Sabal Ltd. v. Deutsche Bank AG, 209 F. Supp. 3d 907

Background

Sabal, a Texas limited partnership, entered swap documents with Deutsche Bank and established two securities accounts at Deutsche Bank Securities Inc. (DBSI) under a Securities Account and Control Agreement (SACA). The SACA (New York law) gives Deutsche Bank exclusive control over the secondary collateral account and contains a mandatory New York forum-selection clause.
Sabal and Deutsche Bank also executed ISDA-based Swap Documents (Master Swap Agreement, Schedule, CSA, Confirmation) governed by New York law; the Master Swap Agreement contains a permissive New York forum-selection clause and a merger clause.
Disputes: Deutsche Bank took an “Independent Amount” and locked Sabal’s accounts, withholding about $4.5M in collateral; and Deutsche Bank (as Calculation Agent) used a disputed formula (allegedly inserting a “minus 1”) that produced an 8.5% floating rate, leading to contested payments and notices of default.
Sabal sued in the Western District of Texas seeking declaratory relief, conversion, and breach of contract; Deutsche Bank and DBSI later filed suit in S.D.N.Y. and Deutsche Bank moved in Texas to transfer venue or dismiss.
Key contract question: whether the SACA’s mandatory forum-selection clause applies to Sabal’s claims (including declaratory relief concerning collateral control) despite the separate Swap Documents and Master Swap Agreement merger clause.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a forum-selection clause governs this suit	Sabal: Master Swap Agreement/merger clause or subject-specific swap clause controls; SACA clause is superseded or inapplicable	DB: SACA’s mandatory forum-selection clause applies to disputes "arising out of or relating to" the SACA and accounts	The SACA clause is mandatory and applies to Sabal’s claims relating to control of the securities accounts
Whether the Master Swap Agreement’s merger clause voids or precludes the SACA/forum clause	Sabal: merger clause and parol evidence rule bar use of SACA clause	DB: SACA is an antecedent, separate-subject contract; merger clause does not revoke SACA	Merger clause does not void or supersede the SACA; parol evidence rule inapplicable because different subject matter
Whether the Master Swap Agreement’s forum clause allows Sabal to litigate in Texas	Sabal: Master Swap Agreement permits proceedings in any jurisdiction (non-exclusive) so Texas suit is permissible	DB: Even if Master Swap clause is permissive, the SACA’s mandatory clause requires New York for SACA-related claims	The Master Swap clause is permissive; it does not override the SACA’s mandatory forum clause for SACA-related claims
Whether to transfer under 28 U.S.C. § 1404(a) given valid forum-selection clause	Sabal: public-interest factors or other equities justify keeping case in Texas	DB: Atlantic Marine requires enforcement of valid forum-selection clause absent extraordinary public-interest reasons	Court: Transfer to S.D.N.Y. ordered; Sabal failed to show extraordinary circumstances to defeat transfer

Key Cases Cited

Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (U.S. 2013) (forum-selection clauses generally enforceable via §1404(a); plaintiff’s forum choice merits no weight)
In re Volkswagen AG, 371 F.3d 201 (5th Cir. 2004) (traditional private/public factors in transfer analysis)
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (forum-selection clauses presumptively valid absent strong cause)
Barnett v. DynCorp Int’l, L.L.C., 831 F.3d 296 (5th Cir. 2016) (federal law governs enforceability; state choice-of-law rules govern clause interpretation)
Haynsworth v. The Corporation, 121 F.3d 956 (5th Cir. 1997) (factors for unreasonableness challenge to forum-selection clause)
Goldlawr, Inc. v. Heiman, 369 U.S. 463 (U.S. 1962) (district court may transfer venue even if it lacks personal jurisdiction)
Marinechance Shipping, Ltd. v. Sebastian, 143 F.3d 216 (5th Cir. 1998) (determine clause scope by reference to contract language)