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Chancery Dismisses LLC Dispute Based on Forum Selection Clause Requiring Louisiana Jurisdiction and Arbitration

By Francis G.X. Pileggi

PPF Safeguard LLC v. BCR Safeguard Holding LLC, C.A. No. 4712-VCS (Del. Ch. July 29, 2010), read opinion here.

Brief Overview

Although no new law was announced in this case, the analysis concludes that all the claims are either subject to an arbitration clause or are subject to a mandatory forum selection clause requiring suit to be filed in Louisiana. In addition to the foregoing two provisions, the agreements between the parties had a third permissive (not exclusive) forum clause for Delaware but that was not controlling. The Court described the three overlapping different fora provisions as an 'inefficient and convoluted exercise of bargaining liberty . . . .'

Key "Take-Away" Legal Principles

Although the Court acknowledged that because of the overlapping forum selection clauses it was not entirely clear whether certain claims were covered by certain of the forum selection clauses, nonetheless the Court reasoned that dismissal was still required in order to avoid violating the applicable selection clauses neither of which required a Delaware forum. See footnote 59 for cases cited to support the deference that Delaware Courts give generally to forum selection clauses.

 

Full post as published by Delaware Corporate and Commercial Litigation Blog on August 07, 2010 (boomark / email).