Much favoured in finance contracts, asymmetric clauses have been confirmed as valid under EU law: Richard Marshall & Harriet Campbell consider the impact for contracting parties
- The Court of Justice of the European Union has confirmed that asymmetric jurisdiction clauses favouring EU or Lugano courts are valid and enforceable under EU law.
- Clauses providing for the possible jurisdiction of the English courts may be interpreted as unenforceable.
In a pivotal judgment on jurisdiction, the Court of Justice of the European Union (CJEU) has ruled that asymmetric clauses are valid and enforceable under EU law. While this resolves doubts about their validity within the EU, the risk of unenforceability remains if the clause designates courts outside of the EU or Lugano Convention countries (namely, the EU, Switzerland, Norway and Iceland).
Asymmetric clauses are much favoured in finance contracts. Typically, they allow the lender to sue in any jurisdiction but restrict the borrower to one jurisdiction. However, the downside of such clauses, until now, has been the risk
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