UK: Rebalancing The Law On Asymmetric Jurisdiction Clauses

Last Updated: 20 April 2017
Article by Jumana Rahman and Hayley M. Pizzey

Commerzbank Aktiengesellschaft v Liquimar Tankers Management Inc [2017] EWHC 161 (Comm)


The English High Court has held that asymmetric jurisdiction clauses are exclusive jurisdiction clauses for the purposes of the Recast Brussels Regulation1 (the Recast Regulation).

Where claims are issued by disputing parties in the courts of two or more EU Member States, the usual court first seized rule applies. This means that all courts (other than the court in which the first claim was issued) must stay their proceedings until the court where the proceedings first in time were brought has determined whether it has jurisdiction. However, the Recast Regulation provides an exception to this rule. If the parties have agreed in writing that a particular Member State's courts are to have exclusive jurisdiction over the dispute then the court first seized rule does not apply. Instead the court upon which the parties conferred exclusive jurisdiction shall first determine whether it has jurisdiction, and all other courts shall stay any proceedings before them pending that determination.

Following the ruling in Liquimar Tankers,2 it is now clear that the English courts also consider that asymmetric jurisdiction clauses displace the usual court first seized rule.

What is an asymmetric jurisdiction clause?

An asymmetric jurisdiction clause provides that, after a dispute has arisen, one party may elect between multiple jurisdictional forums in which to bring their claim while restricting the other party to commencing proceedings in only one jurisdiction.

Clients in strong negotiating positions (such as lenders) often wish to include an asymmetric jurisdiction clause. As the lender is the party with the greater exposure, such a clause increases the prospect of debt recovery by enabling the lender to bring proceedings in the forum with the best prospects for enforcement, while protecting the lender by ensuring that a borrower cannot forum shop.

However, some jurisdictions, such as Russia, consider that these clauses create uncertainty and have questioned their validity, whereas others, such as England and Spain, have upheld the validity of such clauses.

In view of the differing treatment such clauses have received in Member State courts,3 the Liquimar Tankers case provides welcome clarification of how they operate as a matter of EU law.

Facts of Liquimar Tankers

Commerzbank Aktiengesellschaft (the Bank) claimed that it was due over US$6 million by Liquimar Tankers Management (the Guarantor) under a guarantee agreement (the Guarantee). The Guarantee provided that the Bank could elect to bring proceedings against the Guarantor in "any other court of competent jurisdiction",4 but the Guarantor could only bring claims in the English courts. On 9 June 2015, the Bank notified the Guarantor that it intended to commence proceedings in England if the Guarantor did not propose a settlement for the alleged debt by 16 June 2015. Instead the Guarantor issued two sets of proceedings against the Bank in Greece in 2015 (the Greek Proceedings). In 2016, the Bank issued proceedings against the Guarantor in England (the English Proceedings). The English Proceedings substantively involved "the same cause of action"5 as the Greek Proceedings.

The Decision

In a clear affirmation of the principles of party autonomy and freedom to contract, the High Court held that it would be unreasonable to allow the Guarantor to progress proceedings anywhere other than England.

  • First, the Court emphasised that the usual rule of the court first seized was "without prejudice to Article 31(2)"of the Recast Regulations.6 As a result the rule falls away when there is an exclusive jurisdiction clause between the parties, and it is the court with exclusive jurisdiction that determines its own position before any other proceedings can continue.
  • Secondly, the Court held the asymmetric jurisdiction clause was an exclusive jurisdiction clause. The Guarantor had argued that such clauses are the "antithesis"7 of exclusive jurisdiction clauses because they fail to create a single, exclusive jurisdiction for the determination of disputes. The Court disagreed and applied a wide interpretation of an 'exclusive jurisdiction' clause.
  • Lastly, the Court rejected the Guarantor's argument that the proceedings should be stayed for case management reasons in light of the advanced stage of the Greek Proceedings. The English Court considered itself best placed to decide the particular questions of law arising in the English Proceedings.


This judgment brings useful confirmation of how the asymmetric jurisdiction clauses operate under the Recast Regulation. Going forward it seems that it will be difficult to challenge clear and unambiguous asymmetric jurisdiction clauses and their effect for the purposes of the Recast Regulation in the English courts.

However, it may be a different story in other courts. Before agreeing to an asymmetric jurisdiction clause parties may therefore wish to identify which country or countries would be likely to have jurisdiction under that clause, and ascertain the stance that jurisdiction is likely to take in relation to such a clause.

This post was prepared with the assistance of Laura Elliot in the London office of Latham & Watkins.


1 Regulation 1215/2012

2 Commerzbank Aktiengesellschaft and Liquimar Tankers Management Inc v. Commerzbank Aktiengesellschaft and others [2017] EWHC 161 (Comm)

3 See X v. Banque Privée Edmond de Rothschild Europe, Cass. Civ. (1ère) (French Cour de cassation); see Apple Sales International v. eBizcuss: Cass. 1ere Civ, 7 October 2015, 14-16.898.

4 [2017] EWHC 161 (Comm), at para. 9

5 Article 29 Regulation 1215/2012

6 Article 29(1) Regulation 1215/2012

7 [2017] EWHC 161 (Comm), at para. 57

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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