Dispute resolution clauses: asymmetric clauses (again) and exclusive jurisdiction clauses

French Supreme Court upholds an asymmetric jurisdiction clause

The refusal of the French Supreme Court (Cour de cassation) to enforce an asymmetric jurisdiction clause in its decision against Banque Privée Edmond de Rothschild in 2012, and again in March 2015 in its decision against Credit Suisse, caused consternation. Such clauses are common in international contracts, especially in financial agreements. Although the decisions are not binding in other EU states, until the CJEU rules on the issue, the French Courts' interpretation of the Brussels Regulation and Lugano Convention has created uncertainty. However, the inference that could be gleaned from the second decision was that the French courts were not wholly opposed to asymmetric clauses. It was implied that if the clause contained objective criteria that would enable the party without the option of choosing between forums to identify the alternative forums in which it might be sued, the clause would satisfy the requirements of certainty and foreseeability. See our earlier article for more detail. This inference has now been confirmed in a further decision by the French Supreme Court.¹

A French company, which had entered into a contract containing an asymmetrical jurisdiction clause with an Irish company, sought to bring a claim against the Irish company in the Paris Commercial Court in breach of that clause. The clause provided that the French company could only bring a claim in the Irish courts, but permitted the Irish company to bring a claim against the French company in either Ireland, the jurisdiction where the French company had its registered office, or in the courts of any country where it had suffered a loss caused by the French company.

The French Supreme Court held that as the French company (i.e. the party that was not free to choose jurisdiction under the clause) could objectively anticipate the alternative forums in which it could be sued, the clause was valid as it satisfied the certainty and foreseeability requirements of the Brussels and Lugano regimes.

Although the decision has clarified the French position on asymmetric clauses, the clause in question was tighter than the usual asymmetric clause found in banking documents. It is still wise to be cautious when drafting asymmetric clauses if dealing with a French counterparty.

English courts maintain robust approach to exclusive jurisdiction clauses

The English courts again displayed their preference for giving effect to the contractual agreement regarding jurisdiction between the parties in the absence of strong reasons to deviate from that contractual position.²

Ms Jong sought to join HSBC (Monaco) to proceedings she had brought in England against two HSBC companies located in England and Wales. Although the proceedings against the two English companies were related to her claim against HSBC (Monaco), the latter claim fell under a contract between Ms Jong and HSBC (Monaco) that contained an exclusive jurisdiction clause in favour of the courts of Monaco.

Ms Jong argued that the risk of inconsistent judgments and the cost of parallel proceedings outweighed HSBC (Monaco)'s contractual right to be sued only in Monaco. As Monaco is not an EU  member state, the courts applied English law to determining the question of whether the English courts were the most appropriate forum. Ms Jong therefore had to show strong reasons for suing HSBC (Monaco) in England and not in Monaco.

The judge had to weigh the competing factors of Ms Jong's right to sue the English companies in England and HSBC (Monaco)'s contractual right to be sued only in Monaco. The judge took into account all the connecting factors, including that all the relevant trades occurred in Monaco and that if the claims were all tried in England, it was highly likely that the liability of HSBC (Monaco) would be tried as a preliminary issue because its liability was central to the case against the two English companies.

The judge, and the Court of Appeal, did not regard the exclusive jurisdiction clause as trumping all other considerations, but it was a powerful consideration which, when coupled with the fact that all the trades occurred in Monaco, outweighed the other connecting factors.

_Notes

_{Cour de cassation, chamber civile 1, 7 October 2015, 14-16.898.
Jong -v- HSBC Private Bank (Monaco) SA [2015] EWCA Civ 1057.}