Jean-Sébastien Bazille
Gide Loyrette Nouel, Paris
jean-sebastien.bazille@gide.com

Alia Karam
Gide Loyrette Nouel, Paris
alia.karam@gide.com

Introduction

On 27 February 2025, the Court of Justice of the European Union (ECJ) delivered its highly anticipated judgment in the Società Italiana Lastre (SIL) case (C-537/23). The decision, prompted by a preliminary reference from the French Cour de Cassation,^[1] provides significant clarification on the legal regime applicable to jurisdiction clauses – particularly asymmetric clauses – under Article 25 of the Brussels I bis Regulation. This ruling marks a pivotal moment for cross-border commercial litigation in Europe, especially for practitioners drafting or litigating contracts containing jurisdiction agreements.

At the heart of the dispute was the validity of so-called ‘asymmetric’ jurisdiction clauses. These are provisions, common in international finance and commercial contracts, that allow one party (typically the lender or issuer) to choose among several courts while binding the other party to a single predetermined forum. French case law has long approached such clauses with caution, leading to a patchwork of sometimes inconsistent decisions and considerable legal uncertainty.^[2]

The SIL case offered the ECJ an opportunity to clarify two key points:

1. The interplay between Article 25 of the Brussels I bis Regulation and national law, especially regarding the grounds for invalidating jurisdiction clauses.
2. The substantive validity of asymmetric jurisdiction clauses under EU law.

The division of competence: EU law vs national law

The first part of the ECJ’s reasoning addresses the general regime for jurisdiction clauses, distinguishing between matters governed by EU law and those left to national law.

The legal uncertainty

Article 25(1) of the Brussels I bis Regulation sets out both formal and substantive requirements for jurisdiction clauses. Formal requirements include the need for a written agreement or confirmation, or adherence to established practices between the parties or international trade usages. Substantively, there must be a defined legal relationship between the parties. However, the Regulation also refers to the national law of the chosen Member State to assess whether the agreement is ‘null and void as to its substantive validity’.

This reference to national law has been a source of confusion. The Regulation does not define nullity as to substantive validity, nor does it specify its scope. The central question is how to distinguish between defects that should be assessed under EU law and those that fall within the remit of national law.

The French Cour de Cassation’s preliminary question in SIL exemplified this uncertainty. It asked whether challenges based on imbalance or vagueness in a clause should be assessed under national law – for example, as a clause abusive or a ‘significant imbalance’ (déséquilibre significatif) within the meaning of Article 1171 of the French Civil Code – or pursuant to autonomous criteria under EU law, interpreted in light of the Regulation’s objective of legal certainty.

The ECJ’s clarification

The ECJ resolved this ambiguity by adopting a restrictive interpretation. It held that the words ‘null and void as to its substantive validity’ in Article 25(1) refer only to general grounds for invalidating contracts – namely, defects of consent (mistake, fraud or duress) and legal incapacity. All other issues, including the predictability^[3] or balance of the clause,^[4] fall under EU law.

This clarification has two main consequences:

• The role of national law is strictly limited to examining general contractual defects.
• All other challenges to the clause – such as claims of imbalance or vagueness – must be assessed under EU law.

The validity of asymmetric jurisdiction clauses

Having clarified the general regime, the ECJ turned to the core issue: the validity of asymmetric jurisdiction clauses under EU law.

Such clauses are prevalent in international commercial practice, especially in loan, guarantee and bond agreements. Their validity under EU law has been uncertain, particularly following restrictive and fluctuating French case law. The SIL judgment is the ECJ’s first clear and decisive intervention on this issue under the Brussels I bis Regulation.

The ECJ’s conditions for validity

The Court held that asymmetric clauses are compatible with the Regulation, provided they meet three conditions:

1. Designation of jurisdiction: They designate courts of one or more EU Member States or of states party to the Lugano II Convention.
2. Objective criteria: They identify objective factors that are sufficiently precise to enable the seized court to ascertain whether it has jurisdiction.
3. No infringement of exclusive or protective jurisdiction: The clause must not infringe the exclusive jurisdiction rules (Article 24) or the special protective regimes for weaker parties in the insurance, consumer or employment sectors (Articles 15, 19 or 23).

The third condition is uncontroversial, reflecting the Regulation’s logic of reserving procedural protections for specific subject matters. The first two conditions, however, merit further discussion.

The ECJ’s rationale

Both conditions stem from a common principle: the requirement of precision, dictated by the Regulation’s objectives of predictability, transparency and legal certainty (Recitals 15 and 16). In this light, the ECJ’s aim is to exclude ‘open’ asymmetric clauses – those granting one party complete discretion to seize ‘any other competent court’, as was the case here, without identifying which courts may be chosen. The two conditions laid down by the Court directly address the main difficulties such clauses raise and seek to prevent the uncertainty they create.

Objective and predictable criteria

A clause that merely refers to ‘any competent court’ provides no objective criterion and leaves the signatory party unable to anticipate where it might be sued. This legal uncertainty runs counter to the Regulation’s objectives. Hence the requirement for objective factors sufficiently precise to allow both the seized court and upstream, the parties, to verify jurisdiction. Examples of such factors may be found in the ECJ’s Coreck Maritime ruling (clause designating ‘the place of the principal establishment’)^[5] and the French eBizcuss decision (‘the place where Apple suffered damage’),^[6] as both were deemed sufficiently objective by their respective jurisdictions. In SIL, the Court further accepts references to ‘courts competent under the provisions of the Brussels I bis Regulation or the Lugano II Convention’, since these point to a clearly identified legal framework (section 59).

Exclusion of non-EU jurisdictions

The second difficulty with ‘open’ clauses is the possibility to bring proceedings before courts in any third country, whose jurisdictional rules are neither harmonised nor easily accessible. This creates an increased risk of conflicting judgments and undermines legal certainty (section 61). The ECJ therefore requires that asymmetric clauses designate only courts of EU Member States or Lugano II parties, ensuring the necessary clarity and predictability (section 62).

Critical reflections

While the ECJ’s reasoning is clear, its conclusions invite discussion. In practice, the two conditions it lays down do not always guarantee the predictability they are meant to serve.

• An ‘objective’ element does not necessarily ensure predictability. As authors noted in eBizcuss,^[7] allowing one party to sue where it suffers damage leaves considerable uncertainty – the place of harm is not always foreseeable when drafting the clause. Similar concerns arise with some of the special jurisdiction rules under Article 7 of Brussels I bis, the application of which has generated extensive case law precisely because they are not entirely predictable.
• The blanket exclusion of courts of third countries also seems debatable. A clause that precisely designates, for example, the courts of New York or Singapore provides clarity and allows the parties to anticipate its effects. As commentators have observed, the Court appears to blur the issue of a clause’s substantive validity with that of Article 25’s scope of application.^[8]

This leaves an area of uncertainty: does an asymmetric clause expressly designating a third-country court truly conflict with the Regulation’s logic, or does it simply fall outside its scope? While such a clause may not strictly satisfy the ECJ’s conditions, it arguably meets the predictability requirement when its wording is clear and unambiguous – a question that will need future clarification.

Practical implications for practitioners

In light of the SIL judgment, practitioners should review the drafting of asymmetric jurisdiction clauses with particular care.

• Avoid vague or open-ended formulations.
• Use objective, verifiable criteria for designating courts.
• Prefer, where possible, the exclusive designation of courts within the EU or Lugano II states.

Clauses drafted before this judgment that allow recourse to ‘any competent court’ or to courts in third countries without objective criteria may now be at risk of being set aside by EU courts for failing to meet the standards of predictability and legal certainty. Judgment rendered on the basis of such clauses may also be at risk of being refused enforcement within the EU.

Conclusion

The ECJ’s SIL judgment marks a significant step towards greater legal certainty and harmonizsation in the treatment of jurisdiction clauses in the EU. By clarifying the respective roles of EU and national law, and by setting clear conditions for the validity of asymmetric clauses, the Court has provided valuable guidance for both courts and practitioners. However, some questions remain – particularly regarding the treatment of clauses designating third-country courts – which may require further judicial clarification in the future.

For now, legal professionals are advised to ensure that jurisdiction clauses in cross-border contracts are drafted with the utmost precision, in line with the ECJ’s requirements, to safeguard their enforceability within the EU.