French Supreme Court rules again on asymmetric jurisdiction clauses

The French Supreme Court has handed down another decision on the validity of one-way jurisdiction clauses, this time finding that the clause in question was enforceable. 

The jurisdiction clause was contained in contracts between Apple Sales International and its resellers, including a company called eBizcuss. It provided that:

“…the parties shall submit to the jurisdiction of the courts of the Republic of Ireland. Apple reserves the right to institute proceedings against Reseller in the courts having jurisdiction in the place where Reseller has its seat or in any jurisdiction where a harm to Apple is occurring”. (emphasis added)

In breach of this clause, eBizcuss commenced proceedings against various Apple entities in France. The French Supreme Court held that the clause was valid, stating that:

“the Court of Appeal validly found that this clause complied with the foreseeability principle that jurisdiction clauses must meet, since the clause permitted the identification of the Courts that would potentially have to dispose of a dispute between the parties relating to the interpretation or the performance of the contract”. (unofficial translation) 

Comment

This ruling suggests that an asymmetric jurisdiction clause will not be struck down by the French courts simply because it is asymmetric; it will only be unenforceable if it is not possible to identify the courts that might have to resolve any dispute should it arise.

The Court has refined its approach taken in earlier rulings, which caused a stir in financial circles: Ms X v Banque Privée Edmond de Rothschild, No 11-26.022 (December 2012 European Finance Litigation Review) and ICH v Crédit Suisse, No. 13-27264 (July 2015 European Finance Litigation Review). The effect of these earlier rulings was that commercial parties carefully considered whether to use one-way jurisdiction clauses, in particular when dealing with French parties or in transactions with a French nexus. Even in light of this most recent ruling, there is still much uncertainty about which types of one-way jurisdiction clauses may be upheld by the French courts. It is important to note that the clause in question was more limited in scope than clauses commonly used by finance parties, which normally allow a finance party to litigate in any court of competent jurisdiction.