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Asymmetric jurisdiction clauses are a common feature of finance transactions. In general terms, they allow one party, usually the lender, to bring proceedings against the other party in any jurisdiction or in multiple other jurisdictions but restrict the other party, usually the borrower, to bring proceedings in only one jurisdiction. The enforceability of asymmetric jurisdiction clauses in some EU jurisdictions, most notably France, was uncertain for several years.
In February 2025, the Court of Justice of the European Union (CJEU) provided clarity in Società Italiana Lastre SpA (SIL) v Agora SARL (Agora) by confirming that asymmetric jurisdiction clauses are, in principle, valid under Regulation (EU) 1215/ 2012 (the Recast Brussels Regulation). This was in the context of a referral from the French Supreme Court (Cour de cassation). However, the CJEU’s ruling applies only where the relevant clause designates the courts of EU Member States, or parties to the Lugano Convention.
In September 2025, the French Supreme Court (Cour de cassation) applied Lastre, holding that an asymmetric jurisdiction clause permitting one party to bring proceedings in “another competent court in Italy or elsewhere” was valid under the Recast Brussels Regulation, as there was no objective connection to any non-EU Member State or a non-Lugano Convention jurisdiction. This was a pragmatic decision on the part of the French Supreme Court, but the position remains unclear, particularly for common asymmetric jurisdiction clauses in finance transactions that involve third-party jurisdictions and allow one party to bring proceedings in “any competent court”.
Background
The dispute between SIL (incorporated in Italy) and Agora (incorporated in France) related to the supply of panelling. The supply contract included an asymmetric jurisdiction clause conferring jurisdiction on the courts of “Brescia (Italy)” but reserving the right for SIL to bring proceedings against Agora “before another competent court in Italy or elsewhere”.
After a dispute arose, Agora brought proceedings against SIL in France. SIL contested the French court’s jurisdiction, arguing that the proceedings were in breach of the jurisdiction clause in the supply contract. The lower French courts rejected SIL’s challenge, holding (in line with previous French jurisprudence) that the jurisdiction clause was unlawful because it gave SIL a wider choice of jurisdiction than it gave Agora.
SIL then appealed to the French Supreme Court, which sought a preliminary ruling from the CJEU on three questions:
CJEU Decision
In answering the first question, the CJEU ruled that the validity of an asymmetric jurisdiction clause must be determined by the autonomous rules set out in Article 25(1) of the Recast Brussels Regulation, rather than the applicable EU Member State law. The CJEU placed significant weight on the objectives of foreseeability, transparency and legal certainty set out in the Recast Brussels Regulation, which establish a “requirement for precision”. However, the applicable law of the Member State remained relevant for assessing the general causes of invalidity of a contract such as error, deceit, violence, fraud or incapacity (which are not governed by the Recast Brussels Regulation).
On the second question, the CJEU ruled that asymmetric jurisdiction clauses are, in principle, valid under Article 25 of the Recast Brussels Regulation. The CJEU accepted that the first sentence of Article 25(1) referred to the courts “of a Member State” but said that this cannot be interpreted as meaning that the parties must only designate the courts of a single Member State. The CJEU commented that imposing such a limit would contradict parties’ freedom of choice which underpins the Recast Brussels Regulation. The CJEU also placed weight on other provisions of the Recast Brussels Regulation that allow parties to bring proceedings before the courts of several member states in specific situations.
The CJEU therefore confirmed that an asymmetric jurisdiction clause will be valid under the Recast Brussels Regulation, provided it:
(i) designates the courts of one or several EU Member States or parties to the Lugano Convention;
(ii) identifies objective factors sufficiently precise to enable the court seised to ascertain whether it has jurisdiction; and
(iii) is not contrary to other specific provisions in the Recast Brussels Regulation.
The CJEU’s first proviso above is the most significant. Essentially, the CJEU confined its ruling to clauses which limit competent courts to EU Member States or parties to the Lugano Convention (which includes the EU, Denmark, Iceland, Switzerland and Norway). The CJEU held that if an asymmetric jurisdiction clause designates one or several courts of non-EU, non-Lugano Convention Member States, it would be contrary to the Recast Brussels Regulation because it would “not be consistent with its objectives of foreseeability, transparency and legal certainty”. The position, however, remains unclear for asymmetric jurisdiction clauses that involve third-party jurisdictions and allow one party to bring proceedings in “any competent court”.
There is also uncertainty in relation to the CJEU’s second proviso above, which requires an asymmetric jurisdiction clause to identify “objective factors” that are “sufficiently precise”. The CJEU did not explain this requirement in its decision.
Because the CJEU ruled that the Recast Brussels Regulation applies when determining the validity of asymmetric jurisdiction clauses, it did not need to answer the third question.
LMA Guidance
In response to Lastre, in early September 2025, the Loan Market Association (LMA) updated its standard form German Law Investment Grade and German Law Real Estate Finance Facility Agreements to include a modified asymmetric jurisdiction clause (which, according to the LMA, “closely follows that used by the CJEU in its judgment”). While such LMA precedents are directly impacted by the Lastre decision, the LMA has also developed a similar modified asymmetric jurisdiction clause for its English law documentation. However, the LMA has not yet published its revised English law documentation, as it notes (in member communications) that the “issues are more nuanced” when English law is the stipulated governing law. The LMA has instead confirmed that it is preparing a consolidated jurisdiction guidance note, which will explore the nuanced issues and include a modified asymmetric jurisdiction clause as an option for English law contracts.
Return to the French Courts
On 17 September 2025, the French Supreme Court delivered its judgment applying the CJEU’s ruling. The French Supreme Court overturned the lower French courts’ rulings and upheld the jurisdiction clause under the Recast Brussels Regulation confirming that the French courts lack jurisdiction to hear the claim brought by Agora in France, in breach of that clause. Although the clause permitted SIL to bring proceedings “before another competent court in Italy or elsewhere”, the French Supreme Court interpreted this wording – despite its apparent breadth – as being limited to courts within EU Member States or parties to the Lugano Convention. The French Supreme Court interpreted the CJEU’s ruling in Lastre as leaving it up to national courts to interpret jurisdiction clauses referring to “another competent court … elsewhere” in a manner that gives practical effect to the parties’ freedom of choice. Therefore, as there was no objective connection to a third country jurisdiction, the French Supreme Court concluded that the clause could and should be confined to jurisdictions within the EU or the Lugano framework, therefore complying with the Lastre ruling.
Comment
The CJEU’s decision provides clarity on the validity of asymmetric jurisdiction clauses within the EU, which is determined under the Recast Brussels Regulation. Yet it also raises questions regarding the application of asymmetric jurisdiction clauses which do not designate the courts of an EU Member State or parties to the Lugano Convention. Such clauses are common in finance transactions, and there has been significant interest in the CJEU’s ruling since February 2025.
Although the French Supreme Court interpreted the relevant asymmetric jurisdiction clause narrowly to ensure its validity under the Recast Brussels Regulation, questions remain. Other EU Member State courts may apply the CJEU’s ruling differently, depending on the factual background and specific clause in dispute. For example, where asymmetric jurisdiction clauses directly specify non-EU Member State courts or non-Lugano parties’ courts, or where a case involves objective factors which could enable such a court to have jurisdiction, the approach taken by the French Supreme Court may not be available to other EU Member State courts.
Decisions on asymmetric jurisdiction clauses in finance transactions should therefore be made with careful analysis on a case-by-case basis, depending on the specific transaction, and balancing the desire for flexibility against the current legal uncertainty.
We also await the LMA’s publication of its consolidated jurisdiction guidance note, including details of the “nuanced issues” associated with asymmetric jurisdiction clauses for its English law documentation. Whilst not directly authoritative for the Irish market, the LMA’s positions, views and approaches can carry significant weight in similar Irish legal contexts, and we will be monitoring future developments in this regard with interest.
For further information in relation to this topic, please contact, Sarah Murphy, Partner, Simon Barber, Lawyer (Qualified in New Zealand), Sinéad Hayes, Practice Development Consultant, Elizabeth White, Practice Development Consultant or your usual contact on the Disputes or Finance teams.
