17 November 2022

In October 2022, our managing partner, dr.Richard Schmidt participated in the annual conference of International Law Firms in Dubai, and made a presentation on recent issues of enforcing asymmetrical arbitration and jurisdiction clauses in international dispute resolution.

Our law firm is member of International Law Firms (ILF), a network of 70+ independent law firms in leading jurisdictions around the world. After 2 years hiatus because of the COVID-19 pandemic, ILF could organize its annual meeting in Dubai on 28-29 October 2022. The conference was hosted by ProConsult Advocates & Legal Consultants, a leading full-service law firm in Dubai.

Richard has chosen the subject of asymmetrical dispute resolution clauses, because this topic is among most debated issues of international commercial dispute resolution.

Asymmetric arbitration and jurisdiction clauses, which give more right, or possibility in relation with dispute resolution to one of the parties, are frequently used in international trade, yet their enforceability varies from one jurisdiction to another.

After presenting the international legal framework of such dispute resolution clauses, Richard identified major trends in the contemporary court practice in leading European jurisdictions.

While English courts earlier hesitated to enforce one-sided dispute resolution clauses, a paradigm shift took place beginning from the ‘90s, and nowadays these clauses are generally respected by UK courts.

Unfortunately, the opposite trend shapes in France, where after the infamous Rotschild decision of the French Supreme Court in 2012, the case law started to produce contradictory court decisions in relation with asymmetric choice-of-court agreements, which undermines foreseeability and legal certainty.

A negative trend can be traced in Russia, where the year of 2012 was a turning point with the decision delivered in the Russian Telephone Company vs. Sony Ericsson case, and a digest issued by the Russian Supreme court in 2018 in order to unify the practice of lower courts, basically negates unilateral dispute resolution clauses.

When it comes to Germany, in this jurisdiction the courts generally enforce unilateral dispute resolution clauses, however they closely scrutinize them on case-by-case basis. German courts rejected the enforcement of asymmetric clauses in cases, when the clause has become part of the contract as a general term and condition, and it grossly infringed the restricted  party’s right to access to court.

Richard concluded his presentation by highlighting that given that party-autonomy is the basic governing principle of dispute resolution agreements, asymmetric arbitration and jurisdiction clauses should not be invalidated automatically, and the non-enforcement of this clauses should be an ultima ratio, to be used by state courts only in exceptional cases.

We would like to thank to Ms. Alexandra Bessone Cardoso, Chair of ILF, founding and managing partner of ABC Legal (Lisbon, Portugal), and to Mr.Tony Maalouli, Vice-Chair of ILF,  founder and managing partner of ProConsult Advocates & Legal Consultants for organizing the 2022 annual conference of ILF in Dubai.