The World Gets Even Flatter: Fourth Circuit Applies English Law and Enforces English Forum Selection Clause

The Fourth Circuit ruled today in Albemarle Corp. v. AstraZeneca UK Ltd. that it was required to interpret the forum selection clause negotiated by the parties under English law, which meant that the clause would be read as requiring litigation to be brought in an English court, even though the clause would have been  deemed permissive under American law and would have allowed the lawsuit at issue to be filed in the South Carolina court where it had in fact been filed.

The contract, which required AstraZeneca to buy an ingredient for an anesthetic from Albemarle, contained a forum selection clause which said that the contract "shall be subject to English Law and the jurisdiction of the English High Court."

In affirming the dismissal of the case, the Fourth Circuit aligned itself with six other circuits and held that "a federal court interpreting a forum selection clause must apply federal law in doing so."  Federal law on this subject is that 'an agreement conferring jurisdiction in one forum will not be interpreted as excluding jurisdiction elsewhere unless it contains specific language of exclusion.'"

English law?  In this case it is as different from federal law as my breakfast this morning was from bangers and mash.  '"Under English law, when the parties designate the English High Court as an appropriate forum, the designation is mandatory and exclusive."  Thus, litigation in the High Court was required per English law.

Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.