𝗕𝗮𝗰𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗕𝗮𝘀𝗶𝗰𝘀 | 𝗣𝗼𝘀𝘁 #𝟮
- FIO Legal Solutions
- Nov 21
- 2 min read
Author: Luiza Rey
Let’s talk about something counter intuitive:
When I review international deals for startups and investors, I often see dispute clauses that look fair — but in practice, put one side at serious risk. So more often than not, in cross-border contracts, symmetry can be a liability.
𝙒𝙝𝙮 “𝙢𝙪𝙩𝙪𝙖𝙡” 𝙘𝙡𝙖𝙪𝙨𝙚𝙨 𝙖𝙧𝙚𝙣’𝙩 𝙖𝙡𝙬𝙖𝙮𝙨 𝙛𝙖𝙞𝙧.
Most cross-border contracts copy-paste a “balanced” dispute clause:
1. Either side can sue in the other’s country.
2. Either side can trigger arbitration.
3. Everything looks symmetrical.
But in global business, that symmetry can be dangerous.
Real Example
• A German SaaS startup signed a multimillion-euro subscription deal with a telecom company in India.
• The contract had a mutual jurisdiction clause — either party could sue in the other’s courts.
• When the client stopped paying, the startup prepared to sue in Germany.
But before they could act, the client filed a case in India, freezing the dispute there.
• The German team faced years of procedural delays, unfamiliar local rules, and heavy translation costs — while the unpaid invoices kept growing.
• Had the clause been asymmetric, the startup could have sued in its own courts and enforced the judgment faster across the EU.
𝗧𝗵𝗲 𝘀𝗺𝗮𝗿𝘁𝗲𝗿 𝗼𝗽𝘁𝗶𝗼𝗻: 𝗮𝘀𝘆𝗺𝗺𝗲𝘁𝗿𝗶𝗰 𝗰𝗹𝗮𝘂𝘀𝗲𝘀
In some deals — especially those involving cross-border payments, licensing, or venture debt — fairness doesn’t always mean identical procedural rights.
𝗙𝗼𝗿 𝗲𝘅𝗮𝗺𝗽𝗹𝗲:
- The investor or service provider can sue in either jurisdiction (theirs or the counterparty’s).
- The counterparty can sue only in the investor’s/home jurisdiction.
𝙄𝙩’𝙨 𝙘𝙖𝙡𝙡𝙚𝙙 𝙖𝙣 𝙖𝙨𝙮𝙢𝙢𝙚𝙩𝙧𝙞𝙘 𝙟𝙪𝙧𝙞𝙨𝙙𝙞𝙘𝙩𝙞𝙤𝙣 𝙘𝙡𝙖𝙪𝙨𝙚.
And while it sounds one-sided, courts in England, Singapore, and Hong Kong consistently uphold them when both sides are sophisticated parties.
Even France, which once rejected them, now allows them if negotiated and commercially justified.
𝗧𝗵𝗲 𝗹𝗼𝗴𝗶𝗰:
Cross-border fairness isn’t about identical rights — it’s about realistic enforcement power.
When the economic risk is one-sided, the procedural rights should reflect that.
Symmetry feels fair.
But sometimes, it quietly shifts all the risk to the wrong side.
📚 𝗙𝗼𝗿 𝘁𝗵𝗼𝘀𝗲 𝘄𝗵𝗼 𝘄𝗮𝗻𝘁 𝘁𝗼 𝗱𝗶𝗴 𝗱𝗲𝗲𝗽𝗲𝗿:
Mayer Brown earlier this year published an excellent overview of how Europe’s highest court views asymmetric jurisdiction clauses — and what it means for international contracts.
By Luiza Castro Rey
