Ira C. Wolpert practices law in Bethesda, Maryland, specializing in complex business, commercial and bankruptcy matters. He is a member of the bars of the District of Columbia, Maryland and Virginia, and has authored numerous articles on the topic of forum-selection clauses and other legal matters.
Summary Choice of law clause are not binding courts since forum clauses involve procedural issues and application of substantive law to determine if the clause is mandatory or permissive-two separate and distinct concepts. Creative counsel continues to litigate the interpretation and application of forum and venue selection clauses. This chapter explores recent case law and the concepts involved in applying choice of law clauses in arbitration matters.
Introduction The U.S. Supreme Court has held that personal rights can be waived, and therefore personal jurisdiction can be the subject of negotiations between the parties.1 This enables contracting parties to negotiate where disputes that arise between them will be litigated or arbitrated. However, as this article demonstrates, forum-selection clauses in arbitration agreements can also become the subject of a dispute. This can lead to collateral litigation that increases the cost and time involved in arbitration. Thus, it is important to draft a forumselection clause that reflects the explicit intent of the parties.
That intent could be to make a particular forum mandatory or permissive. A mandatory clause will clearly indicate the intention of the parties to make a particular jurisdiction exclusive. Clauses reciting that the parties “consent” or “submit” to the jurisdiction of a particular forum are considered to be permissive.