Are asymmetric jurisdiction clauses back on the table for UK law governed facility agreements?

Why should I read this?

The Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Hague 2019) came into force on a UK-wide basis on 1 July 2025, and will apply to judgments arising out of proceedings issued on or after that date. Hague 2019 provides a framework for the mutual recognition and enforcement of judgments on civil or commercial matters among contracting states, where there is no contract or a contract without an exclusive choice of court agreement.

The other contracting states (to date) are: the EU member states (other than Denmark), Uruguay and Ukraine. Hague 2019 has been ratified/acceded to but is not yet in force for: Albania, Andorra and Montenegro (it will come into force in 2026 for each of those jurisdictions).

Hague 2019 is relevant to Finance transactions because lenders have traditionally favoured the use of asymmetric jurisdiction clauses in agreements. Post Brexit, however, it became harder for UK judgments to be recognised and enforced when these clauses were used. The implementation of Hague 2019 now means that UK judgments should be more easily recognised, even where relevant documents include asymmetric jurisdiction clauses (subject to some limitations). This is not a complete return to the pre-Brexit position, however, and we consider below some issues to be aware of on cross-border transactions.

What should I do?

Hague 2019 means that asymmetric jurisdiction clauses may be an option on transactions involving Hague 2019 contracting states. Caution should be exercised though, as we do not have certainty that all Hague 2019 jurisdictions will recognise a UK law governed asymmetric jurisdiction clause as valid. Recent case law in the European Court of Justice (Societa Italiana Lastre SpA v Agora) found asymmetric jurisdiction clauses to be valid only if the choice of courts was limited to EU member states or Lugano Convention member states (the UK is neither). Although that decision relates to the Brussels Recast Regulation and not Hague 2019, it means that, where certainty of enforcement in an EU member state is important to the transaction, lawyers in EU member states may continue to recommend symmetrical jurisdiction clauses (at least until enforcement under Hague 2019 has been tested in court).

Gaetano Jannone, Partner, Dispute Resolution (Brussels)  comments: “The entry into force of Hague 2019 will provide a rather strong argument in favour of the validity of asymmetrical forum clauses throughout the European Union. However, because there is no uniform instrument regulating the validity of asymmetrical jurisdiction clauses outside of the Lugano / Brussels scope, the validity of an asymmetrical jurisdiction clause may still be a matter to be assessed under local private international law in contracts with a UK party. If flexibility is key, our recommendation is to check the validity of a proposed asymmetric jurisdiction clause in those jurisdictions that are important and, ideally, name only those jurisdictions as an alternative to the “main” courts available under the agreement.”

What else do I need to know about Hague 2019?

Beyond its impact on financial agreements, Hague 2019 is enormously important for anyone involved in cross-border dispute management, which is considered further in our Beyond Borders briefing and enforcement flowchart, Hague 2019 is a sister convention to the Hague Convention of 30 June 2005 on Choice of Court Agreements (Hague 2005), providing for mutual recognition and enforcement of judgments relating to contracts with a symmetrical jurisdiction clause. It is worth noting that not all contracting states to Hague 2005 are party to Hague 2019 and the appropriate jurisdiction clause does have to be considered on a transaction by transaction basis.

Hague 2019 does not apply to arbitration and certain other matters are also excluded from the scope of Hague 2019, including insolvency and intellectual property.

Head of Finance, Nick Swiss  comments: “Lenders and their advisers need to consider the benefits of having a choice of court on enforcement versus certainty of enforcement of judgments. It’s good news that Hague 2019 may provide more options for some jurisdictions but we’ll be continuing to use asymmetric jurisdiction clauses with caution on cross-border transactions, seeking the advice of our colleagues across our global Finance team.”

Further reading on Hague 2019

Beyond borders: how Hague 2019 is helping to navigate the complexities of cross-border recognition and enforcement of judgments in a post-Brexit world

Enforcement flowchart

For more information on Hague 2019, contact our partners below.