961 F.3d 1209
D.C. Cir.2020Background
- DSCI (New Jersey corp.) contracted with the Kingdom of Saudi Arabia to perform wireless-communications work in Saudi Arabia; contract governed by Saudi law, Arabic records, and payment in riyals.
- Contract included a forum-selection clause: “The grievance council shall be assigned for settlement of any disputes or claims arising from the execution of this cont[r]act, or related to this contract, or resulting from its dissolution” (the Board of Grievances, Saudi administrative court).
- DSCI sought payment of two unpaid invoices (~$2.1M); after Saudi refusal to pay, DSCI sued in D.C. Superior Court.
- Kingdom removed to federal court and moved to dismiss on forum non conveniens based on the forum-selection clause.
- The district court granted dismissal; on appeal the D.C. Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause is applicable/valid/enforceable | Did not contest applicability or validity | Clause covers disputes related to the contract and is enforceable | Clause is applicable, valid, and enforceable |
| Whether the clause is mandatory or permissive | Clause lacks explicit exclusivity; therefore permissive | Language “shall be assigned for settlement” requires exclusive forum (Board) | Clause is mandatory (requires litigation before Board of Grievances) |
| Whether public-interest/adequacy concerns overcome a mandatory clause | Saudi forum unsafe, nontransparent, biased, procedurally deficient | Parties agreed to Saudi forum; Board has interest and competence; contract selects Saudi law | DSCI failed to show public-interest factors overwhelmingly disfavour enforcement; dismissal affirmed |
Key Cases Cited
- Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49 (forum-selection clauses enforced through forum non conveniens; mandatory clauses receive controlling weight)
- Azima v. RAK Inv. Auth., 926 F.3d 870 (D.C. Cir. 2019) (treats enforcement standard for forum-selection clauses; distinguishes mandatory vs permissive clauses)
- Marra v. Papandreou, 216 F.3d 1119 (D.C. Cir. 2000) (similar "shall be settled" language construed as mandatory)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007) (clause interpretation is basic contract interpretation)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (public-interest considerations in forum non conveniens analysis)
- D&S Consulting, Inc. v. Kingdom of Saudi Arabia, 322 F. Supp. 3d 45 (D.D.C. 2018) (district court opinion granting dismissal on forum non conveniens)