In brief

Unilateral jurisdiction clauses, commonly known as asymmetric jurisdiction agreements, are common in certain international commercial agreements, in particular in the context of international banking practice. These clauses permit one party to select the jurisdiction and forum for dispute resolution in respect of any claims it may have against the other party under the agreement, whilst not affording the counterparty with the same flexibility. In the case of Lara Basem Musa Khoury v Mashreq Bank PSC [2022] DIFC CA 007 (“Khoury v Mashreq Bank“), the Dubai International Financial Center (DIFC) Court of Appeal upheld the validity of these clauses when both parties have clearly consented to their terms, reaffirming the principle of party autonomy in contract law.

Background to Khoury v Mashreq Bank

Ms. Khoury, being a customer of the Bank, sought to advance claims against the Bank under a Master Investment Agreement (“Agreement“) for damages. The underlying Agreement between the parties included a unilateral jurisdiction clause in respect of which Ms. Khoury agreed that any claims that the Bank may have against her may be brought in the DIFC Courts (non-exclusively), whilst the Bank (based in onshore Dubai) had made no reciprocal agreement that claims by Ms. Khoury against the Bank could be brought in the DIFC Courts.

In this regard, the relevant dispute resolution clause of the Agreement read as follows:

“22.1 This Agreement shall be governed by, and be construed in accordance with, the laws of the Dubai International Financial Centre (‘DIFC’). The Client agrees, for the benefit of the Bank, that any legal action or proceedings arising out of or in connection with this Agreement against it or any of its assets may be brought in the relevant courts of the DIFC.

22.2 The Client irrevocably and unconditionally submits to the jurisdiction of the relevant courts of the DIFC. The submission to such Jurisdiction shall not (and shall not be construed so as to) limit the right of the Bank to take proceedings against the Client in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.”

The validity and enforceability of a unilateral jurisdiction clause under DIFC law

In principle, the Court of Appeal found that there was no reason not to uphold a clause of this nature. The Court noted that while the clause served to “reflect the imbalance between the comparative market power of banks as contrasted with their customers…such clauses are familiar as a matter of international banking practice and, in part at least, serve a legitimate commercial purpose.”[1] Furthermore, the Court also referenced Etihad Airways PJSC v Flother [2020] EWCA 1707; [2022] QB 303, at [5], where the Henderson LJ stated that “…it is common ground that they [i.e., asymmetric jurisdiction clauses] serve a legitimate commercial purpose…Their aim is to ‘ensure that creditors can always litigate in a debtor’s home court, or where its assets are located’, and they ‘also seek to reassure the creditor that it can only be sued in its preferred jurisdiction’…”.[2]

Given that no other jurisdictional gateway existed in the matter in question to bring Ms. Khoury’s claims against the Bank within the jurisdiction of the DIFC Court, the Court examined Article 5(A)(2) of the Judicial Authority Law, Law No. 12 of 2004 (JAL) (also known as the “opt-in” agreement). Article 5(A)(2) provides that the DIFC Court of First Instance may hear and adjudicate any civil or commercial claims where the parties have agreed in writing to submit their claims to the DIFC courts. In this regard, the Court of Appeal found that the clause 22 of the Agreement could not be interpreted to provide for a reciprocal agreement by the Bank permitting Ms. Khoury to bring her claims against the Bank in the DIFC Courts.

Furthermore, the Court of Appeal also confirmed the position that an agreement to DIFC governing law does not in and of itself amount to an agreement to the DIFC Courts having jurisdiction.

The enforceability of unilateral jurisdiction clauses is contingent upon the clear and unequivocal consent of both contracting parties. The Court of Appeal scrutinized whether the parties had a mutual understanding and agreement on the jurisdictional terms at the time the contract was formed and for such clauses to be enforceable, they must accordingly be expressly articulated in the agreement, leaving no ambiguity regarding the parties’ intentions.

An important consideration by the Court was also the commercial purpose of such a clause. This notwithstanding, the Court of Appeal underscored the unilateral nature of such clauses and the power imbalance in favor of commercial banks as opposed to their customers. Whilst the above judgment confirms that unilateral jurisdiction clauses are enforceable under DIFC law, it is important to consider the relevant jurisdictions where this may apply when drafting the agreement, as historically, the position in France and China, for example, has been less favorable.

[1] Paragraph 63.

[2] Paragraph 63.


Luka Kristovic-Blazevic is a partner who specializes in international commercial arbitration, with a particular focus on complex international construction disputes, and is the head of the Middle East International Arbitration practice. He has experience of arbitral proceedings conducted under the auspices of the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), the Dubai International Arbitration Centre (DIAC) and the International Centre for the Settlement of Investment Disputes (ICSID), as well as ad hoc. Luka has advised clients from a number of cultural and geographic backgrounds, and has worked on disputes involving both common and civil laws as well as Shariah. From 2019-2020, Luka has been recognised by Who’s Who Legal as a "Future Leader – Arbitration” in Saudi Arabia and has been cited as “especially notable for construction-related international arbitration” by Chambers Global (Saudi Arabia). Luka is a guest lecturer at Prince Sultan University in Riyadh, where he lectures on dispute resolution and construction law, and also acts as arbitrator.


Marlize Dumas is an associate in Baker McKenzie’s Dispute Resolution Practice Group in Dubai. Her practice focuses on the resolution of commercial disputes spanning a range of sectors, including construction, mining and financial services. She has experience in conducting arbitration references under leading international arbitration rules, such as the ICC, DIAC, LCIA and ADCCAC, as well as the DIFC Courts.