In its widely published decision of 7 October 20151, France’s highest court, the Cour de cassation has adopted a clear stance in favour of validating conditional and asymmetric forum selection clauses.
The case involved Apple Sales International and one of its approved resellers in France. The litigious clause stipulated the following: “This agreement and the corresponding relationship between the parties shall be governed by and construed in accordance with the laws of the Republic of Ireland and 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 the Reseller has its seat or in any jurisdiction where a harm to Apple is occurring”.
After rejecting the claimant’s contention that it is unbalanced, the France’s Highest Court validated the clause and held that it allows identifying the forum likely to be selected, thus it satisfies the condition of foreseeability which has to be met by such asymmetrical jurisdiction clauses.
This decision is in line with the decision of 25 March 2015 adopted by the same division (première chambre civile), which referred to the conditions of foreseeability and security2. The Court has clearly changed its stance since the Banque Rothschild case3 (2012) in which it had adopted a much more hostile approach towards asymmetrical jurisdiction clauses. Any such clause which allows the identification of the forum likely to be selected by the parties would now be considered as valid. Henceforth, would only be held invalid any such clause granting one party the right to select any forum with jurisdiction over the dispute, without further clarification. Thus, the risk is mitigated whenever the terms of the option granted to one party refer to objective elements such as a contracting party’s domicile, or the location of a subsidiary, the assets, the breach or the damage.
The Court’s decision of 7 October 2015 is based on the Brussels I Regulation and should equally apply under the Brussels I bis Regulation4 as conditions of foreseeability and security are also referred to in the latter5.
Such decision should be welcomed favourably for it has abandoned the restrictive conditions set out in the Banque Rothschild case that had rendered practitioners perplexed and embarrassed. Asymmetrical jurisdiction clauses are commonly used in international contracts. The decision in Banque Rothschild cast doubt on the efficiency of such clauses which the decision of 25 March 2015 failed to elucidate. Henceforth, it is clear that the Cour de cassation’s case law is in favour of validating asymmetrical jurisdiction clauses.
The decision has also dissipated any doubt as to the validity of other variables of asymmetrical jurisdiction clauses, namely clauses granting one party the option to choose between national courts and an arbitral tribunal. For instance, a loan agreement may stipulate that, in case of default, the lender has an unfettered choice to bring a claim before national courts (cheaper costs, no obligation to seek exequatur of the judgement whenever the debtor has assets in the jurisdiction of the national court selected by reference to the clause, etc.) or to bring a claim before an arbitral tribunal (potential political risk in the debtor’s country, complexity of the dispute, etc.).
The wide publication of the decision sought by the France’s Highest Court reveals the importance of this decision which must prevail over conflicting positions under previous decisions.