ICICI Bank Ltd. v. Essar Global Fund Ltd.
565 B.R. 241
S.D.N.Y.2017Background
- Plaintiff ICICI Bank (Singapore branch) seeks to enforce guarantee agreements under a 2010/2014 loan facility against four Essar affiliate guarantors for roughly $530 million after borrower Essar Steel Minnesota LLC (ESML) defaulted and later filed bankruptcy in Delaware (Jan. 2016).
- Defendants removed the state-court breach-of-guarantee action to SDNY under the bankruptcy removal statute, 28 U.S.C. § 1452(a), asserting it is "related to" ESML’s Delaware bankruptcy; plaintiff did not move to remand.
- Each guaranty contains a New York choice-of-law clause and a venue/forum-selection provision designating Manhattan federal and state courts and waiving venue objections and forum non conveniens challenges.
- Defendants moved to transfer the case to the District of Delaware under 28 U.S.C. § 1404(a) and § 1412, arguing the related bankruptcy and efficiency/public-interest considerations favor adjudication in Delaware.
- The Court concluded the dispute is a non-core, prepetition contract action and therefore analyzed transfer under § 1404(a); it found the forum-selection clauses valid, mandatory, and enforceable and held public-interest factors did not overcome them.
- Result: defendants’ motion to transfer to Delaware was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal under § 1452(a) was proper and court has jurisdiction | Removal was not contested by plaintiff; case is related to ESML bankruptcy | Removal proper because case is "related to" the bankruptcy | Removal was proper; federal court has related-to jurisdiction under § 1334(b) per In re Cuyahoga standard |
| Which transfer statute applies (§ 1404(a) vs § 1412) | Apply § 1404(a) because the proceeding is non-core | § 1412 should govern (more deferential to transfer) | Case is non-core; § 1404(a) applies and analysis is substantially similar to § 1412 |
| Enforceability/effect of forum-selection clauses (New York) | Parties bargained for New York forum; clause is mandatory and enforceable | Clauses are permissive and should not bar transfer to Delaware | Clauses are valid, were reasonably communicated, became mandatory once plaintiff sued in designated forum, and carry strong weight under Atlantic Marine |
| Whether public-interest or bankruptcy-related factors overcome forum clause | Public-interest factors do not outweigh the contractual forum-selection clause here | Delaware is presumed appropriate due to bankruptcy; Delaware courts better positioned to handle bankruptcy-related discovery and issues | Public-interest considerations are insufficient to overcome the forum-selection clause; transfer denied |
Key Cases Cited
- Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (2013) (forum-selection clauses get controlling weight; adjust § 1404(a) analysis)
- M/S Bremen v. Zapata OffShore Co., 407 U.S. 1 (1972) (forum clauses enforceable absent strong showing to set aside)
- In re Manville Forest Prods. Corp., 896 F.2d 1384 (2d Cir. 1990) (presumption favoring district where bankruptcy pending for bankruptcy-related proceedings)
- In re Cuyahoga Equip. Corp., 980 F.2d 110 (2d Cir. 1992) (related-to bankruptcy jurisdiction if outcome might conceivably affect estate)
- Aguas Lenders Recovery Grp. v. Suez, S.A., 585 F.3d 696 (2d Cir. 2009) (waiver of venue and forum non conveniens can render clause mandatory)