Clarifying Party Autonomy in Asymmetric Jurisdiction Clauses: Exclusive English Jurisdiction and Limited US Carve-Outs in Hipgnosis SFH 1 Ltd v Manilow

Introduction

Hipgnosis SFH 1 Ltd v Manilow & Anor ([2025] EWCA Civ 486) is a Court of Appeal decision on the interpretation of an asymmetric jurisdiction clause in a Music Catalogue Agreement. The appellant (Hipgnosis) claimed that the respondents (including the singer-songwriter Barry Manilow) wrongly withheld royalty-type receipts (“Sony Receipts”) under the agreement and sought English declarations that they held those sums on trust and must pay them over. The respondents countered that an “additional purchase price” was due to them, justifying their retention of the receipts, and exercised a contractual option to litigate that discrete issue in the courts of Los Angeles or New York.

The first instance judge stayed the English claims on jurisdiction grounds, finding a floating jurisdiction that shifted in favour of the US once the respondents commenced proceedings there. Hipgnosis successfully appealed, the Court of Appeal holding that the English court’s exclusive jurisdiction (conferred by the second sentence of clause 14) was fixed at issue date and that the respondents’ limited US option did not remove or suspend English jurisdiction over Hipgnosis’s claims.

Summary of the Judgment

The Court of Appeal unanimously allowed the appeal, lifting the stay imposed by Marcus Smith J. It held:

Exclusive English jurisdiction: Clause 14’s second sentence irrevocably submits “for all purposes” to English courts. All claims by Hipgnosis—including those on additional purchase price—must be brought in England.
Limited US carve-out: The fourth sentence (“Notwithstanding the foregoing…”) gives only the respondents a choice to sue in Los Angeles or New York on purchase price claims. It does not revoke or qualify Hipgnosis’s exclusive English jurisdiction.
No floating jurisdiction: Jurisdiction is determined on the date of issue. There is no “floating” or race-to-crystallise effect. Once Hipgnosis sued in England, English jurisdiction was fixed.
No stay in discretion: Even if there were parallel proceedings, the English court would not exercise any discretion to stay its proceedings, since English law governs the contract and the clause mandates English resolution of Hipgnosis’s disputes.

Analysis

Precedents Cited

Key authorities on jurisdiction clauses and parallel proceedings shaped the Court’s reasoning:

Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40: Established the “one-stop shop” presumption that parties wish all disputes in a contract to be resolved by the same tribunal absent clear carve-outs. The Court of Appeal applied this principle to confine carve-outs strictly to their terms.
Lornamead Acquisitions Ltd v Kaupthing Bank HF [2011] EWHC 2611 (Comm): Confirmed that an asymmetric clause granting a lender multi-jurisdictional rights does not allow the lender to renounce a borrower’s right to compel English jurisdiction.
Mauritius Commercial Bank v Hestia Holdings Ltd [2013] EWHC 1328 (Comm): Upheld that a one-sided jurisdiction carve-out must yield to the borrower’s obligation to sue in England; parallel proceedings may occur but do not defeat exclusive submission.
BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA [2019] EWCA Civ 768: Reaffirmed the mutual exclusivity presumption when interlinked contracts bear divergent jurisdiction clauses. Only clear language can cause overlapping jurisdiction.
BNP Paribas SA v Anchorage Capital Europe LLP [2013] EWHC 3073 (Comm): Anti-suit injunction granted where party’s US proceedings breached its English jurisdiction commitment.
Etihad Airways PJSC v Flöther [2020] EWCA Civ 1707: Acknowledged the possibility of parallel Proceedings under an asymmetric clause, but emphasised that the “one-stop shop” principle and issue estoppel limit inconsistency.
CA Indosuez (Switzerland) SA v Afriquia Gaz SA [2023] EWCA Civ 1072: Confirmed that jurisdiction is fixed at issue date and cannot be lost later by unilateral acts.
Canada Trust Co v Stolzenberg (No. 2) [2002] 1 AC 1: Established the “first-seised” rule—issue date determines the proper forum.

Legal Reasoning

The Court of Appeal’s decision turns on straightforward contract construction and long-standing principles of jurisdiction:

Plain meaning of clause 14: The second sentence evinces an irrevocable, exclusive agreement to litigate “any related dispute or claim … in the English courts.” That covers Hipgnosis’s trust and additional price claims.
Scope of the fourth sentence: Beginning “Notwithstanding the foregoing…”, it carves out only respondents’ purchase price claims, granting them an additional forum choice. It neither rescinds respondents’ English submission nor extends to Hipgnosis.
No “floating jurisdiction”: Jurisdiction cannot float. Once Hipgnosis issued in England, English courts were seised of all Hipgnosis’s claims. The respondents’ later US action does not strip the English court of jurisdiction.
Dispute resolution policy: Courts presume parties want all disputes decided once, by one tribunal. Parallel proceedings are tolerated if clearly agreed, but do not override issue-seizing rules or exclusive clauses.
Discretion to stay: Even if parallel actions raise the spectre of inconsistent judgments, the clear parties’ agreement and governing-law clause preclude a stay on forum-non-conveniens grounds.

Impact

Hipgnosis SFH 1 Ltd v Manilow provides authoritative guidance on asymmetric jurisdiction clauses:

Drafting precision: Parties must spell out carve-outs clearly, specifying which claims and which parties benefit.
Party autonomy: Courts will respect a party’s irrevocable submission, even if the other party has an additional choice of forum.
Jurisdiction certainty: The seisin rule is upheld—jurisdiction attaches at issue and cannot be unilaterally displaced thereafter.
Parallel proceedings: They may run in cases of asymmetric clauses, but cannot undermine a proper exclusive submission by the counter-party.
Limited scope for stays: Courts will not stay proceedings in favour of a second forum where an exclusive clause and governing-law clause centre one court as the primary forum.

Complex Concepts Simplified

Asymmetric jurisdiction clause: A clause giving one party exclusive right to sue in the chosen forum, while the other party also has that right plus a further forum option.
Exclusive submission: Parties agree that one court alone may determine all disputes under the contract.
Carve-out (Notwithstanding clause): A limited exception to an otherwise exclusive clause, preserving rights for one party in another jurisdiction.
Seisin/First-seised rule: Jurisdiction is fixed by the date on which a court is first properly issued with proceedings.
Forum non conveniens: A court’s discretionary power to stay or dismiss proceedings if another forum is more appropriate; inapplicable where an exclusive clause governs.
One-stop shop presumption: In absence of clear language, parties are taken to have intended one forum for all contract disputes to avoid fragmentation.

Conclusion

The Court of Appeal’s decision in Hipgnosis SFH 1 Ltd v Manilow reaffirms the primacy of clear party agreements on jurisdiction. An exclusive submission to English courts cannot be displaced by a one-sided option to sue elsewhere once a claim has been properly brought. Drafting asymmetric clauses requires precise language on which claims and which parties benefit from carve-outs. Jurisdiction attaches on issue, not on subsequent choices. This judgment will serve as a leading authority on enforcing and interpreting asymmetric jurisdiction agreements and on resisting improper stays where an exclusive forum clause and governing-law provision designate one court as final arbiter.