CJEU Imposes Limits On The Validity Of Asymmetric EU Jurisdiction Clauses

In a decision that may cause some concern, the CJEU has held that asymmetric EU jurisdiction clauses are only valid under EU law if they designate with sufficient precision the alternative jurisdictions in which proceedings may be brought.

Asymmetric EU jurisdiction clauses usually require one party to a contract (often a borrower or debt issuer) to refer disputes to a designated EU Member State court but give the other parties (usually the lenders or dealers) the choice to bring proceedings in any competent court. They have long been a preferred option for finance parties in some types of transaction, but their enforceability within the EU has been uncertain. This decision may change the approach that finance parties take to drafting and negotiating these clauses, making them a less popular option.