Contractual choice of jurisdiction under facility agreements

Investec Bank Plc -v- Protopapa & another [2025] EWHC 3202 (Comm)

This case reinforces the importance of jurisdiction clauses in facility agreements. For in-house lawyers and banking professionals, the key takeaway is to ensure clear drafting for governing law and jurisdiction provisions and to anticipate risks involved in multi-jurisdiction proceedings.

The judgment made it clear that in order to bypass a contractually agreed jurisdiction clause, a party must show very strong reason for doing so. Commercial parties who have voluntarily negotiated and agreed to resolving their disputes in a particular jurisdiction are contractually bound to litigate in that jurisdiction absent special circumstances.

The decision also illustrates that where there may be a suite of related contracts incorporating different law and jurisdiction provisions, the Court will not necessarily decide that all related disputes should be dealt with in the same forum. If the parties have opted for differing law and jurisdiction provisions, they are taken to have accepted the possibility of multiple proceedings.

In this case, the different contracts were related but served different functions. Consequently, there was no obstacle to the disputes under the relevant facility agreements being dealt with in the English Court, even though any disputes under the related security and guarantee documents might end up in the Geneva courts.

The background facts

The claimant is a bank incorporated in England and Wales. The defendants, Mr Protopapa and Mr Chatila, are business associates resident in Switzerland. Mr Chatila owns a Swiss company, m3 Groupe Holding SH (m3GH) that is said to be the parent company of around 140 other companies engaged in real estate and finance.

The contractual context

On 29 April 2022, the claimant advanced a Personal Credit Facility to Mr Protopapa and, on 26 July 2022, it advanced a Joint Credit Facility to Mr Protopapa and Mr Chatila (together, the Facilities).

Each of the Facilities incorporated the claimant’s Standard Terms, which included a Governing law clause (clause 29). This clause provided for English law and contained an asymmetric English jurisdiction provision for the benefit of the claimant. This meant that the claimant had the option of commencing proceedings in a forum other than the English Court. The defendants did not and were taken to have submitted to the English Court’s jurisdiction in the event that the claimant commenced proceedings in England and Wales.

The defendants’ obligations under the Joint Facility were guaranteed by a Corporate Guarantee issued by m3GH in favour of the claimant. The Guarantee was governed by Swiss law and subject to the exclusive jurisdiction of the Geneva Courts.

The claimant alleged that between October and December 2023, Events of Default occurred under the Joint Facility, entitling the claimant to accelerate the loan. The parties subsequently entered into a Standstill Agreement that imposed various mandatory prepayment and information provision requirements on the defendants.

The Standstill Agreement incorporated the governing law and jurisdiction clause of the Joint Facility. In connection with the Standstill Agreement, the defendants and m3GH provided the claimant with a Deed of Guarantee Confirmation and other security deeds that were all governed by Swiss law and subject to the jurisdiction of the Geneva Courts.

The claimant alleged that the defendants did not remedy the existing Events of Default by the time the standstill period expired and that other Events of Default transpired. The claimant also contended that certain Events of Default under the Joint Facility comprised cross-defaults under the terms of the Personal Facility. The claimant issued a number of reservation of rights letters under the Personal Facility, all of which incorporated clause 29 of the Standard Terms.

In December 2024, the claimant discovered that mG3H was intending to restructure itself in breach of the terms of the Guarantee Confirmations it had given. The claimant obtained an injunction from the Geneva Court restraining m3GH from doing so. Neither of the defendants was party to those proceedings.

In February 2025, the claimant served acceleration notices under both Facilities. It then commenced proceedings in the English Court, seeking payment of all outstanding sums. The proceedings were served on the defendants’ Service Agent as provided for in the Facilities.

In March 2025, Mr Protopapa entered into a Hold Harmless Agreement with m3GH, whereby Mr Protopapa would be held harmless and indemnified in respect of any claims under the Joint Facility. The Hold Harmless Agreement was governed by Swiss law and subject to the exclusive jurisdiction of the Geneva Courts.

The jurisdictional application

The defendants accepted that the English Court had jurisdiction in relation to the dispute and also that they had been validly served with proceedings out of the jurisdiction in Switzerland. However, they asked the English Court to decline jurisdiction and stay its proceedings primarily on the basis that the defendants alleged it would be more appropriate to have the claimant’s claims tried in Switzerland.

The applicable principles

In circumstances where the Court has a residual discretion to grant a stay of its proceedings where the parties have agreed that the English Court has jurisdiction in respect of the claim, the Court should have regard to the fact that the parties contractually selected the chosen forum and should only permit proceedings in another jurisdiction if there are strong or very strong reasons for so doing.

The fact that the parties have bound themselves contractually to the jurisdiction of the English Court makes it much more difficult for the applicant seeking a stay of the English proceedings to demonstrate that there is a more suitable forum. Matters of convenience that were foreseeable at the time the contract was entered into will not be enough. The applicant will have to demonstrate exceptional circumstances before the Court will allow it to move away from a contractual agreement on jurisdiction.

There are strong policy reasons for upholding agreements as to the forum in which disputes are to be resolved. This is particularly so in the case of an exclusive, as opposed to non-exclusive, jurisdiction clause. However, in both cases, there would have to be strong reasons for departing from the agreed forum.

The Commercial Court decision

There was some dispute between the parties as to whether clause 29 was an exclusive or non-exclusive jurisdiction clause due to its asymmetric nature. However, even if it were non-exclusive, the Court nonetheless held that the defendants had not shown sufficiently strong reason for departing from their contractual agreement on jurisdiction.

Specifically, the Facilities provided for English law and jurisdiction. While there were a number of related contracts that provided for Swiss law and Geneva Court jurisdiction, the parties to those related contracts were not the same as the parties to the Facilities. Furthermore, the related contracts served purposes and functions distinct from those under the Facilities. The related contracts provided support for the Facilities but were not the same.

Additionally, the claims under the Facilities were distinct and straightforward, being based on alleged defaults by the defendants. They did not depend on establishing any relief available under the related contracts.

The Court emphasised that the fact that there might be a multiplicity of proceedings under the various contracts did not militate against the parties’ choice to litigate disputes under the Facilities in the English Court. The convenience of having the proceedings litigated in Switzerland as that was where the defendants and their assets were located was not sufficient to outweigh the English jurisdiction agreement. Furthermore, the English Court was better placed to apply English law, which governed the Facilities, to resolving disputes under the Facilities.

The Court also drew attention to the fact that the jurisdiction agreements in the Facilities contained the additional provision recording the parties' agreement that "the courts of England are the most appropriate and convenient courts to settle Disputes" (as defined). Consequently, the defendants were estopped from contending that England was not the more suitable forum for the resolution of the claimant's claims under the Facilities.

The Court did, however, find that on the facts the defendants had not submitted to the English Court’s jurisdiction. Had it been relevant, therefore, this would not have formed a valid ground for preventing the defendants from challenging the English Court’s jurisdiction.

The Court, therefore, declined to stay its proceedings or to order that it should not exercise its jurisdiction on the grounds of forum non conveniens.

Comment

The Court proceeded on the basis that the Hague Convention on Choice of Court Agreements 2025 did not apply because the jurisdiction clause was asymmetric. Had it applied, then the English Court would have had no discretion to decline jurisdiction.

There are differing views on whether an asymmetric jurisdiction provision is exclusive or non-exclusive and whether they are covered by the Hague Convention. Lenders who benefit from such asymmetric jurisdiction clauses may wish to consider whether in some circumstances a purely exclusive jurisdiction clause may be preferable.