Commercial Division Blog

Posted: February 5, 2017 / Categories Commercial, Forum Selection Clause

Agreements' Forum Selection Clauses Did Not Bind Non-Signatories

On January 30, 2017, Justice Singh of the New York County Commercial Division issued a decision in Sustainable Pte Ltd. v. Peak Venture Partners LLC, 2017 NY Slip Op. 30202(U), holding that defendants were not bound by the forum selection clauses of agreements they did not sign, explaining:

To establish jurisdiction, plaintiffs rely on the Surf Agreement, the letter agreement between Doronin and Amanat, the pledge agreements between PHRL and Sherway, and the Pontwelly Financing Agreement. However, Eliasch, Djangoly, and PHRGL are not parties to any of these agreements and are therefore not subject to the forum-selection clauses contained therein. For the same reasons, ARGL is not subject to personal jurisdiction, as it is not a party to the Surf Agreement, letter agreement, or the pledge agreements.

The only remaining document to which ARGL is a party is the Pontwelly Financing Agreement but plaintiffs are not signatories thereto. Therefore, plaintiffs may only invoke the forum-selection clause in the Pontwelly Financing Agreement if (i) plaintiffs were third-party beneficiaries, (ii) the agreement was part of a global transaction and plaintiffs were parties to other underlying related agreements executed simultaneously, or (iii) plaintiffs were closely related to one of the signatories. Plaintiffs have not sufficiently pied any of the foregoing. Therefore, plaintiffs have not established personal jurisdiction based on any of the cross-moving defendants consent to jurisdiction in any agreement.

(Internal quotations and citations omitted) (emphasis added).