Italian Forum Selection Clause Contained In Order Confirmation Form Upheld

In Allied Dynamics Corp. v. Kennametal, Inc., 12-CV-5904 (JFB)(AKT) (E.D.N.Y. Aug. 5, 2014), Judge Joseph F. Bianco granted defendants’ motion to dismiss plaintiff’s claims for breach of contract and tort based on improper venue. Plaintiff, a New York manufacturer of turbine parts, had ordered blade parts from defendant, an Italian company, for gas turbine assembly. Plaintiff alleged that defendant had failed to provide goods of the quality and quantity promised.
When plaintiff filed suit in New York, defendants asserted that the parties had chosen Milan, Italy, as the exclusive forum for disputes. This forced the court to determine, first, which documents constituted the parties’ agreement, and, second, whether that agreement included the forum selection clause. The court resolved these questions by applying the United Nations Convention on Contracts for the International Sale of Goods (“CISG”). After an evidentiary hearing, the court held that plaintiff’s initial purchase orders constituted offers but defendants’ order confirmations—which included the forum selection clause in dispute, among other general terms and conditions—constituted rejections and counteroffers that plaintiff was deemed to have accepted under the CISG when it failed to object within fifteen days of receipt of each confirmation.
But that did not end the inquiry. Even valid forum selection clauses can be overcome if the partyresisting enforcement can show that enforcement would be “unreasonable or unjust, or that the clause is invalid for reasons such as fraud or overreaching.” Slip op. 15 (internal quotation and citation omitted). The court found no evidence of fraud or overreaching and concluded that the Italian forum would not deprive plaintiff of a remedy. As a result, Judge Bianco dismissed the case in favor of the Italian courts.