Maritime Legal Update
– June 2026
England: asymmetric
jurisdiction clauses in ship finance – important Commercial Court decision
(prepared by Marek Czernis & Co. Law
Office)
Firm note – ship
finance, jurisdiction clauses and cross-border disputes
The Law Office actively advises banks,
shipowners, investment funds, leasing institutions and offshore stakeholders
regarding: ship finance, syndicated lending, mortgage enforcement, jurisdiction
and arbitration clauses, anti-suit injunctions, cross-border litigation, and
maritime finance security structures.
The Law Office assisted one of the parties
involved in the dispute discussed in this judgment and was engaged in matters
concerning jurisdiction, parallel proceedings and the operation of asymmetric
jurisdiction clauses in ship finance documentation.
1. Introduction – Spec
1 Limited & Others v The Export-Import Bank of China
In Spec 1 Limited & Others v The
Export-Import Bank of China [2026] EWHC 1162 (Comm) the Commercial Court
considered the interpretation and effect of asymmetric jurisdiction clauses
commonly found in international ship finance transactions.
The judgment represents one of the most
significant recent decisions in this area.
2. Background
The dispute arose from ship finance
arrangements involving a loan of approximately USD 61 million.
The loan agreement contained an asymmetric
jurisdiction clause under which: the borrowers were generally required to sue
in England, while the lender retained the right to commence proceedings in
other competent jurisdictions, including parallel proceedings.
Such provisions are commonly encountered in
ship finance documentation.
2A. What are
asymmetric jurisdiction clauses?
Before considering the Court's decision, it is
useful briefly to explain the contractual mechanism at the centre of the
dispute.
Asymmetric jurisdiction clauses, often referred
to as one-way jurisdiction clauses are a particular type of dispute resolution
provision widely used in international finance transactions, especially in: ship
finance, offshore project finance, project finance, syndicated lending and
other asset-backed financing structures.
Their defining feature is that they grant
different procedural rights to the parties.
Typically: the borrower is required to bring
claims exclusively before a designated court, whereas the lender retains the
right to commence proceedings before other courts of competent jurisdiction,
including in multiple jurisdictions simultaneously.
From a lender's perspective, such clauses
provide greater flexibility when enforcing loans and security interests.
This is particularly important in ship finance
because a vessel, being the principal secured asset, may move between different
jurisdictions within a relatively short period of time.
As a consequence, lenders may need to pursue
simultaneous legal actions in several jurisdictions, including: vessel arrest
proceedings, mortgage enforcement, security preservation measures and claims
against related parties.
The Commercial Court's decision focused
precisely on the legal consequences arising from such an asymmetric
jurisdiction clause.
3. Parallel
proceedings in England and Singapore
Against the background of related Singapore
proceedings, the lender applied for a stay of the English proceedings.
The borrowers sought an anti-suit injunction
and alternatively requested anti-anti-suit relief.
4. Construction of the
jurisdiction clause
The Court held that the case turned primarily
on the proper construction of the jurisdiction clause.
Bright J concluded that the parties had
deliberately agreed a regime whereby: borrowers retained a contractual right to
sue in England, the lender preserved rights to sue elsewhere and parallel
proceedings were expressly contemplated by the contractual structure.
Accordingly parallel proceedings were a
foreseeable consequence of the parties’ bargain.
5. Stay application
The Court emphasised that England remained the
anchor jurisdiction under the financing documents.
A party seeking a stay therefore had to
establish strong reasons for departing from the agreed jurisdiction.
The Court held that: duplication of
proceedings, risk of inconsistent judgments and increased litigation costs
were insufficient where such consequences had
been contemplated by the parties when entering into the agreement.
6. Anti-suit
injunction
The borrowers’ application for an anti-suit
injunction was also dismissed.
The Court held that the lender’s Singapore
proceedings were not brought in breach of the contractual arrangements.
The lender was contractually entitled to
commence such proceedings under the asymmetric jurisdiction clause.
The existence of parallel proceedings did not,
without more, render them vexatious or oppressive.
7. Importance for ship
finance
The decision is particularly significant for
ship finance transactions.
The Court recognised that ship finance often
requires: rapid enforcement action, mortgage enforcement, multi-jurisdictional
proceedings, protection of security interests in different jurisdictions and
flexible protection of lenders’ security interests against highly mobile
maritime assets.
For that reason, asymmetric jurisdiction
clauses continue to play a central role in maritime finance documentation.
8. Law Office
conclusions
The judgment confirms that English courts will
construe asymmetric jurisdiction clauses primarily by reference to their
wording and commercial purpose.
The decision demonstrates that: parties should
carefully consider the consequences of asymmetric jurisdiction clauses, parallel
proceedings may be an intentional feature of a financing structure and parties
may later find it difficult to rely on that same consequence as a basis for
obtaining a stay or anti-suit relief.
For the ship finance sector, the judgment
provides important confirmation of the effectiveness of jurisdiction structures
commonly used by lenders financing vessels and offshore projects.
Final note – our
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