Unilateral choice of jurisdiction clauses are void

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On 26 September 2012, the French Supreme Court in civil and commercial matters decided that a jurisdiction clause in a contract providing for a competent forum, but which allowed one of the parties to elect to bring proceedings in another forum, was void.

THE CASE -

A Luxembourg bank faced a claim brought by one of its French customers in the French courts. The bank challenged jurisdiction based on a governing law and jurisdiction clause in the following terms (in translation):

“The relationship between the bank and the customer is subject to Luxembourg law. Any disputes between the customer and the bank will be submitted to the exclusive jurisdiction of the courts of Luxembourg. The bank nevertheless reserves the right to bring proceedings in the customer’s home or any other court of competent jurisdiction in the absence of an election for the above-stated jurisdiction.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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