CJEU Ruling on Asymmetric Jurisdiction Clause Validity—Towards (un)Certainty?
In Short
The Situation: The Court of Justice of the European Union ("CJEU") recently issued an important ruling in the case of Società Italiana Lastre SpA (SIL) v. Agora SARL (C-537/23). The decision addresses the validity criteria of asymmetric jurisdiction clauses in contracts (i.e., clauses that usually require one party to refer disputes to a designated EU Member State court but give the other party the choice to bring proceedings also in a different or in any competent court).
The Development: The CJEU held that an asymmetric jurisdiction clause may be considered valid, as long as such clause complies with the mandatory provision of the Brussels I bis Regulation, identifies "objective factors enabling any court seized to determine whether it has jurisdiction," and that establishes jurisdiction to courts of an EU Member State or a State party to the Lugano Convention.
Looking Ahead: This decision impacts the way commercial agreements are drafted and enforced. However, it does not entirely settle the debate on the validity of asymmetrical jurisdiction clauses due to a lack of clarification from the CJEU regarding the fulfilment of the requirement of precision (i.e., in particular the "objective factors" criteria). Contracting parties should therefore monitor how national courts implement and interpret such clauses in light of this ruling.
Background of the Decision
On February 27, 2025, the CJEU issued an important ruling in the case involving an Italian entity, Società Italiana Lastre SpA ("SIL"), and the French company, Agora SARL ("Agora"). The case concerned the validity of an asymmetric jurisdiction clause provided in a supply contract for cladding panels. The clause at stake provided that any disputes arising out of or in connection with the agreement would be resolved by the court of Brescia, Italy, but also allowed SIL to bring proceedings in other competent courts in Italy or elsewhere.
For the completion of a project commissioned by two individual clients, Agora entered into a supply contract with SIL. After discovering discrepancies in the performance of the work, the clients brought proceedings against Agora and SIL, among others, seeking compensation before the Rennes Court of First Instance in France.
Agora sought to enforce SIL's guarantee before French courts—therefore disregarding the contractual clause stipulating that the courts of Brescia had jurisdiction to hear disputes brought by the parties (the clause gave SIL the option of bringing proceedings against the buyer before another court with jurisdiction in Italy or elsewhere). SIL unsuccessfully challenged the jurisdiction of French courts (and the jurisdiction clause itself). French courts, both in first instance and on appeal, held that the jurisdiction clause granted SIL a "discretionary" choice that violated the requirements of foreseeability and legal certainty provided by Article 25 (1) of Brussels I bis Regulation. SIL lodged an appeal with the French Cour de Cassation, which stayed the proceedings and referred the matter to the CJEU for a preliminary ruling.
Key Aspects of the Ruling
- Application of EU Law for the Validity Assessment of Jurisdiction Clause: The CJEU held that the validity of an asymmetric jurisdiction clause should be assessed based on autonomous principles under Article 25 of the Brussels I bis Regulation, rather than solely on the grounds of "substantive invalidity" under the national law of the designated Member State's jurisdiction. The CJEU clarified that such "substantive invalidity" pertains only to general contract nullity causes like defects in consent, which are insufficient for assessing compliance with the specific validity requirements for jurisdiction clauses.
- Precision Requirement: The CJEU confirmed the validity of asymmetric jurisdiction clauses in principle based on parties' autonomy, provided they designate courts of an EU Member State or a Lugano Convention State. Conversely, a clause conferring jurisdiction on the courts of a third country within a contract between two parties both domiciled in the EU or European Economic Area ("EEA") would violate the requirements of predictability, transparency and legal certainty under the Brussels I bis Regulation. Furthermore, the asymmetric jurisdiction clauses must identify precise objective factors for determining which court has jurisdiction and comply with mandatory provisions of the Regulation, particularly the rules on exclusive jurisdiction rules.
Implications for Commercial Agreements
The CJEU's decision has significant implications for parties negotiating asymmetric jurisdiction clauses in all types of commercial agreements. Such agreements often involve complex cross-border elements, in particular licensing agreements or loans and debt market transaction documents, and the choice of jurisdiction clause can be crucial for the enforcement of the parties' contractual rights.
1. Drafting Considerations
Precision and Clarity: Commercial agreements should clearly specify the courts that have jurisdiction, ensuring that the clause identifies objective factors that enable any court seized to determine whether it has jurisdiction. This is particularly important to avoid disputes over jurisdiction that could delay enforcement actions.
Territorial Limitations: An asymmetric jurisdiction clause in contracts between EU/EEA parties should limit the choice of courts to those within the EU or Lugano Convention States. This avoids the risk of the clause being invalidated for allowing jurisdiction in third countries, which could undermine legal certainty and predictability.
Implications of Governing Law Clauses: Independent from the permissibility of asymmetric jurisdiction clauses in principle as confirmed by the CJEU, parties ought to be cautious in providing more than one possible jurisdiction, in light of governing law clauses. Bringing litigation in foreign jurisdiction under different laws may have unwanted implications. Arbitration clauses may be an alternative option.
2. Strategic Implications
Greater Autonomy of Parties' Will: Parties to a commercial agreement should leverage the flexibility allowed by the CJEU decision to select jurisdictions of strategic interest in the enforcement of their contractual prerogatives. While the validity criteria for such provisions remain uncertain at this stage, the CJEU acknowledges in principle the enforcement of asymmetrical jurisdiction clauses and gives the parties greater freedom in their choice of forum.
Risk Management: Parties should assess the potential risks associated with asymmetric jurisdiction clauses, including the possibility of challenges based on the lack of precision, and adverse implications of a choice of law clause. Consideration should be given to whether a mutual exclusive jurisdiction clause might offer greater certainty and reduce the risk of jurisdictional disputes.
Conclusion
The CJEU's ruling marks a significant development in the enforcement of asymmetric jurisdiction clauses within the EU and suggests that the autonomous will of the parties prevails. However, the CJEU fails to establish an effective legal test for assessing asymmetrical jurisdiction clauses, as it only sets out "negative" requirements (e.g. no derogation from a rule of exclusive jurisdiction), without specifying precisely what is meant by "objective factors" for determining jurisdiction, thus leaving room for uncertainty.
Three Key Takeaways:
- Autonomous criteria for validity: The validity of jurisdiction clauses should be assessed based on autonomous criteria derived under Article 25 of the Brussels I bis Regulation, meaning that these clauses must be sufficiently precise and balanced to ensure predictability and legal certainty for both parties.
- An (incomplete) assessment of validity criteria: While the CJEU confirms that asymmetric jurisdiction clauses can be valid, the decision provides no guidance as to the precise objective factors that must be identified within the clause to enable an EU Member State's court to ascertain its jurisdiction.
- Strategic considerations: Contracting parties should consider the strategic implications and risks of including asymmetric jurisdiction clauses in their agreements and monitor how national courts implement the CJEU decision, particularly in the context of commercial agreements.
