Contractual jurisdiction clauses: when third parties are bound
Published on 12 October 2026
English court finds that third party with rights under a contract is required to observe the jurisdiction clause
In Campeau v Gottex [2026], the English High Court considered whether third parties who derived rights under a contract could enforce the agreement's exclusive jurisdiction, and, in particular, whether the third party could serve proceedings outside of the jurisdiction without permission of the court as a result.
The court agreed that, as a matter of contractual interpretation, the jurisdiction clause extended to disputes over third party rights. Although not strictly necessary given his conclusion on contractual construction, the judge also addressed the controversial question of whether the Contracts (Rights of Third Parties) Act 1999 makes third parties, who have rights under a contract, subject to the jurisdiction clause in the underlying contract. He concluded that the third parties were bound by the jurisdiction clause.
Accordingly, the third party was bound by the exclusive jurisdiction clause and it was correct of the claimant to serve the claim outside the jurisdiction without the court's permission.
Claim background
The dispute arose from a sale and purchase agreement (SPA) dated 17 April 2019 between OE Waste and Geco Holdco Ltd, whereby OE Waste sold the entire issued share capital of Granville Ecopark Holding Company Ltd for £17.7 million plus deferred consideration. At the time, Mr Campeau was a director of the company being sold and head of the investment advisory team providing advice to the fund which owned OE Waste.
Crucially, clause 10.3 of the sale and purchase agreement provided that each warrantor undertook not to bring any claim against any target company or their directors, officers, employees or agents in relation to any matter arising out of or in connection with the transaction documents. The clause expressly stated that it was intended that target companies and their directors should be entitled to the benefit of these undertakings under the Contracts (Rights of Third Parties) Act 1999.
The agreement was governed by English law and contained an exclusive jurisdiction clause in favour of the courts of England and Wales, providing that each party irrevocably agreed that the English courts would have exclusive jurisdiction to settle any dispute arising out of or in connection with the agreement.
In December 2023, OE Waste commenced proceedings in Luxembourg against Mr Campeau, alleging that he had acted negligently or in breach of duty as a de facto director, resulting in the company being sold at an undervalue of some £44.5 million to £80 million. Mr Campeau contended that this claim was brought in breach of clause 10.3 and that any dispute over the scope of that clause should be brought in England pursuant to the exclusive jurisdiction clause. Mr Campeau issued a claim in England to this effect.
Service of the English claim
Mr Campeau served the present proceedings out of the jurisdiction on OE Waste without permission, relying on Civil Procedure Rule (CPR) rule 6.33(2B), which permits a claimant to serve a claim on a party out of the jurisdiction without the permission of the court.
Typically, a claim cannot be served out of the jurisdiction without the court's permission, save in certain circumstances. One such exception is CPR rule 6.33(2B) which, in effect, provides that a claim can be served without permission where it relates to a contract subject to a jurisdiction clause in favour of the English courts.
The defendant's arguments
The defendant's central argument was that the claimant was not a party to the contract and that accordingly there was no basis for him to be treated as a party to, or otherwise be permitted to rely on the exclusive jurisdiction clause in the agreement on two key grounds.
First, on contractual interpretation, It argued that the SPA made it clear that third parties may not have any rights to enforce a term unless 'expressly provided' by the SPA and there was no such express provision in respect of the jurisdiction clause. Second, on statutory Interpretation, It also argued that the 1999 Act intentionally does not address jurisdiction in respect of a foreign defendant.
High Court decision
The judge determined the contractual interpretation argument in the claimant's favour. He decided that there is no general legal doctrine or policy which prioritises maximising the efficacy of the forum selection agreement and ordinary principles apply, stating that whilst the starting point when interpreting a jurisdiction clause is that only the parties to the contract are covered, the issue remains to be determined by the construction of the particular contract.
In this case, the judge said that the breadth of the jurisdiction clause, commercial common sense, and anomalies which would arise if the clause did not apply were compelling points in the claimant's favour.
The more interesting part of the decision was in respect of the statutory effect of the 1999 Act, which the judge acknowledged is "a controversial topic, involving a contested view of Parliament’s intentions in the 1999 Act, and in relation to some aspects of which the English courts have not spoken consistently".
The judge noted that section 1(4) of the 1999 Act, which provides that it does not confer a right on a third party to enforce a term otherwise than subject to and in accordance with any other relevant terms of the contract. He concluded that if a jurisdiction or arbitration clause is wide enough to apply to disputes between the contracting parties concerning the term relevant to the third party's claim, it will generally be a "relevant term' for the purposes of section 1(4) and hence will be binding.
The court held that whether a jurisdiction clause applies to a third party's claim does not depend on the mutual intention of the contracting parties that the third party should sue in the contractually agreed forum, but rather on whether the clause is "relevant" for section 1(4) purposes. In this case, clause 10.3 specifically conferred rights on Mr Campeau under the 1999 Act, the only jurisdiction clause favoured English courts, and the jurisdiction provision was wide enough to encompass disputes between the contracting parties concerning clause 10.3
Osborne Clarke comment
The decision provides important guidance on the interaction between third-party rights and jurisdiction clauses, confirming that third parties enforcing contractual rights under the 1999 Act are likely to be bound by exclusive jurisdiction clauses even where they are not parties to the contract.
In our view, this is the commonsense result. However, while the decision provides some welcome clarity, the case is a reminder that parties negotiating contracts that contemplate significant third-party rights should consider including express terms relating to the jurisdiction and governing law over such party rights.
