Forum Selection Clauses

• Author: International Law Group
• Pages: 10-

Page 10

Biosafety, U.S.A., Inc. (Applicant) petitioned the Commercial Court in London to set aside or to stay proceedings filed there by X, the Respondent. Respondent had hailed Applicant into an English court on a claim for breach of contract. Applicant is a company incorporated in the U.S. while X is a United Kingdom company. X was a manufacturer of chemical products in the U. K. while Applicant was under contract to market the items in the U.S.

Their distribution contract included a non-exclusive English jurisdiction clause. Since entry into the contract, Antec International Ltd., a U.S. company, had become the owner of X's assets. Applicant contended that the U.S. instead of the U.K. was the proper forum in which X and Applicant should litigate their dispute.

The Commercial Court dismisses the application. It could not find a strong or overwhelming reason to justify an English Court to depart from the choice-of-forum clause in the contract. The fact that Applicant and X had freely negotiated the distribution agreement and the forum clause, generates a strong prima facie case for English jurisdiction.

In the Court's view, the relevant factors would not include factors of convenience or inconvenience which the parties could have foreseen at the time they were negotiating the distribution agreement. Thus, the parties made their deal presumably realizing that, in case of a litigation in London, Applicant would have to transport some witnesses and/or documents from the U.S. to the U. K.

Nor is there merit in Applicant's contention that the fact that a U.S...