Asymmetric jurisdiction clauses: a clearer landscape — but not yet a settled one
CJEU 27 February 2025, Case C-537/23 (Società Italiana Lastre SpA v Agora SARL) and the entry into force of the Hague Judgments Convention in the UK on 1 July 2025.
Asymmetric jurisdiction clauses — also known as unilateral or one-way clauses — are a staple of international finance documentation. These clauses allow one party to choose a competent court from the jurisdiction of its choice in the event of a dispute, while restricting the other party to the courts of only a specified jurisdiction. They are commonly used in financial contracts, as they allow lenders to initiate proceedings in a jurisdiction where the debtor's assets are located, ensuring easier enforcement. The LMA standard jurisdiction clause has long reflected this structure. In the past eighteen months, two developments have substantially reshaped the legal framework within which these clauses operate. Neither resolves every question. Together, however, they represent the most significant shift in the enforceability landscape for asymmetric clauses in years.
Development one: the CJEU rules in Lastre
On 27 February 2025, in the case Società Italiana Lastre SpA v Agora SARL (Case C-537/23), the Court of Justice of the European Union issued its first ruling on the validity of asymmetric jurisdiction clauses under Article 25 of the Brussels Recast Regulation. The ruling was long-awaited. In the absence of CJEU guidance, national courts — most prominently in France — had repeatedly struck down such clauses on the basis that they were excessively one-sided or lacked sufficient precision. The CJEU ruled that clauses requiring one party to litigate in one court while the other party has a choice of different forums can be valid, but put limitations that need to be carefully assessed in practice.
The Court established three requirements for validity under Article 25. First, the clause must state objective factors that are sufficiently precise to enable the court seised to ascertain whether it has jurisdiction. Second, it must comply with the protective provisions of the Brussels Recast Regulation in respect of insurance, consumer and employment contracts, and must not derogate from the exclusive jurisdiction provisions of Article 24. Third — and most consequential for market practice — the clause must only designate courts of Member States of the EU or of states parties to the Lugano Convention.
That third requirement carries a significant sting. An asymmetric clause granting one party the option to sue before courts worldwide satisfies the precision requirement of Article 25(1) of the Brussels Recast Regulation only to the extent that it designates courts of EU Member States or Lugano II Convention contracting states — currently Switzerland, Iceland and Norway. Such clauses would otherwise be inconsistent with the objectives of foreseeability, transparency and legal certainty.
The practical implication is direct: a clause drafted in the standard LMA form, granting the lender the right to bring proceedings in "any competent court," is valid under Brussels Recast Regulation only insofar as it designates EU or Lugano courts. The CJEU left open how a reference to "competent courts" or "any other court of competent jurisdiction" should be interpreted, so the precise scope of clauses already in circulation remains a matter of construction. What is clear is that any asymmetric clause in an Dutch law finance document that purports to give the lender access to Dutch courts — or courts outside the EU and Lugano perimeter — does not fall within Article 25, and therefore does not benefit from the recognition and enforcement mechanism of the Brussels Recast Regulation in respect of those non-EU court choices.
Development two: the Hague Judgments Convention enters into force in the UK
Post-Brexit, the enforceability of English court judgments in EU Member States had become the central practical concern for parties using asymmetric clauses in English law finance documents. The Hague Convention on Choice of Court Agreements 2005 (Hague 2005) provided no answer: it applies only to exclusive jurisdiction clauses, and asymmetric clauses are not exclusive. This left a wide array of judgments, particularly those not based on exclusive clauses, without a clear and consistent pathway for recognition and enforcement across the EU.
On 1 July 2025, the Hague Judgments Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters entered into force in the United Kingdom (Hague 2019). Hague 2019 convention fills the gap that Hague 2005 left. The Hague 2019 convention covers judgments based on non-exclusive jurisdiction clauses as well as asymmetric jurisdiction clauses — exactly the structure commonly found in English law-governed, LMA-style facility agreements and other finance documents.
The temporal scope matters. The Hague 2019 convention only applies to claims filed in the UK courts from 1 July 2025 onwards. The applicable date is the date proceedings are commenced, not the date the contract was signed. This means that a facility agreement executed years ago, containing an asymmetric clause, will benefit from Hague 2019 if proceedings under it are initiated after 1 July 2025 — a practically important point for existing portfolios.
As of 1 July 2025, the Hague 2019 convention applies between the EU (excluding Denmark), Uruguay, Ukraine and the UK, with Albania, Andorra and Montenegro joining in 2026. The United States has signed but not yet ratified, meaning US-facing transactions remain outside the Hague 2019 convention's scope for now.
Judgments given by courts which take jurisdiction under an asymmetric clause should be enforceable under Hague 2019 despite Brexit and regardless of any uncertainties to which the Lastre decision has given rise — provided all the requirements of Hague 2019 are met.
Putting the two developments together
The interaction between Lastre and Hague 2019 produces a nuanced picture for cross-border finance transactions.
Within the EU. For transactions where the debtor is based in an EU Member State and the dispute is litigated before an EU or Lugano court, Lastre provides clear validation of the asymmetric structure — provided the clause meets the precision requirement and is limited to EU/Lugano courts. The Brussels Recast Regulation enforcement mechanism applies to the resulting judgment in the ordinary way.
English law transactions, EU counterparties. This is the core tension in the market. A standard LMA asymmetric clause giving the lender the right to sue in "any competent court" does not satisfy the Lastre criteria to the extent it designates non-EU courts. However, Hague 2019 separately provides an enforcement pathway for English court judgments obtained pursuant to such clauses in proceedings commenced after 1 July 2025. The two instruments address different issues — Lastre speaks to jurisdiction allocation under Brussels Recast Regulation; Hague 2019 speaks to enforcement — and they do not conflict. The practical upshot is that an English court judgment pursuant to an asymmetric clause is now more reliably enforceable in the EU than it was between 2021 and 2025.
Documentation review. Since the end of the Brexit transition period, finance and industry documents have tended to be drafted with exclusive jurisdiction clauses, intended to allow enforcement under Hague 2005. With Hague 2019 now in force, a return to asymmetric jurisdiction clauses as the norm may follow where parties or assets in contracting states are involved. Practitioners reviewing existing documentation — or negotiating new transactions — should assess whether the clause in use is fit for purpose under the current framework, including whether the formulation of the "any competent court" option should be refined to limit the lender's choice expressly to EU and Lugano courts, so as to remain clearly within Lastre for Brussels Recast Regulation purposes, while retaining reliance on Hague 2019 for English court judgments.
Conclusion
The Lastre ruling ends years of EU-level silence on the validity of asymmetric jurisdiction clauses and provides a workable framework — within the Brussels Recast Regulation perimeter. The entry into force of Hague 2019 in the UK restores a meaningful enforcement pathway for English court judgments in EU Member States where the clause does not meet the Lastre criteria, or where proceedings are brought before English courts rather than EU ones. Together, these two developments substantially reduce — though do not eliminate — the uncertainty that has surrounded asymmetric clauses since Brexit. The clause review that many finance parties deferred while waiting for clarity can no longer be postponed.
This update is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created thereby.