National Industries Group v. Carlyle Investment Management L.L.C.
2013 Del. LEXIS 253
| Del. | 2013Background
- Carlyle Investment Mgmt L.L.C. and TC Group filed May 28, 2010 in Delaware Court of Chancery seeking an anti-suit injunction to enforce a forum‑selection clause in the Subscription Agreement between CCC and NIG, preventing Kuwait litigation.
- The Court entered a July 18, 2011 Default Judgment enjoining NIG from pursuing actions contrary to the Delaware forum clause.
- NIG moved to vacate under Rule 60(b)(4) arguing lack of personal and subject matter jurisdiction; motion denied October 11, 2012.
- NIG had previously sued in Kuwait (November 2009) alleging the Subscription Agreement was void for lack of Kuwaiti securities license, arguing Kuwaiti law governs and defeats the Delaware forum clause.
- The Subscription Agreement provides exclusive Delaware jurisdiction and Delaware law (with a blue-sky carve-out for securities laws). The Kuwaiti liquidation of CCC left investors with no recovery, but Carlyle sought only injunctive relief to enforce the forum clause, not damages.
- The Court of Chancery’s enforceability of the forum clause, its subject‑matter jurisdiction to grant equitable relief, and the propriety of denying vacatur under Rule 60(b)(4) and 60(b)(6) are the central issues on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether personal jurisdiction supports vacating the default | Carlyle argues forum clause enforces Delaware jurisdiction | NIG contends Kuwaiti law voids the agreement, invalidating jurisdiction | Denied; forum clause valid and jurisdiction preserved |
| Whether the forum clause supports injunctive relief for enforcement | Carlyle seeks anti-suit injunction to enforce Delaware forum | NIG argues remedy lies in Kuwait or is inadequate | Enforceable; subject-matter jurisdiction supported by Ingres/El Paso framework |
| Whether Rule 60(b)(4) vacatur was proper for lack of jurisdiction | NIG cannot defeat injunction by arguing Kuwait forum | Lack of personal or subject matter jurisdiction voids judgment | Not proper; jurisdictional issues resolved in favor of Carlyle |
| Whether Rule 60(b)(6) relief is warranted given time-bar | NIG seeks relief for inequitable results | NIG acted willfully to avoid Delaware proceedings | Denied; willful conduct and delay foreclose relief |
| Whether comity defeats enforcement of a contractual forum clause | Enforcement aligns with contract rights | Comity could require respect for foreign proceedings | Contractual forum clause controls; comity not a bar |
Key Cases Cited
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (forum-selection clauses presumptively valid)
- El Paso Natural Gas Co. v. TransAmerican Natural Gas Corp., 669 A.2d 36 (Del. 1995) (forum clause must be enforced unless unreasonable or invalid for fraud/overreaching; El Paso overruled on this point in later decision)
- In re CA, Inc./Ingres Corp., 8 A.3d 1143 (Del. 2010) (subject-matter jurisdiction to enjoin violations of a valid forum-selection clause; enforcing clause preferred)
- Huffington v. T.C. Grp., LLC, 637 F.3d 18 (1st Cir. 2011) (affirmed enforcement of a Delaware forum clause; discusses adequacy of remedy at law)