Cases on Jurisdiction and Forum Selection Clauses - Stewart McKelvey

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CASES ON JURISDICTION AND FORUM SELECTION CLAUSES – JAN. 2012CONTRACTUAL CLAUSE JURISDICTIONS SUMMARY OF DECISIONc. T-10) and any provincial or federal legislationgoverning franchising which now exists or whichmay become law. Franchisee agrees that anyaction arising out of or relating to the relationship,rights, or obligations of the parties herein shall bebrought in the Province or in any State or U.S.Federal court of general jurisdiction whereFranchisor’s principal business address is thenlocated and Franchisee irrevocably submits to thejurisdiction of such courts and waives anyobjection it may have to either the jurisdiction orvenue of such court.” (at para. 8)Expedition Helicopters Inc. v. Honeywell Inc., 2010 ONCA 351“CHOICE OF LAW. THIS AGREEMENT SHALLBE GOVERNED, CONTROLLED ANDINTERPRETED UNDER THE LAW OF THESTATE OF ARIZONA, EXCLUDING ITSCONFLICT OR CHOICE OF LAW PROVISIONS.The parties (i) agree that any state or federal courtlocated in Phoenix, Arizona shall have exclusivejurisdiction to hear any suit, action or proceedingarising out of or in connection with this Agreement,and consent and submit to the exclusivejurisdiction of any such court in any such suit,action or proceeding and (ii) hereby waive, andagree not to assert, by way of motion, as adefense, or otherwise, in any such suit, action orproceeding to the extent permitted by thePlaintiff – OntarioDefendant – Delawareincorporated under the laws of Nova Scotia and theagreement dealt with contractual obligations to beperformed in Nova Scotia. The proceeding had asubstantial connection to Nova Scotia. Strong causewas shown because all the Defendants wereresidents of Nova Scotia; none of them had a realand substantial connection to Texas. Furthermore,the witnesses were residents of Nova Scotia or otherCanadian provinces.Overall, it would be less costly to have the trial inNova Scotia rather than Texas. There was also aclaim in tort in this particular case and since theforum selection clause only dealt with claims arisingout of the agreement, the tort issue could and shouldbe dealt with in the place where the activity occurred(Nova Scotia).Held: Forum selection clause upheld.Full weight must be given to a forum selectionclause, particularly in the commercial context. ThePlaintiff had the burden of showing “strong cause”why the forum selection clause should not beenforced, but did not discharge this burden.There are minimal factors which may justifydeparture from a forum selection clause in acommercial agreement: (i) fraud or improperinducement; (ii) the Court in the designated forumrefuses to accept jurisdiction or is unable to deal withthe claim; (iii) the claim or the circumstances are2426503.v2Page 3
CASES ON JURISDICTION AND FORUM SELECTION CLAUSES – JAN. 2012CONTRACTUAL CLAUSE JURISDICTIONS SUMMARY OF DECISIONapplicable law, that the suit, action or proceedingis brought in an inconvenient forum, that thevenue of the suit, action or proceeding isimproper, or that this Agreement or any of thetransactions contemplated hereby may not beenforced in or by such courts.” (at para. 5)outside what was reasonably contemplated by theparties; (iv) a fair trial is no longer expected in theselected forum due to subsequent, unanticipatedevents; or (v) public policy considerations.(at para. 24)Fujitsu Consulting (Canada) Inc. v. Themis Program Management & Consulting Limited,2007 BCSC 1376“This Agreement shall be governed and construedin accordance with the laws of the Province ofBritish Columbia, without regard to choice of lawprinciples. The parties agree that the sole venuefor legal actions related to this Agreement shall bethe Supreme Court of British Columbia.”(at para. 19)Plaintiff – British ColumbiaDefendant – OntarioHeld: Forum selection clause upheld.The clause was a true forum selection clause (asopposed to a non-exclusive attornment clause).There was no reason to deny enforcement under theCourt Jurisdiction and Proceedings Transfer Act.There was no public interest issue because eitherparty could enforce a judgment in either province.The parties’ intentions were clear when they madethe contract.The Court set out factors to consider under the“strong cause” test as follows: “[1] where theevidence on the issues of fact is situated or morereadily available…; [2] to what jurisdiction either partyhas the greatest connection …; [3] whether … thereare any procedural or substantive issue[s] that theparties want to take advantage of …; and [4] whethereither party would be prejudiced by having to conductthe litigation in other than its preferred jurisdiction.”(at paras. 32-35)2426503.v2Page 4
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Cases on Jurisdiction and Forum Selection Clauses - Stewart McKelvey

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