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On 27 February 2025, the European Court of Justice ("ECJ") ruled on case C-537/23, involving Societa Italiana Lastre ("SIL") and Agora Sarl ("Agora"), regarding the validity of asymmetrical jurisdiction clauses under private international law and the Brussels I Regulation [Regulation (EU) No. 1215/2012]. This regulation governs the jurisdiction of courts and the recognition and enforcement of judgments within the EU, ensuring the protection of parties’ rights in international disputes.
The dispute arose from an asymmetrical jurisdiction clause in an international contract related to a project undertaken by two individuals. The contract specified that disputes would be resolved by the court of Brescia, Italy. However, it also granted SIL the right to initiate legal proceedings in any other competent court, whether in Italy or abroad.
This type of clause is characterized by granting one party discretionary choice of jurisdiction, while binding the other party to a fixed forum. In this instance, SIL retained the ability to select the jurisdiction, whereas Agora was restricted to the court of Brescia.
Following alleged defects in project execution, both SIL and Agora were sued for liability and damages before the Regional Court of Rennes, France. Subsequently, Agora initiated proceedings in France against SIL based on a guarantee. SIL contested the French court’s jurisdiction, but both the Regional Court of Rennes and the Cour d'Appel ruled in favour of French jurisdiction.
The Cour de Cassation referred the matter to the ECJ, questioning whether the asymmetrical jurisdiction clause aligned with the Brussels I Regulation and consumer protection principles. Specifically, the ECJ was asked to assess whether such a clause placed the weaker party at an unlawful disadvantage and whether it was legally enforceable. This necessitated an interpretation of Article 25 (1) of the Brussels I Regulation, particularly regarding the validity of jurisdiction clauses.
The ECJ determined that an asymmetrical jurisdiction clause is not inherently invalid. Such clauses may be upheld if they comply with the Brussels I Regulation and do not impose an unfair disadvantage on the weaker party.
The court emphasized that the validity of such clauses must be assessed on a case-by-case basis. In this instance, the ECJ found no undue disadvantage for Agora, ruling that the clause remained effective as it did not contravene the Brussels I Regulation. Since the contract was purely commercial and concluded between two businesses, the consumer protection provisions of the regulation were deemed inapplicable.
The ECJ reaffirmed that jurisdiction clauses contribute to contractual freedom and legal certainty, both of which are protected under the Brussels I Regulation. Given that both parties had freely negotiated and agreed to the terms, the fact that Agora lacked the same jurisdictional flexibility as SIL did not constitute an impermissible disadvantage.
The ECJ's ruling in the SIL v. Agora case has significant implications for the enforceability of asymmetrical jurisdiction clauses in international commercial contracts. The judgment reinforces legal certainty in cross-border agreements and clarifies that such clauses are not inherently invalid but must be scrutinized on an individual basis to ensure compliance with the Brussels I Regulation and applicable legal principles. Ultimately, the ruling affirms that commercial parties’ contractual autonomy influences the validity of jurisdiction clauses.
Dr Ralf Hafner
Dr Tobias Pörnbacher
