Asymmetric jurisdiction clauses are typically employed in financial contracts in a manner favorable to the lending institution. These clauses grant exclusive jurisdiction to one court for one party (usually the borrower), while allowing the other part...
Asymmetric jurisdiction clauses are typically employed in financial contracts in a manner favorable to the lending institution. These clauses grant exclusive jurisdiction to one court for one party (usually the borrower), while allowing the other party (typically the lender) a broader choice of forums. While structurally distinct from exclusive jurisdiction agreements, asymmetric clauses share certain functional elements-particularly in binding the borrower to a specific court-that resemble the core features of exclusive jurisdiction agreements. Exclusive jurisdiction agreements play a central role in international jurisdictional frameworks. Instruments such as the 2005 Hague Convention on Choice of Court Agreements and the Brussels Ia Regulation (Regulation (EU) No. 1215/2012) are premised on the enforceability of such exclusive arrangements. Against this backdrop, whether asymmetric jurisdiction clauses fall within the scope of these international frameworks presents a significant interpretive question. Given that asymmetric clauses continue to be used widely in practice, scholarly and judicial discourse has emerged advocating for their inclusion within the ambit of international jurisdictional rules by interpreting them as a modified or expanded form of exclusive jurisdiction agreement. English courts, emphasizing party autonomy, have generally upheld the validity of asymmetric jurisdiction clauses. French courts, on the other hand, have shown skepticism toward such clauses, citing concerns about imbalance between parties, though they have adopted a more flexible approach in cases where the choice of forum available to the dominant party is limited. In this context, the 2025 judgment of the Court of Justice of the European Union (CJEU) marked a significant development. The Court confirmed that asymmetric jurisdiction clauses are compatible with the Brussels Ia Regulation and laid down specific criteria for their validity. This ruling has greatly enhanced legal certainty and predictability regarding the enforceability of such clauses across Europe. It is expected that, following this decision, a harmonized approach will emerge among EU Member States when assessing the validity of asymmetric jurisdiction clauses in cross-border contexts. The judgment provides a clear basis for bringing such clauses within the purview of international jurisdictional regulation. Although asymmetric clauses are distinct from exclusive jurisdiction agreements, their structural similarities, functional equivalence, the Regulation's goal of avoiding torpedo litigation, and the principle of party autonomy suggest that they merit similar protection under international jurisdictional frameworks. As these clauses may become relevant in the negotiation of financial contracts by Korean companies and in the recognition and enforcement of foreign judgments by Korean courts, it is essential to maintain close attention to legal developments and international jurisprudence-particularly the trajectory following the CJEU's 2025 ruling.