Commercial Litigation and Arbitration

Forum Selection Clause — Governing Law

When parties include in their contract a choice of law provision selecting foreign law to govern ‛formation, validity and enforcement“ of contract, does that law — or does some U.S. law — govern interpretation of the contract’s forum selection clause? Deciding this issue of first impression in the Sixth Circuit, District Judge George Caram Steeh ruled in Global-Link, LLC v. Karamtech Co., 2007 U.S. Dist. LEXIS 33570 (E.D. Mich. May 8, 2007), that the chosen foreign law is governing. The Court relied on the Tenth Circuit’s holding in Yavuz v. 61 MM, Ltd., 465 F.3d 418, 427-28 (10th Cir. 2006), that federal courts should apply the law governing the contract to interpret its forum selection clause, and distinguished an older Sixth Circuit decision, General Elec. Co. v. G. Siempelkamp GmbH & Co., 29 F.3d 1095 (6th Cir. 1994), which applied state and federal law of the United States to interpret a forum selection clause without discussing or giving any reason for not applying German law, despite the fact that the contract provided that all matters under the contract were to be governed by the law of Germany. The Global Link Court concluded that: ‛Looking to local law to interpret the forum selection clause was not the holding of the [General Electric] case.“

Share this article:


Recent Posts