Asymmetrical Dispute Resolution Clauses and Their Validity in France and England

by Kim André Qvale, student in Master in Economic law. 


Rapid commercial transactions in the global economy have created a need to solve contractual disputes efficiently. One example of this is the increase in asymmetrical dispute resolution clauses.[1] Indeed, in most international commercial contracts today the parties include a dispute resolution clause, often in the form of an arbitration clause, in case a dispute arises. Traditionally, this clause is bilateral and provides both parties with the right to bring a dispute to arbitration. However, in recent decades there has been a significant rise in asymmetrical dispute resolution clauses, which only give one party the option to choose in which forum the dispute shall be settled; arbitration or litigation (and sometimes they even give the option of choosing in which jurisdiction). However, do these clauses respect public policy considerations regarding equality of the parties or the principles of certainty and mutuality? This article will present a comparative perspective on the legal reasoning and principles underlying the different attitudes adopted towards asymmetrical dispute resolution clauses by French and English courts.

         Asymmetrical dispute resolution clauses, which ab initio give one party better rights than the other, come in many forms and go under many different names, depending on their defining features.[2] What unites them all is their ability to tailor dispute resolution mechanisms according to the needs of business, for instance as a “means to ensure enforcement against assets of debtors in a world where assets may be located in several jurisdictions and very quickly relocated.”[3] In other words, if a party wants to initiate arbitration proceedings, it will do so in a forum where the respondent has assets in case it gets a favourable outcome. The challenge with traditional litigation is the inherent difficulty in enforcing foreign court decisions against the assets of another national. However, the interests of the international business community does not always align with the public policy considerations of States. France and England provide two interesting comparative examples representatives of the common law and civil law systems, and their attitude towards the asymmetrical dispute resolution clause somewhat reflects this.



The English jurisprudence has evolved in its stance towards asymmetrical dispute resolution clauses. One of the first cases involving the validity of such a clause was the English Court of Appeals case of Baron v. Sunderland Corp. (1966), in which only one of the parties had the right to refer the dispute to arbitration. The central question the Court had to answer was whether the clause satisfied the principle of mutuality by which both parties must have the option to refer a dispute to arbitration.[4] In doing so, the Court invalidated the clause because it is “an essential ingredient of an arbitration clause that either party may, in the event of a dispute arising, refer it, in the provided manner, to arbitration.”[5] In other words, the standard of equality was taken to be bilateral in the sense that both parties had to have the right to refer the dispute to arbitration, and the clause did not satisfy it.

         Some twenty years later, the Court of Appeals in Pittalis v. Sherefettin (1986) partly rejected the mutuality principle. This time, the Court insisted on the commercial nature of the parties’ relationship as a starting point for assessing the validity of an asymmetrical dispute resolution clause.[6] It held that the clause was valid as long as both parties had freely consented to it as sophisticated parties because “the fact that the option [was] exercisable by one of the parties only seems to be irrelevant [since] the arrangement suits both parties.”[7]

         Furthermore, the case of Barclays Bank plc v. Ente Nazionale di Previdenza (2015) confirmed Pittalis v. Sherefettin and built on the same reasoning in holding that “there were good practical reasons” for the clause.[8] English courts thus partly rejected the principle of mutuality as a criterion that could invalidate asymmetrical dispute resolution clauses.


English courts have nonetheless imposed certain restrictions upon the beneficiary party of an asymmetrical dispute resolution clause. For instance, if the beneficiary has taken substantial steps towards one of the options, i.e. arbitration or litigation, it may be stopped from exercising the other option. In NB Three Shipping Ltd. v. Harebell Shipping Ltd (2004) the Court acknowledged that such a clause is in principle valid, but that it “would cease to be available if [the beneficiary of the option clause] took a step in the action or they otherwise led [the other party] to believe on reasonable grounds that the option […] would not be exercised.”[9] This line of reasoning was furthermore confirmed in Deutsche Bank AG v. Tongkah Harbour Public Co Ltd. (2011).[10] Hence, English courts generally will not penetrate the contractual sphere of two sophisticated parties to invalidate an asymmetrical dispute resolution clause, however, the aforementioned restrictions will be enforced.



While English courts have adopted a positive attitude towards asymmetrical dispute resolution clauses, the story is different on the other side of the channel. Despite upholding some asymmetrical dispute resolution clauses early on, French courts have shown themselves less and less lenient in accepting their prima facie unequal treatment of the parties.

In Société Sicaly v. Société Grasso Stacon (1974), the Court of Cassation held that when it was the intention of the parties to only provide one of them with the option to refer a dispute to arbitration or litigation, the clause was valid.[11] Indeed, the reasoning underpinning this decision put emphasis on the intention and will of the parties, and thus resembles the attitude adopted by English courts. Moreover, in Société Edmond Coignet v. COMIT (1990) the Court of Cassation emphasised the contractual liberty of the parties in choosing their asymmetrical dispute resolution clause. It upheld the validity of the clause because “the common will of the parties to advantage only one party is clear from the terms of the clause and from the circumstances in which the clause was concluded.”[12] In other words, as long as there was mutual consent between informed parties, which could be clearly ascertained from the wording of the clause, French courts would uphold asymmetrical dispute resolution clauses.

However, the widely criticised Rothschild case (2012)[13] represented a break from this jurisprudence. The French Court of Cassation struck down an asymmetrical dispute resolution clause (which gave only one party the right to choose in front of which jurisdiction the dispute shall be brought) due to its ‘potestative’ character.[14] According to the previous article 1170 in the French Civil Code, a clause is potestative when “performance of a contract is made subject to the occurrence of a condition entirely within the power of only one of the contracting parties to cause to occur or to prevent.”[15] In its holding, the Court acknowledged that asymmetrical dispute resolution clauses are valid in principle if they satisfy the criterion laid down above concerning the mutual consent. However, in the present case, the fact that the advantaged party could bring the dispute in front of whichever jurisdiction it wanted at its own discretion provided the clause with a potestative character, and was thus contrary to the obligation laid down by the 2001 Brussels Regulation, which provided rules for forum selection at the time.[16]

This decision was a departure from earlier decisions in which the Court of Cassation upheld the validity of asymmetrical dispute resolution clauses as long as the common intention and will of the parties was discernible from the clause. The decision was heavily criticised, notably because the Court used a French contractual principle to interpret an EU regulation, and thus invalidating the asymmetrical clause. English courts had adopted a wider view of the said regulation, and critics claimed the French Court of Cassation should have referred the case to the Court of Justice of the European Union. [17] The Court, however, argued that the clause was invalid because it deprived the disadvantaged party of any certainty as to where a potential dispute would be resolved.[18]

The Rothschild case (2012) was more or less confirmed in Danne v. Credit Suisse (2015)[19] when the Court of Cassation again invalidated an asymmetrical dispute resolution clause. The fact that the advantaged party could bring proceedings “before any other competent tribunal” violated the requirements for legal certainty and predictability.[20] However, later that year the Court provided some important clarifications in Société v Apple (2015).[21] Here, the Court in fact upheld an asymmetrical dispute resolution clause on the basis that, contrary to Danne v. Credit Suisse and Rothschild, it satisfied the legal certainty and predictability requirements. This was because the disadvantaged party could easily identify in which forum(s) a potential dispute could be brought by the beneficiary of the clause. In this case, a dispute could be brought either in front of courts in Ireland or alternatively “any jurisdiction where harm to [Apple] is occurring.[22] The wording of the asymmetrical dispute resolution clause is thus of significant importance in satisfying the principles of legal certainty and predictability.


The burgeoning question, then, is to what extent French and English courts will uphold these asymmetrical dispute resolution clause. The scholarly consensus is that French courts will uphold them as long as the advantaged party has some objective limits as to which forums it can bring a dispute, thereby insuring certainty for the disadvantaged party, i.e. that it can identify where potential dispute resolutions might take place.[23] For English courts, the most obvious restriction is the one which precludes the beneficiary from choosing one option when it has already taken substantial steps towards the other option it had under the asymmetrical dispute resolution clause.

[1] Draguiev, Deyan. ‘Unilateral Jurisdiction Clauses: The Case for Invalidity, Severability or Enforceability’. Journal of International Arbitration 31, no. 1 (2014): 19–46.

[2] One-sided, asymmetrical, hybrid, unilateral.

[3] Draguiev, Deyan. ‘Unilateral Jurisdiction Clauses: The Case for Invalidity, Severability or Enforceability’. Journal of International Arbitration 31, no. 1 (2014): 19.

[4] Sian, D. (1993). Agreements to Refer Disputes to Arbitration. Singapore Journal of Legal Studies, 261-273.

[5] Born G.B. International Commercial Arbitration. Alphen aan den Rijn: Kluwer Law International, 2009. P. 733.

[6] Simon Nesbitt, Henry Quinlan, The Status and Operation of Unilateral or Optional Arbitration Clauses, Arbitration International, Volume 22, Issue 1, 1 March 2006, Pages 133–150.

[7] [1986] 1EGLR 130, p. 132.

[8] Norton, Rose & Fulbright, International arbitration report – Issue 9 | October 2017, p. 26.

[9] [2004] EWHC 2001 (Comm), para 11.

[10] [2011] EWHC 2251 (QB), para 25.

[11] Cour de cassation, Chambre civile 1, du 15 mai 1974, 72-14.706.

[12] Cour de cassation, Chambre civile 1, du 4 décembre 1990, 89-16.047.

[13] Cour de cassation, Chambre civile 1, du 26 septembre 2012, 11-26.022.

[14] Id.

[15] Article 1170 in the French Civil Code prior to the 2016 Reform.

[16] Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.

[17] C. Burford, L. Wynaendts, D. Zerbib – What future for unilateral dispute resolution clauses.

[18] Cour de cassation, Chambre civile 1, du 26 septembre 2012, 11-26.022.

[19] Cour de cassation, Chambre civile 1, du 25 mars 2015, 13-27.264.

[20] Id.

[21] Cour de cassation, Chambre civile 1, du 7 octobre 2015, 14-16.898.

[22] Id.

[23] Norton, Rose & Fulbright, International arbitration report – Issue 9 | October 2017, p. 26.