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Current Developments in the Commercial Divisions of the
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Posted: March 22, 2017

Defendant Waived Forum Selection Clause By Failing Timely to Object to Forum

On March 8, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in Jiangsu Jintan Liming Garments Factory v. Empire Imports Group, Inc., 2017 NY Slip Op. 30469(U), holding that a defendant had waived enforcement of a forum selection clause by failing timely to object to the plaintiff’s choice of forum, explaining:

It is well established that forum selection clauses are prima facie valid and enforceable unless shown by the resisting party to be unreasonable. However, a forum selection clause may be waived. A forum selection clause defense is a defense founded on documentary evidence.

A party waives a forum selection clause defense by failing to raise it in an answer or a pre-answer motion to dismiss.

Here, defendants, who admittedly were aware of the defense, failed to raise the forum selection clause as a defense in their answer, did not move to dismiss on that ground, and did not amend their answer as of right to assert the defense. Defendants failed to raise the forum selection clause at their preliminary conference or during nearly four months of discovery, forcing Jiangsu to incur unnecessary litigation expenses and wasting the court’s time. Nor was the defense raised in opposition to Jiangsu’s motion for summary judgment. Defendants have waived the defense.

(Internal citations omitted).

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