601 F. App'x 43
2d Cir.2015Background
- Midamines SPRL (Congo company) opened and maintained bank accounts at Antwerp Diamantse Bank (ADB) in Belgium; Midamines Illinois and Hassan Abbas (pro se) sued KBC Bank NV (KBC) and ADB in New York state and federal courts alleging wrongful dishonor of checks, fraud, unjust enrichment, money laundering, and racketeering.
- The ADB banking agreement signed by Midamines Congo included a mandatory forum selection clause requiring disputes be litigated in Belgium.
- Plaintiffs pursued the action in the Southern District of New York; the district court dismissed the complaint on forum non conveniens grounds, enforcing the Belgium forum selection clause.
- Plaintiffs appealed only as to KBC; they later withdrew any appeal against ADB.
- Plaintiffs argued (1) KBC—a non-signatory—cannot enforce ADB’s forum clause, (2) the clause does not cover the claims/parties, and (3) enforcement would violate New York UCC and public policy; they also sought judicial notice of various documents.
- The Second Circuit reviewed the district court’s dismissal de novo (factual findings for clear error), affirmed enforcement of the clause against KBC, and denied the motion for judicial notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can KBC (non-signatory) invoke ADB’s forum selection clause? | KBC cannot enforce a clause in an agreement it did not sign. | KBC may enforce it because KBC and ADB are closely related and claims arise from same transaction. | Forfeited below but, alternatively, enforceable: non-signatory may invoke clause where closely related and claims arise from same transaction. |
| Does the forum selection clause cover the claims and parties here? | Clause does not apply to plaintiffs’ claims or to Abbas/Midamines Illinois/holders in due course. | Clause covers claims tied to Midamines Congo accounts and expressly applies to relevant third parties. | Clause applies: checks relate to Midamines Congo accounts; clause binds relevant third parties including plaintiffs. |
| Is the forum selection clause unenforceable as contrary to New York UCC or public policy? | Enforcement would violate New York UCC and public policy, making clause unjust or unreasonable. | Clause is presumptively enforceable; plaintiffs did not show fraud/overreaching or heavy burden to refuse enforcement. | Arguments forfeited on appeal; even considered, plaintiffs failed to meet heavy burden to show unfairness or invalidity—clause enforceable. |
| Should appellate court take judicial notice of additional news/Congo documents not presented below? | Court should take judicial notice of these documents to support plaintiffs’ position. | Documents are irrelevant or were not part of district-court record; appellate consideration inappropriate absent extraordinary circumstances. | Denied: news items irrelevant; Congo documents not in record and no extraordinary circumstances to admit them on appeal. |
Key Cases Cited
- Martinez v. Bloomberg LP, 740 F.3d 211 (2d Cir. 2014) (standard for forum non conveniens dismissal reviewing clause enforcement)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007) (four-factor test for enforcing forum selection clauses)
- Magi XXI, Inc. v. Stato della Citta del Vaticano, 714 F.3d 714 (2d Cir. 2013) (non-signatory closely related entities may enforce forum clause)
- In re Nortel Networks Corp. Sec. Litig., 539 F.3d 129 (2d Cir. 2008) (issues not raised below are forfeited on appeal)
- IBM Corp. v. Edelstein, 526 F.2d 37 (2d Cir. 1975) (appellate courts generally will not consider evidence not part of trial record absent extraordinary circumstances)
- United States v. Bleznak, 153 F.3d 16 (2d Cir. 1998) (judicial notice inappropriate for matters irrelevant to disposition)
- McBride v. BIC Consumer Prods. Mfg. Co., 583 F.3d 92 (2d Cir. 2009) (issues raised first in reply are ordinarily not considered)