Amongst the variety of clauses in commercial agreements which define the forum for disputes, the asymmetric jurisdiction clause (also called the one-way jurisdiction clause), has found favour with an increasing number of lenders in finance agreements. Asymmetric jurisdiction clauses require one party to submit a dispute arising from an agreement to a particular court or to a particular set of arbitral procedures while allowing the counterparty the flexibility to commence legal proceedings in the venue of its choice. This diverges from the more classic approach of mutuality of obligations provided by the exclusive-jurisdiction or non-exclusive jurisdiction clauses where both parties are afforded the same options or subjected to the same constraints when it comes to choosing a forum for their disputes.

The widespread use of asymmetric jurisdiction clauses has strong underpinnings; the party who bears the primary commercial risk under the contract is given the benefit of the option. This rationale is glaringly relevant in financial transactions. A creditor can take legal action against the debtor in a chosen court, such as the debtor's jurisdiction of incorporation, but retains the flexibility to litigate where the assets of the borrowers are located at the time a dispute arises, subject to the chosen forum accepting jurisdiction. The flexibility afforded by such clauses reduces legal risk by minimising the impact that the debtor's obligations may be unenforceable in a particular forum.

Asymmetric jurisdiction clauses have become boilerplate for financial institutions and are found in a large number of loan documents, including the LMA facility agreements.

The enforceability of asymmetric jurisdiction clause has recently been challenged by French courts, firstly in Mme X v Banque Privée Edmond de Rothschild1 and subsequently in Danne v Credit Suisse2. While this issue has not be brought to the courts of Mauritius, Popplewell J in Mauritius Commercial Bank Ltd v Hestia Holdings Ltd & Sujana Universal Industries noted that it was likely that the asymmetric jurisdiction clause would be upheld under Mauritian law.

Rothschild decision

The French Cour de cassation raised concerns on the enforceability of asymmetric jurisdiction clauses in its decision in Rothschild when it held such a clause in a loan agreement as void.

The Rothschild decision was based on a provision of Article 23 of the Brussels Regulations applicable to the member states of the European Community. The French court ruled that the jurisdiction clause was potestative3 and, thus void and unenforceable.

Stakeholders, including French lawyers, have widely criticised the Rothschild decision; in addition to the various criticisms levelled at the French court, the decision also undermines the principle of certainty of result which is highly valued by commercial parties, particularly financiers. Irrespective of those criticisms, the principle of potestativité used as the ratio decidendi stems from the French court's application of the Brussels Regulations to French laws. The decision is not a test of the enforceability of the asymmetric jurisdiction clause in light of Article 1174 of the French civil code.4 Such a test would have carried significant weight given the propensity of the Mauritian courts to follow the decisions of the French courts in matters relating to the interpretation of the civil code.

Despite criticism, in March 2015, the French Cour de cassation cast further doubt on the enforceability and effectiveness of asymmetric jurisdiction clauses in the decision of Danne v Credit Suisse. It considered the validity of the asymmetric jurisdiction clause under the Lugano Convention. The relevant article of the Lugano Convention is materially identical to the provision of the Brussels Regulations considered in Rothschild. Unlike Rothschild, however, the French court did not refer to the potestativité principle; it emphasised the lack of objective criteria setting out the basis for determining any alternative jurisdiction. In addition the French court considered the unbalanced nature of the asymmetric jurisdiction clause to be in conflict with the aims of the Lugano Convention.

Party autonomy rather than equal access to justice

Closer to home, Rothschild was followed by a decision of the English High Court in Mauritius Commercial Bank Ltd v Hestia Holdings Ltd & Sujana Universal Industries.
The parties entered into a Mauritian law-governed loan agreement which was subsequently restructured pursuant to an amended and restated agreement governed under the laws of England. In addition to affirming the contracting parties' choice of amending the governing law of the asymmetric jurisdiction clause from Mauritian to English law, the English High Court upheld the enforceability of the asymmetric jurisdiction clause. Popplewell J took the pains to stress that "such unilaterally non-exclusive clauses are ubiquitous in the financial markets".

Popplewell J further noted that the Rothschild decision was "controversial and has been subjected to criticism by commentators, both domestically and in the context of Article 23 which requires an autonomous interpretation"; it may well be that Rothschild should not be considered as good source of judicial interpretation.

Anyone wishing to infer that an asymmetric jurisdictional clause goes against the principles of equal access to justice, Popplewell J commented that "that is the contractual bargain to which the court should give effect".

Until the European Court of Justice sheds light on the use of asymmetric jurisdiction clauses from an EU law perspective, and in particular where there is a French nexus, parties must assess the advantages of such clauses and remain exposed to the risk of these being found to be void and unenforceable.

While the enforceability of the asymmetric jurisdiction clause was examined within the parameters of English law, Popplewell J attempted to shed some light on the issue from a Mauritian law perspective and concluded, as an obiter, that notwithstanding the Rothschild decision, there was a good arguable case that under Mauritian law an asymmetric jurisdiction clause would be treated as valid and enforceable.

Fortunately, it may result that a debate on the application of the potestativité principle of the Mauritian civil code is largely academic. An application of Article 1174 of the Mauritian civil code to an asymmetric jurisdiction clause would not be framed within the context of, and governed by, the Brussels Regulations. However, lenders should remain cautious where asymmetric jurisdictions clauses are included in Mauritian law agreements. The reality is that such clauses remain untested in a Mauritian context. In any event they should no longer be considered boilerplate and lenders should assess, on a case-by-case basis, the perceived advantages of the asymmetric jurisdiction clause against the risk that it may be found void and unenforceable.

The model asymmetric jurisdiction clause in an English law LMA Single Term Facility Agreement:


  1. The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement)] (a "Dispute").
  2. The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This Clause is for the benefit of the Finance Parties only.  As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.


1 Cass. 1e civ., 26 sept. 2012, n° 11-26.022, bull. civ. n° 983, SA Banque privée Edmond de Rothschild Europe c/ Trontin, épouse Banos

2 Cass. 1e civ., 25 mars 2015, n° 13.27.264, bull. civ. n° 415.

3 A 'potestative' provision is one which makes the fulfillment of the agreement dependent upon an event which one of the contracting parties has the power to make happen or to prevent from happening. Such provisions do not typically relate to issues emanating from jurisdiction but rather, derives from the law relating to conditions precedent.

4 Article 1174 of the French civil code has been replicated in the Mauritian civil code.

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