Litigation and Alternative Dispute Resolution

A New Take by the Hong Kong Court

An asymmetric jurisdiction clause ("AJC") is a jurisdiction clause that allows one party to commence proceedings over disputes arising from the underlying contract against the other contracting party in any jurisdiction of its choice while the other party is restricted to commence proceedings exclusively in one specified jurisdiction. AJCs are most commonly used in facility or loan agreements, especially if the agreement involves cross-border financial arrangements or overseas parties.

AJCs would ensure that a creditor can always litigate in a debtor's home court while preserving its right to bring proceedings where the debtor's assets are located at the time a dispute arises. This increase the prospect of a creditor successfully recovering a debt.

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