CJEU Clarifies Validity Of Asymmetric Clauses In Finance Transactions

The recent CJEU ruling in Società Italiana Lastre SpA (SIL) v Agora SARL brings both clarity and uncertainty to asymmetric jurisdiction clauses in finance documents.

The CJEU's decision provides long-awaited legal certainty for such jurisdiction clauses designating the courts of EU member states or Lugano state courts, confirming their validity under Article 25 of Regulation (EU) No 1215/2012 (Brussels Recast). However, the ruling leaves questions about the enforceability of asymmetric jurisdiction clauses that allow one party to bring proceedings in any competent court, including those outside the EU. Asymmetric jurisdiction clauses allowing the finance parties to choose any competent court to bring proceedings while restricting the obligors to a designated jurisdiction/court are standard in finance documents, particularly in syndicated loan transactions.