Commerzbank Aktiengesellschaft v Liquimar Tankers Management Inc

Whether an asymmetric jurisdiction clause is exclusive for Brussels 1 Recast is determined autonomously under EU law. A clause restricting one party to proceedings in the courts of a Member State, while permitting the other party to sue in any competent court, may nevertheless confer exclusive jurisdiction for Article 31(2). Article 31(2) takes precedence over the ordinary first-seized rule in Article 29(1). The designated court may proceed despite proceedings in the non-designated court. In deciding whether to stay related proceedings under Article 30, the exclusive jurisdiction agreement is a powerful factor against a stay. The court must also consider relatedness, procedural stage and proximity to the subject matter.

Commerzbank brought two English actions concerning repayment of ship-finance loans, guarantees and related forbearance agreements. Liquimar and Pauline had brought parallel proceedings in Greece concerning the guarantees, alleged releases, the arrest and sale of a vessel, and related losses. The agreements contained asymmetric jurisdiction clauses requiring proceedings brought by the defendants to be brought in England, while preserving the Bank’s ability to sue in other competent jurisdictions.

The defendants applied for stays under Articles 29 and 30 of Brussels 1 Recast and for service out of the jurisdiction to be set aside. The central questions were whether the clauses conferred exclusive jurisdiction within Article 31(2), whether the English proceedings should nevertheless be stayed, and whether the clauses were invalid under Article 25.

1. The defendants’ applications for stays were refused, and the applications to set aside service out of the jurisdiction were also refused.

2. The characterisation of an asymmetric jurisdiction clause under Article 31(2) of Brussels 1 Recast is a question of autonomous EU law, not English contractual law. The issue concerns the clause’s classification under the Regulation, while substantive validity remains subject to the law identified by Article 25(1).

3. Read as a whole, the clauses conferred exclusive jurisdiction on the English courts when the defendants sued. The fact that the Bank retained a right to sue in another competent court did not deprive the clauses of that character. The reasoning in Nikolaus Meeth v Glacetal Sarl supported treating jurisdiction as exclusive even where the designated court depended on which party initiated proceedings.

4. Article 29(1) is expressly without prejudice to Article 31(2). It therefore gives way where Article 31(2) applies. The English court could proceed irrespective of the stage reached in the Greek proceedings. Recital 22 informed that interpretation by emphasising the effectiveness of exclusive choice-of-court agreements and the avoidance of abusive litigation tactics.

5. The clauses were not invalid under Article 25. They designated the English courts as exclusive when the defendants sued, and Article 25 did not require the agreement to exclude every other possible court. The French reasoning based on potestativité did not establish an autonomous EU-law objection.

6. For the related claims, the court applied the Article 30 discretion. The relevant considerations included the degree of relatedness and risk of irreconcilable decisions, the procedural stage, and proximity to the subject matter. The exclusive jurisdiction agreement was a powerful factor against a stay, as recognised in Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AC. The English-law construction issues were narrow, and England was the more proximate forum.

7. Since the Bank succeeded under Brussels 1 Recast, the challenge to service out, based on essentially the same grounds, fell away.