The Lastre judgment
In February 2025, the EU Court of Justice (the “ECJ“) gave its judgment – known as the “Lastre judgment” – on prejudicial questions referred to it by the French Cour de Cassation in a jurisdiction dispute between a French and an Italian party. The matter in dispute was an asymmetric jurisdiction clause. Under such a clause, one of the contracting parties is restricted to bringing an action before only one competent court, while the other party is free to also initiate proceedings elsewhere. This is a customary type of clause in loan agreements and security documents. An asymmetric jurisdiction clause is frequently worded in such a way that it is the lender or security holder who is free to initiate proceedings elsewhere.
In Lastre, the ECJ held that such an asymmetric jurisdiction clause is valid if it is sufficiently precise in designating courts in several EU Member States or in States that are parties to the Lugano Convention for the settlement of disputes between the parties. In that situation, it satisfies the degree of precision required by Article 25 of the Brussels I-bis Regulation.
The ECJ went on to rule that clauses that also designate courts in states that are neither members of the EU nor bound by the Lugano Convention (“third countries“) are contrary to EU law due to their inconsistency with the objectives of foreseeability, transparency and legal certainty. This is because EU law does not make it possible to designate the courts which have jurisdiction, as that designation is, where appropriate, the result of the application of the rules of private international law of third countries.
Uncertainty
The judgment has caused quite a stir, as some fundamental questions remain unanswered. First, it remains unclear whether an invalid ‘asymmetric element’ of the jurisdiction clause – meaning that only one of the parties can also bring proceedings before another court – also affects the validity of the ‘symmetric’ element, as a result of which the agreement might be invalid in its entirety under Article 25 of the Brussels I-bis Regulation. The ECJ ruled that a jurisdiction clause that, for the symmetric element, exclusively designates an EU court and, for the asymmetric element, designates other courts, is valid in so far as it:
- designates “other courts” that are courts in States that are EU Members or parties to the Lugano Convention;
- identifies objective factors that make it possible to ascertain the parties’ agreed choice of court; and
- is not contrary to Article 25(4) of the Brussels I-bis Regulation (which refers to protective Articles 15, 19 and 23 of Brussels I-bis for policyholders, consumers and employees).
The use of the words “in so far as” is problematic. Such wording does not indicate whether the agreement conferring jurisdiction would be invalid in its entirety if the three requirements are not satisfied, or whether only the imprecise and ‘third country’ elements in the asymmetric part of the agreement would be invalid.
In addition, it remains to be seen whether an agreement conferring jurisdiction that designates a court from a third country would be invalid by definition, even if it is fully symmetric and exclusive. This could be at issue, for example, if the agreement strips an EU Member State court of the jurisdiction conferred on it by the Brussels I-bis Regulation.
Lastly, the ECJ left it up to the French court to answer the question whether the asymmetric jurisdiction clause in this case was sufficiently precise. The party in whose favour the asymmetric jurisdiction clause was drawn up could opt for “another competent court in Italy or elsewhere“. The French Cour de Cassation ruled that this clause satisfied the requirements of Article 25 of the Brussels I-bis Regulation, as the relationship between the contracting parties was not tied to any third countries, which is why its wording could only refer to competent courts of States that are EU Members or parties to the Lugano Convention. It is doubtful whether such broad wording meets the requirement of precision that enables a court in an EU Member State to accept objective jurisdiction.
Opinions and qualifications
In the banking & finance practice, legal opinions are issued on matters such as the validity and enforceability of agreements conferring jurisdiction. The uncertainties ensuing from the Lastre judgment regarding the validity of certain asymmetric agreements conferring jurisdiction thus affect legal opinions. After all, the opinions will have to include qualifications specifying the legal uncertainty created by Lastre. In an article published in Tijdschrift voor Contracteren on 23 February, titled “Rechtsonzekerheid na SIL/Agora: asymmetrische forumkeuzes in de contractspraktijk en legal opinions”, we set out the key points of uncertainty and propose ways to draft the required qualifications.
Recommendations
In conclusion, parties would do well to carefully formulate asymmetric agreements conferring jurisdiction. To prevent jurisdiction disputes, they should preferably only designate courts of EU Member States or States that are parties to the Lugano Convention, with due consideration of the three aforementioned requirements from the Lastre judgment.
If parties nevertheless wish to designate a non-Member State court in an asymmetric agreement conferring jurisdiction that meets the Lastre requirements in all other respects, they should be aware of the risk – albeit only a theoretical risk in most situations – that a Member State or contracting State court is seised elsewhere, sets aside the choice of the non-Member State court and accepts jurisdiction. This would obviously not affect the jurisdiction of the third-country court under the asymmetric jurisdiction clause, as this court would not apply the Brussels I-bis Regulation when assessing the clause. In practice, legal opinions to be issued will usually need to include a qualifications regarding asymmetric jurisdiction clauses.
Please contact Paul Sluijter or Jeroen Vossenberg for more information or advice on asymmetric jurisdiction clauses and how to best deal with such clauses in legal opinions.