The end of the road for ‘one-way’ jurisdiction and arbitration clauses?

Following the 2008 financial crisis, there has been greater focus by commercial parties on dispute resolution provisions in transaction documents. At the drafting stage, where (and how) parties’ disputes are to be determined has become a contentious issue on many deals.

There has also been an increase in jurisdiction battles. In this article, Allen & Overy discusses how market practice has developed in response to two 2012 decisions on ‘one-way’ jurisdiction and arbitration clauses — one of the French Supreme Court and the other of the Moscow Arbitzah Court (the highest commercial court in Russia). The French and Russian decisions have caused many to reassess their approach to forum selection in commercial contracts. This article also assesses what impact a recent 2014 decision of the Luxembourg court (which conflicts with the French decision) may have on current approach.

On 26 September 2012, the French Supreme Court invalidated a ‘one-way’ (also referred to as a ‘hybrid’ or ‘asymmetric’) jurisdiction clause in a loan agreement. A ‘one-way’ or hybrid jurisdiction clause requires one party to bring proceedings only in a named court but allows the other party (usually the party with the greater exposure) to bring proceedings in the named court, or any other court of competent jurisdiction. The French court’s decision in Mme X v Rothschild was significant because it was based on a provision in a European instrument (article 23 of the Brussels Regulation), which is applied by the courts of all 29 member states. The French court ruled that the clause was ‘potestative’ and, accordingly, void under article 23…

Click on the link below to read the rest of the Allen & Overy briefing.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Analysis from The Lawyer

  • Panel reviews

    Panel reviews 2014: The chosen ones

    Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all

  • training

    Accutrainee: Revolution postponed

    At the time of its launch Accutrainee was described as a revolutionary change to the training model. Has it proved to be so? Not really.

View more analysis from The Lawyer

Overview

One Bishops Square
London
E1 6AD
UK
http://www.allenovery.com

Turnover (£m): 1,234.30
No. of lawyers: 2,194 (UK 200)
Jurisdiction: UK
No. of offices: 11
No. of qualified lawyers: 273 (International 50)