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Conflict of Laws - Conflicts by legal area - Contracts - Choice of law - Expressly chosen by terms of contract - Interpretation

Thursday, November 17, 2016 @ 7:00 PM  

Appeal by the plaintiff from a decision of a motions judge granting a stay of proceedings based on a forum selection clause. The appellant sued the respondent company, its principals and a related company for wrongful termination of an Exclusive Sales Agreement to which the appellant and respondent company were parties. The agreement contained a forum selection clause that any disputes would be arbitrated in Germany. The appellant argued the motions judge erred in finding that the language of the forum selection clause was broad enough to capture both the contract and tort claims pleaded against the principal and in relying on the forum selection clause to stay the action against the respondents who were not parties to the Agreement.

HELD: Appeal dismissed. The motion judge did not err in interpreting the scope of the forum selection clause. The language of clause was broad enough to include, within the term “any disputes”, claims relating to any stage of the agreement’s life-cycle, including the wrongful termination and breach of duty of good faith claims pleaded by the appellant. The appellant’s claims of wrongful termination and breach of the duty of good faith all concerned the performance and termination of the contract between the parties. They clearly fell within the scope of the clause. The broad forum selection clause covering “any disputes” applied not only to contract claims, but also tort claims that arose from the contractual relationship. The motions judge did not err in staying the action against the respondents who were non-parties to the agreement. Even though the related company and the individual respondents were not parties to the agreement, the claims pleaded against them all arose out of the same transactions and occurrences and raised common questions of fact and law linked to the claims pleaded against the respondent company’s principal.