Governing Law and Jurisdiction - ISDA Provision

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2002 ISDA Master Agreement

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ISDA Text: 13

13. Governing Law and Jurisdiction

13(a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.
13(b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement (“Proceedings”), each party irrevocably:―

13(b)(i) submits:―
(1) if this Agreement is expressed to be governed by English law, to (A) the non-exclusive jurisdiction of the English courts if the Proceedings do not involve a Convention Court and (B) the exclusive jurisdiction of the English courts if the Proceedings do involve a Convention Court; or
(2) if this Agreement is expressed to be governed by the laws of the State of New York, to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City;
13(b)(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party; and
13(b)(iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.

13(c) Service of Process. Each party irrevocably appoints the Process Agent, if any, specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by applicable law.
13(d) Waiver of immunities. Each party irrevocably waives, to the extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or order for specific performance or recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.

Related agreements and comparisons

Click here for the text of Section 13 in the 1992 ISDA
Template:Isdadiff 13

Resources and Navigation

This provision in the 1992

Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project
Navigation Preamble | 1(a) (b) (c) | 2(a) (b) (c) (d) | 3(a) (b) (c) (d) (e) (f) (g) | 4(a) (b) (c) (d) (e) | 55(a) Events of Default: 5(a)(i) Failure to Pay or Deliver 5(a)(ii) Breach of Agreement 5(a)(iii) Credit Support Default 5(a)(iv) Misrepresentation 5(a)(v) Default Under Specified Transaction 5(a)(vi) Cross Default 5(a)(vii) Bankruptcy 5(a)(viii) Merger Without Assumption 5(b) Termination Events: 5(b)(i) Illegality 5(b)(ii) Force Majeure Event 5(b)(iii) Tax Event 5(b)(iv) Tax Event Upon Merger 5(b)(v) Credit Event Upon Merger 5(b)(vi) Additional Termination Event (c) (d) (e) | 6(a) (b) (c) (d) (e) (f) | 7 | 8(a) (b) (c) (d) | 9(a) (b) (c) (d) (e) (f) (g) (h) | 10 | 11 | 12(a) (b) | 13(a) (b) (c) (d) | 14 |

Index: Click to expand:



Largely the same, in practical effect, between the two versions: the clause grants the non-exclusive jurisdiction of the courts of the governing law you have chosen: you can launch proceedings wherever you like, but you can’t complain if they are launched in a home court, which leaves open that you might complain if they are launched in some other, inconvenient, court.

No doubt a litigation lawyer would be outraged at this suggestion that the versions mean different things, but life’s too short.



Section 13(a)

There are parts of the ISDA Master Agreement with which you will spend weeks, months, or even years of your life grappling, pushing and pulling the embedded and nested intellectual concepts around in your mind, scrabbling desperately for a handhold, trying with all your might to get some purchase on the forensic Play-Doh that these clauses represent. We are fairly confident, without even knowing you, that section 13(a) will not be one of them.

If it is, it may be time to get your coat.

Section 13(b)

On the disapplication of Section 13(b)(iii)

Where you wish to elect the exclusive jurisdiction of (say) English courts in your Schedule, you may wish to explicitly disapply the proviso to 13(b) which provides that nothing in this clause precludes the bringing of Proceedings in another jurisdiction (in the flush language of the 1992 ISDA version; in 13(b)(iii) of the 2002 ISDA version).

Strictly speaking, you shouldn’t need to do this: Section 1(b) provides that the inconsistency created by the use of the expression “exclusive jurisdiction” in the Schedule will prevail over the text the Master Agreement. But that won’t stop officious attorneys the world over trying.

But, counselor, be warned: if you do try to explicitly override it — you know, for good measure and everything — and your counterparty pushes back, having deliberately taken the clarifying language out of a draft, you may be in a worse position when interpreting the meaning of “exclusive jurisdiction”, precisely because the counterparty refused to rule out the use of other jurisdictions. A cracking example of the anal paradox at work.

Don’t be too clever by half, in other words.

“Convention Court”

The 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters is this fellow. Be my guest. Let me know what you find.

The 1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters is this puppy. Knock yourself out, and let us know how you get on.

Section 13(c)

English law

A process agent, for an agreement subject to the jurisdiction the courts of England and Wales, is an agent located in England or Wales (or, in theory, their adjacent territorial waters) who accepts service of legal proceedings filed in those courts for someone who is not in England or Wales — technically, who has no permanent place of business here.

The rules of English civil court procedure[1] requires a claim (in the trade called “process”) brought before an English (or Welsh) court to be physically served on the defendant in England or Wales (or, at the limit, in their adjacent territorial waters).[2] Service in Scotland — or its territorial waters — will not do. This means you can serve process on someone rowing a boat in the Bristol Channel, but not in Inverness, much less on someone escaping in rowing a boat to, for example, the Isle of Skye.

This means if you have a contract with a counterparty who has no place of business in England or Wales (or their territorial waters), it will need to appoint a process agent on whom you can serve court papers should, heaven forfend, you need to.

Jurisdiction, not governing law

Point for details freaks: it is the jurisdiction of the courts and not the governing law law that matters. A contract governed by Swiss law but subject to the jurisdiction of the English courts[3] would still need an English or Welsh process agent. In theory — and, yes, a ripe theory it would be — a contract governed by English law but subject to the exclusive jurisdiction of Italian courts[4] would not.

This also means that an agreement subject to foreign law and the non-exclusive jurisdiction of foreign courts, and which therefore could, in theory, come before an English or Welsh court, would require a process agent in England, Wales, or their territorial waters for that to happen.

This would look odd in the negotiation process.

The JC offers a free bag of sweeties to the first person who can show they have successfully inserted the appointment of an English process agent into a foreign law agreement for this reason.[5]

The agent doesn’t have to agree, or do anything

Now here’s an interesting thing. Having contractually agreed your “method or place” for service, as long as the plaintiff can prove it complied with it — usually by having its process server swear an “affidavit of service” — the court will not then enquire whether the claim, duly served, ever found its way to the actual defendant.

The view is that the offshore defendant knowingly assumed the risk of its process agent being competent enough to forward the correspondence, in the same way a local defendant assumes the risk of its receptionist neglecting to pass a package actually delivered to its legal eagles.

So the painful strictures in process agent boilerplate dealing with replacement or succession of agents are not strictly necessary: if the contract provides it may be served “by delivering it to the first person you meet at the counter in the Gregg’s pastry shop in Waterloo station at 9am” — even, I like to think, by “impaling it on Boadicea’s sword on the Victoria Embankment in the presence of one or more tourists”, then that is what you must do, and no more.

This is, by the way, no more than an articulation of the basic rules of agency: the agent represents the principal: what one gives to a disclosed agent, one gives to the principal as far as one is concerned.

New York law

The New York rules of civil procedure are here. As you might expect, they seem complicated. CT Corporation seems to charge a lot for serving process — so we assume there is a reason for that.

Section 13(d)

Don’t confuse sovereign immunity with ultra vires — cue thunder crack at the mention of Orange County or Hammersmith and Fulham council and a dramatic look from our house gopher — for they are quite different things.

  • Ultra vires: If a contract is beyond your powers or capacity to enter into a contract in the first place then it is void ab initio; any payments you have made under that contract are also void and you may reclaim them[6], and you can appeal to the court system to do that. That is to say, ultra vires is an “intra-legal” measure, recognised, defended and enforced by the courts.
  • Sovereign immunity: Sovereign immunity is a different, “extra-legal” thing: it is to say “I am, quite literally, above the law: I am the law, and I do not have to subject myself to the judicial branch of my law — or anyone else’s law — unless I choose to.” This extends to being free from judicial intervention if I decide not to perform my contractual obligations, but it also means I cannot myself resort to the court process to make my counterparty perform its obligations. If I choose to go to court, then I subject myself fully to the courts as regards actions my counterparty wishes to bring against me.

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See also



  1. Rule 6.11 of Part 6, details freaks.
  2. In the Civil Procedure Rules the “jurisdiction” is defined as “unless the context requires otherwise, England and Wales and any part of the territorial waters of the United Kingdom adjoining England and Wales” so, therefore, those of the Her Majesty’s territorial waters which adjoin Scotland or Northern Ireland are out of bounds.
  3. This sounds ridiculous, I know, but it does happen. We have direct personal experience.
  4. This sounds ridiculous, I know, and is ridiculous. We have no personal direct experience of this, and do not want any, so you can save your postcards)
  5. Up to fifty new pence in value, postage and packing excepted. Judge’s decision final is arbitrary, crotchety, and no correspondence will be entered into unless he feels like it, which he probably will. Competition not open to friends, relations, acquaintances or corresondents of the JC.
  6. But — quid pro quo, Clarice — any profits you have made you must also disgorge.