The Court of Appeals on Tuesday of last week, in Speedway
Motorsports Int'l Ltd. v. Bronwen Energy Trading, Ltd., [lexis.com
subscribers may access the enhanced version of this opinion] unwound a
year old decision by the Business Court. In that decision, Judge Diaz had
ruled that a Defendant bank which had issued a letter of credit was bound to
litigate in Switzerland a crossclaim involving the letter of credit. The judge
dismissed the claims against the Bank, relying on a choice of forum clause
specifying that litigation would take place in Geneva. The forum
selection clause was contained in a secondary guarantee of amounts drawn on the
letter of credit, a guarantee to which the Bank was not a party.
The Business Court had found the third party claims to be
closely related to the letter of credit transactions that were at issue and
therefore subject to the Swiss forum selection clause. Judge Diaz based
his decision partly on cases where a non-signatory to an arbitration agreement
was held to be obligated to arbitrate.
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Carolina business law and the day-to-day practice of business litigation in
North Carolina courts.
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