Wednesday, January 5, 2011
In international commercial litigation news, the U.S. Court of Appeals for the Fourth Circuit recently issued a decision regarding an ambiguous forum selection clause that may provide guidance to practitioners of international commercial law. In Albemarle Corp. v. AstraZeneca UK Ltd., No. 10-1000 (4th Cir. Dec. 8, 2010), AstraZeneca UK Ltd., based in the United Kingdom, contracted with Albemarle International Corp., a Virginia corporation with manufacturing facilities in South Carolina, for the purchase of a chemical used in the manufacture of an anesthetic. A dispute arose between the parties regarding the terms of the contract and Albemarle filed suit in state court in South Carolina. AztraZeneca removed the case to federal court based on diversity jurisdiction. It then filed a motion to dismiss based on a contractual choice of law and forum selection clause which provided that the contract ‘shall be subject to English Law and the jurisdiction of the English High Court.' Under U.S. law, selection of a non-U.S. court is usually presumed to be non-exclusive unless the language of the contract clearly states to the contrary. Here, AstraZeneca successfully argued that another rule requires the court to give effect to the intent of the parties. The selection of an English court, combined with the selection of English law, was enough to overcome the presumption against exclusivity thus requiring the matter to be litigated in the U.K. More details about the case may be found here.