability, transparency, and legal certainty, as the jurisdiction of the court would be determined based on the rules of private international law of third countries, thereby creating an increased risk of conflicts of jurisdiction detrimental to legal certainty.
3. Objective and precise criteria: Asymmetric jurisdiction clauses must also include objective factors that are sufficiently precise to allow any designated court to determine whether it has jurisdiction.
4. Compatibility with protective rules: Asymmetric jurisdiction clauses must not conflict with the rules of jurisdiction in matters of insurance, consumer contracts, or individual employment contracts, nor with the rules of exclusive jurisdiction (mainly in matters of real estate, company law, and intellectual property).

IMPACT AND PERSPECTIVE

The CJEU judgment of 27 February 2025, although it provides important clarifications, does not put an end to the debate on the validity of asymmetric jurisdiction clauses in the European Union.

Despite the territorial limitation to courts of EU member states or members of the Lugano Convention, for instance, certain sectors (e.g., financing) may still have to designate third-party jurisdictions, such as English courts. Although the CJEU’s judgment is not directly applicable to them, the courts of the European Union might rely on it to make a determination. Furthermore, it is not clear whether certain clauses granting jurisdiction to “any competent court,” without additional information, as scrutinised by the First Civil Chamber of the Court de Cassation, will succumb to the objective criteria test or not.

The forthcoming decision of the Court de Cassation in the case that gave rise to the CJEU petition should provide guidance on how French courts will interpret the conditions set by the CJEU.

CONCLUSION

The CJEU’s judgment of 27 February 2025 is an important step in clarifying the law applicable to unilateral or asymmetrical jurisdiction clauses. By confirming the validity of such clauses while imposing strict limitations, the CJEU is reinforcing legal certainty and predictability in international transactions. However, questions remain, particularly regarding the interpretation of what constitutes “objective factors” and the impact of the geographical limitation of available courts. It is therefore essential to closely monitor future case law developments of the Court de Cassation to ascertain its position for the optimal application of these principles.