CJEU on Asymmetrical Jurisdiction Clauses

Why companies should review their Jurisdiction Clauses now

Jurisdiction clauses determine which court will decide on a legal dispute. Such clauses are frequently overlooked in contracts and in general terms and conditions (“GTCs”) even though they may be decisive for success or failure in a dispute.

A jurisdiction clause only takes effect if it is valid. If found invalid, it may force one of the contracting parties to litigate before a different court than originally intended. This is even more problematic in cross-border contracts, as foreign courts may assume jurisdiction. Moreover, unlike the German Code of Civil Procedure, the Regulation (EU) No. 1215/2012 (“Brussels Ia Regulation”), which commonly applies to cross-border disputes, does not provide a referral mechanism.

In a recently published decision (ruling of 27 February 2025 - C-537/23), the Court of Justice of the European Union (“CJEU”) clarified the validity requirements for so-called asymmetrical jurisdiction clauses. Such clauses typically designate one court as having exclusive jurisdiction but also allow one party to bring proceedings before any other competent court. They are common in commercial contracts, including GTCs.

Relevant Provision in International Cases: Art. 25 (1) Brussels Ia Regulation

Where a dispute involves cross-border elements and the parties have agreed that a court or the courts of an EU Member State are to have jurisdiction to settle any of their disputes, Art. 25 (1) of the Brussels Ia Regulation governs the validity of asymmetrical jurisdiction clauses instead of German national law. This applies, for example, where a supply contract between a German company and its Italian supplier stipulates Stuttgart as the place of jurisdiction. Importantly, the CJEU interprets the required cross-border elements very broadly, resulting in a wide application of Art. 25 (1) of the Brussels Ia Regulation.¹ 

German Case Law on Asymmetrical Jurisdiction Clauses

The Federal Court of Justice in Germany has deemed asymmetrical jurisdiction clauses in individually negotiated agreements valid.² The Higher Regional Court of Munich recently confirmed that asymmetrical jurisdiction clauses are generally valid under German GTC law. However, clauses that do not provide any criteria for determining the competent court and instead allow one party to select the competent court unilaterally and arbitrarily are invalid in terms of German GTC law.³

The Facts of the CJEU Ruling 

The CJEU’s ruling concerned a supply contract between a French and an Italian company ("SIL") that included the following asymmetrical jurisdiction clause: 

"The Court of Brescia [(Italy)] will have jurisdiction over any dispute arising from or related to this contract. (SIL) reserves the right to bring proceedings against the purchaser before any other competent court in Italy or elsewhere." 

The Key Aspects of the CJEU Ruling

The CJEU clarified that asymmetrical jurisdiction clauses are a matter of EU law and must satisfy the requirements of Art. 25 (1) of the Brussels Ia Regulation. These requirements must be interpreted autonomously, i.e., independently of the national law of an EU Member State. Accordingly, the CJEU adopted a narrow interpretation of the requirement in Art. 25 (1) of the Brussels Ia Regulation that the jurisdiction clause must not be null and void as to its substantive validity under the law of the EU Member State whose courts are designated. Consequently: German GTC law does not apply to the content of the jurisdiction clause, even if it designates German courts.

In line with the German courts, the CJEU ruled that asymmetrical jurisdiction clauses are generally valid under Art. 25 (1) of the Brussels Ia Regulation. However, according to the CJEU’s ruling, an asymmetrical jurisdiction clause is only valid if it

• identifies objective and precise factors to determine jurisdiction (principle of precision),
• does not violate the exceptions provided for in the Brussels Ia Regulation regarding insurance, consumer and labour matters (cf. Art. 15, 19, 23 or 24 of the Brussels Ia Regulation) (principle of balance) and
• designates only courts of EU Member States or states that are party to the Lugano II Convention.

In particular, the CJEU’s ruling that only courts of EU Member States or states that are party to the Lugano II Convention⁴ may be designated posed a problem for the jurisdiction clause in question, as it reads "any other competent court ... elsewhere". 

If an asymmetrical jurisdiction clause can be interpreted to also encompass courts outside both the EU and Lugano II Convention, that clause is deemed invalid. 

Impact

The decision carries important implications for commercial contracts, as many jurisdiction clauses drafted in commercial contracts must comply with Art. 25 (1) of the Brussels Ia Regulation. In particular, the CJEU’s focus on limiting unilateral jurisdictional choices to courts within the EU Member States or states that are party to the Lugano II Convention represents a significant restriction that must be considered when drafting jurisdiction clauses. 

Companies should regard the decision as an opportunity to review jurisdiction clauses in their contracts and GTCs. Furthermore, they should also consider alternative dispute resolution mechanisms (such as arbitration), either as an alternative or in addition to traditional state-court proceedings.

[1] CJEU, ruling of 29 July 2024 - C-774/22, EuZW 2024, 967, 968 - FTI Touristik; CJEU, ruling of 8 February 2024 - C-566/22, EuZW 2024, 262, 263 f. - Inkreal.
[2] Federal Court of Justice, ruling of 15 June 2021 - II ZB 35/20, NZG 2021, 1083, 1087 f.
[3] Higher Regional Court of Munich, ruling of 12 December 2024 - 19 U 1449/24e, BKR 2025, 417, 419; see also Higher Regional Court of Hamm, judgement of 20 September 2005 - 20 September 2005 - 19 U 40/05, BeckRS 2005, 11962.
[4] In addition to the EU Member States, the Lugano II Convention states are Switzerland, Iceland and Norway.