Asymmetric jurisdiction clauses, which allow one party to sue in any jurisdiction whilst restricting the other party to only one jurisdiction, have been common in commercial contracts, and particularly financial agreements, since the 1960s. In 2012, however, the validity of such clauses under EU law was called into question when the French Cour de Cassation appeared to hold that they were ineffective under the Brussels I Regulation (the Recast Regulation).
In the recent case of Commerzbank Aktiengesellschaft v Liquimar Tankers Management Inc and another  EWHC 161 (Comm) the English courts considered the validity of asymmetric jurisdiction clauses for the first time, holding that the jurisdiction clause was, in that case, effective and conferred exclusive jurisdiction on the English courts.
The case concerned an asymmetric jurisdiction clause in a loan agreement between the Claimant, a German bank (Commerzbank), and the Defendant, a shipping company (Liquimar). The clause required Liquimar to commence proceedings in England only, whilst giving Commerzbank the option to bring proceedings in any jurisdiction.
Following a default under the loan agreement, Liquimar issued proceedings in Greece. Commerzbank subsequently issued a claim in the English Commercial Court relating to the same cause of action. Liquimar applied to have the English proceedings stayed, relying on Article 29 of the Recast Regulation, which provides that where proceedings involving the same cause of action are brought in the courts of two different Member States, any court other than the first seised shall stay its proceedings until such time as the jurisdiction of the court first seised is established.
Commerzbank argued that the asymmetric jurisdiction clause was an exclusive jurisdiction clause for the purposes of Articles 25 and 31(2) of the Recast Regulation, which provide that:
Previously it was unclear whether an asymmetric jurisdiction clause would be regarded as an exclusive jurisdiction clause for the purposes of Articles 25 and 31(2) of the Recast Regulation, given that one party still has a choice of jurisdiction.
In Commerzbank v Liquimar, the English Commercial Court held that:
In his judgment, Cranston J considered Recital 22 of the Recast Regulation, which notes that one of the aims of the Regulation was to ‘enhance the effectiveness of exclusive choice-of-court agreements and to avoid abusive litigation tactics’. He concluded that such aims would only be achieved if asymmetric jurisdiction clauses were treated as exclusive for the purposes of Articles 25 and 31(2) of the Regulation.
The decision will be welcomed by practitioners and commercial parties, in particular lenders who typically benefit from asymmetric clauses. Nevertheless, the question of whether these clauses are exclusive jurisdiction clauses for the purposes of the Recast Regulation ultimately lies with the Court of Justice of the European Union, and until such time as the matter is considered by Europe’s highest court, it remains possible that courts in other Member States will reach a different conclusion.