Jurisdiction Clause
The jurisdiction clause determines which state courts or arbitral tribunals will hear disputes arising from an international policy, independently of the governing substantive law.
- Clause type
- Condition
- Origin/Market
- London Market (LMA/NMA/Lloyd’s)
- Favours
- Insurer
- Negotiability
- Negotiable
Purpose
The jurisdiction clause specifies which state courts or arbitral bodies have authority over disputes arising from an international policy. London market insurers often prefer English courts or arbitration seated in London, since an established body of insurance-specialist case law exists there, making proceedings more predictable. The clause can be drafted as exclusive (only the named forum) or non-exclusive (additional forums remain available).
Effect and limits
The jurisdiction clause governs only the place of proceedings, not the applicable law — that is the role of the separate choice of law clause. In many jurisdictions, particularly under US consumer and insurance regulatory law, mandatory local rules can override a chosen jurisdiction clause in whole or in part, so the clause does not offer absolute certainty.
Negotiation and practice
Multinational policyholders should assess whether an exclusive jurisdiction clause in favour of a single forum suits their interests or whether a non-exclusive version provides more flexibility for claims in several countries. Particular attention should be paid to the interplay with arbitration and service of suit clauses, since these mechanisms can complement or overlap with one another.