IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

BAXTER INTERNATIONAL INC.,

Plaintiff,

v.

AXA VERSICHERUNG AG,

Defendant.

)

) 

) 

)

)

)

) No. 11 C 9131

)

)

)

)

MEMORANDUM OPINION AND ORDER

Plaintiff Baxter International Inc. (“Baxter”) has sued

defendant AXA Versicherung AG (“AXA”) for declaratory relief and

breach of contract. This dispute arises from underlying claims

against Baxter in what the parties refer to as the “Second

Generation Litigation,” a series of multi-district, international

lawsuits against Baxter concerning allegedly contaminated blood

products. Baxter seeks coverage under an insurance policy for

defense and settlement expenses related to the underlying Second

Generation Litigation. AXA moves to dismiss the complaint on the

basis of a forum selection clause or, alternatively, the forum

non conveniens doctrine. For the following reasons, AXA’s motion

is denied.1

Baxter is an Illinois-based company incorporated in Delware. 

In 1996, Baxter acquired the Austria-based, Swiss company Immuno

Group (“Immuno”). At the time of the acquisition, Immuno was

1

 Plaintiff’s motion to file a sur-response is granted.
insured by the German insurer Colonia Versicherung AG (“Colonia”)

and Baxter’s subsidiary, Baxter AG, Vienna, was named as an

additional policy holder on Immuno’s policy (“Immuno policy”). 

The parties also added an endorsement stating that Baxter would

be an additional insured on the Immuno policy with respect to

claims arising out of products distributed by Immuno prior to the

Baxter acquisition. In 1997, Colonia was acquired and changed

its name to AXA Versicherung AG. At all times, the Immuno policy

has contained a choice of law provision and a forum selection

clause stating: “German law applies to any disputes arising from

this insurance policy. The place of jurisdiction is Cologne.”2

Defendant argues that the complaint should be dismissed on

account of this forum selection clause or, alternatively, based

on the forum non conveniens doctrine.3

In determining whether plaintiff is bound by the forum

selection clause here, I must answer two questions: (1) is the

forum selection clause valid and mandatory; and (2) if so, is it

enforceable. Generally, in determining whether a forum selection

clause in a contract is valid, the law of the jurisdiction

specified in a choice of law provision will govern. Abbott

Laboratories v. Takeda Pharm. Co., Ltd., 476 F.3d 421, 423 (7th

2

 The Immuno policy was written in German, and the translation

quoted here was attached to the complaint by plaintiff. The

parties dispute some aspects of the translation, but where

relevant these are discussed below.

3 The issue of personal jurisdiction, also raised in

defendant’s motion, has not yet been briefed.

2
Cir. 2007) (“Simplicity argues for determining the validity and

meaning of a forum selection clause, in a case in which interests

other than those of the parties will not be significantly

affected by the choice of which law is to control, by reference

to the law of the jurisdiction whose law governs the rest of the

contract in which the clause appears.”); see also Rock Energy Coop. v. Village of Rockton, 614 F.3d 745, 750 (7th Cir. 2010)

(applying the law specified by the parties as governing their

memorandum of understanding to a clear forum selection clause).

Plaintiff’s argument that Abbott also requires consideration

of federal procedural law in determining the meaning and

enforceability of the forum selection clause is unpersuasive. In

a later decision, the Seventh Circuit characterized Abbott as

holding “that the validity of a forum-selection clause depends on

the law of the jurisdiction whose rules will govern the rest of

the dispute.” IFC Credit Corp. v. United Bus. & Indus. Federal

Cred. Union, 512 F.3d 989, 991 (7th Cir. 2008). That the Seventh

Circuit in Abbott discussed federal law as a point of comparison

with the law of the jurisdiction specified in the contract’s

choice of law provision does not alter the ultimate holding of

that case. Here, the determinative body of law for analyzing the

forum selection clause is specified in a choice of law provision,

the validity of which is not challenged. Therefore, under

3
binding Seventh Circuit precedent, I must look to German law in

analyzing the issues presented by defendant’s motion.

According to defendant, even though the choice of law clause

identifies “German law” as the applicable body of law governing

disputes arising from the insurance policy, for all practical

purposes this means that I must apply the law of the European

Union (“EU”) governing jurisdictional matters. Specifically,

defendant identifies Council Regulation 44/2001, 2000 O.J. (L 12)

6 (EC) (herinafter “Brussels I Regulation”), as the relevant body

of EU law. Plaintiff argues that it would be anathema for a

district court in the U.S. to apply the Brussels I Regulation

because it is a body of procedural law that does not apply

outside of the EU. Even if I accept the proposition that the

validity of a forum selection clause would be a procedural issue

in EU and/or German courts, I have already determined that

Seventh Circuit law requires that I look to the law of the

jurisdiction identified in the choice of law provision to

determine the validity and enforceability of the forum selection

clause in this case. Whether the jurisdiction identified—here,

Germany—considers the validity and enforceability of a forum

selection clause to be a procedural or substantive issue does not

change the fact that the Seventh Circuit has already sent us to

Germany for purposes of determining whether the forum selection

clause is valid and enforceable. Plaintiff concedes that the

4
Brussels I Regulation is the body of law governing jurisdiction

and forum selection clauses (or, jurisdiction clauses, as they

are referred to in the EU) in Germany, and I will look to its

rules in determining how EU/German law would interpret the forum

selection clause in the insurance policy at issue here.

The parties’ experts agree that under Article 23(1) of the

Brussels I Regulation there is a rebuttable presumption of

exclusivity for jurisdiction agreements.4

 In other words, a

forum selection clause is mandatory unless there is evidence of

the parties’ contrary intent. The parties’ experts spend some

energy on defending their competing translations of the relevant

language in the insurance policy: Plaintiff has translated the

forum selection clause as “The place of jurisdiction is Cologne,”

whereas defendant contends that the more accurate translation is

“The place of judicial jurisdiction shall be Cologne.” However,

as Prof. Zekoll notes, the distinction is one without a

difference, as plaintiff has not presented any evidence showing

that its preferred translation would impact whether there is a

rebuttable presumption of exclusivity under Article 23(1) of the

Brussels I Regulation. Instead, the thrust of plaintiff’s

argument is that it has overcome the presumption of exclusivity

because the jurisdiction clause did not conform to the

4 Plaintiff does not dispute the assessment of defendant’s

expert, Prof. Joachim Zekoll, that the jurisdiction clause meets

the other requirements of Article 23(1).

5
requirements of the Brussels Convention, which was in force at

the time the original insurance policy was issued in 1990 and

also when plaintiff was added as an additional insured in 1996. 

Plaintiff argues that because the agreement would not have been

valid at the time the parties executed the policy, it is not

valid now. Plaintiff’s expert, Prof. Ronald Brand, states that

there is no case law interpreting Article 23 of the Brussels I

Regulation and plaintiff has introduced no other evidence showing

that any of the parties to the insurance policy agreed that the

jurisdiction clause was not to have exclusive effect. By

contrast, in his rebuttal declaration, Prof. Zekoll cites to

competent evidence, including a decision of the Higher Regional

Appellate Court of Celle, Germany, showing that either party’s

translation would be captured by the presumption of exclusivity

in Article 23(1) and that the relevant inquiry is whether the

jurisdiction clause is valid and exclusive under the Brussels I

Regulation, regardless of when the insurance policy was issued. 

I conclude plaintiff has failed to overcome the presumption of

exclusivity and the jurisdiction clause is valid and exclusive

under the relevant German/EU law.

I now turn to the question of whether the clause is

enforceable against plaintiff. By way of background, Section 3

of Chapter II of the Brussels I Regulation (Articles 8-14) sets

forth the rules relating to where jurisdiction may be proper in

6
matters relating to insurance. The parties agree that Article 13

allows for jurisdiction agreements among parties to an insurance

contract only in limited circumstances and that the forum

selection clause in the insurance policy here only fits into the

situation described in Article 13(5). Article 13(5) provides

that a jurisdiction agreement between parties to an insurance

contract will be valid if it “relates to a contract of insurance

in so far as it covers one or more of the risks set out in

Article 14.” Brussels I Regulation, art. 13(5). In relevant

part, Article 14 refers to “all ‘large risks’” and the parties

here assume that both the current policyholder, Immuno Management

AG, and the additional insured, Baxter, meet the financial

criteria for “large risks.” See Brussels I Regulation, art.

14(5).

Though the forum selection clause here technically falls

under the situation defined in Article 13(5), plaintiff’s expert,

Prof. Brand, says the European Court of Justice’s (“ECJ”)

decision in Société Financière et Industrielle du Peloux v. Axa

Belgium, et al., Case C-112/03, E.C.R. I-3707 (2005) (hereinafter

“SFIP”), prevents its enforcement. In SFIP, the ECJ considered

whether a jurisdiction clause that was valid under Article 12(3)

of the Brussels Convention, the predecessor to the Brussels I

Regulation, was enforceable against an insured other than the

policyholder. Article 12(3) of the Brussels Convention allowed

7
for a policyholder and an insurer to enter into a valid

jurisdiction agreement if both parties were residents of the same

EU state and agreed to bring disputes in the courts of that

state. The Brussels I Regulation, which went into force during

the pendency of the SFIP litigation, contains a similar provision

in Article 13. The difference between the Brussels Convention

and the Brussels I Regulation is that the Brussels I Regulation

introduced the “large risk” provision for the first time. 

Plaintiff, and Prof. Brand, reason that because SFIP held that a

jurisdiction clause that was otherwise valid under Article 12 of

the Brussels Convention was not enforceable against an insured

who was not a party to the insurance policy, the forum selection

clause here, which appears to be otherwise valid under Article 13

of the Brussels I Regulation, is not enforceable against

plaintiff, a co-insured that was not originally a party to the

insurance policy.

Defendant does not dispute that the ECJ is the final

interpreter of the Brussels Convention and the Brussels I

Regulation, nor does defendant contend that the ECJ’s rulings are

not binding on EU member states, including Germany. Instead,

based on the fact that the “large risk” provision did not exist

in the Brussels Convention, defendant argues that SFIP is

inapposite. Defendant first contends that SFIP is inapplicable

merely because it interprets the Brussels Convention and not the

8
Brussels I Regulation. However, a comparison of Article 12 of

the Brussels Convention and Article 13 of the Brussels I

Regulation reveals that, with the exception of “large risk”

provision, the circumstances under which parties may enter into

jurisdiction agreements are identical. There is therefore no

reason on the face of the Brussels I Regulation that would

invalidate the SFIP holding. Further, as Prof. Brand points out,

the Brussels I Regulation had already come into force when the

SFIP decision was issued and the ECJ referenced the Brussels I

Regulation without limiting the applicability of its holding. 

Relying heavily on the ECJ’s characterization of the

additional insured in that case as being the “economically

weakest party,” defendant also contends that because both the

policyholder and additional insured here are “large risks,”

plaintiff cannot be considered an economically weak party and is

not entitled to the protections afforded to insureds by the

Brussels I Regulation. But the ECJ’s decision in SFIP did not

rely on a finding that the co-insured in that case was

economically weak. Further, as plaintiff argues in its surresponse, “large risk” insureds are still protected by the

Brussels I Regulation’s rules governing proper forum and are only

afforded greater freedom under the new regime to opt out of those

rules. It remains that a “large risk” insured must affirmatively

9
agree to a forum otherwise prohibited by the Brussels I

Regulation. 

Defendant’s expert, Prof. Zekoll, admits that there is no

case law yet that addresses the applicability of the SFIP

decision to either the Brussels I Regulation or the “large risk”

exception contained therein but identifies two commentators who

hypothesize that “large risks” may present an exception to the

rule that a jurisdiction agreement is not binding on an insured

who was not a party to the insurance contract. However, neither

defendant’s expert nor the commentator he discusses adequately

addresses two points raised by Prof. Brand: (1) the SFIP decision

reinforced the doctrine of separability, which provides that

forum selection clauses are separable from the rest of the

contract and that parties must separately consent to such

clauses; and (2) the SFIP decision strengthened protections for

insureds, even while giving “large risks” the ability to contract

around the default jurisdictional rules. Considering these

points, I conclude that under the binding ECJ decision in SFIP,

an otherwise valid jurisdiction clause, even one that is valid

under the “large risk” provision, cannot be enforced against an

insured who was not a party to the insurance contract. 

Therefore, the forum selection clause here is unenforceable

against plaintiff.

10
Defendant argues that even if the forum selection clause is

unenforceable, I should still dismiss the case under the forum

non conveniens doctrine. “The common law doctrine of forum non

conveniens allows a trial court to dismiss a suit over which it

would normally have jurisdiction if it best serves the

convenience of the parties and the ends of justice.” Clerides v.

Boeing Co., 534 F.3d 623, 627-28 (7th Cir. 2008) (quoting In re

Bridgestone/Firestone, Inc., 420 F.3d 702, 703 (7th Cir. 2005)). 

A court should only grant a motion to dismiss under forum non

conveniens if the plaintiff’s chosen forum is “oppressive and

vexatious to the defendant, out of all proportion to the

plaintiff’s convenience.” In re Bridgestone/Firestone, Inc., 420

F.3d at 703 (internal quotation marks and citations omitted). If

the party seeking dismissal is able to identify an adequate

alternative forum, a court must decide “to keep or dismiss the

case by weighing various private and public factors.” Id. at

704. Plaintiff does not dispute that the threshold inquiry is

satisfied, as Cologne, Germany would constitute an adequate and

available alternative forum. 

Among the relevant private interest factors, defendant

claims that they favor Cologne because there are a number of

witnesses located in Germany. According to defendant, these

include not only employees and former employees of AXA but also

employees and former employees of Immuno and Jauch & Hübener, the

11
insurance broker that negotiated and issued the policy. 

Plaintiff counters that its own witnesses are located in the U.S.

and that defendant has not supported its argument regarding the

number and types of witnesses that would need to be available

throughout the litigation. Plaintiff also points out that the

attorneys who handled the underlying litigation, as well as the

relevant documents, are located in Illinois. It is obvious that

litigating here would be inconvenient for defendant, just as

litigating in Germany would be inconvenient for plaintiff. One

party will have witnesses who will need to travel no matter where

this case is litigated. But defendant has not shown that the

inconvenience would prove oppressive or vexatious. On balance,

then, the private factors weigh equally for both parties. 

As for the public interest factors, defendant argues

primarily that because the Immuno policy is written in German and

because German law will be applied to this dispute, Cologne is

the favored forum. Defendant also argues that the German court

system has a strong public interest in hearing this case, which

depends on German contract and insurance law. However, the mere

fact that a court will have to apply foreign law, alone, is “not

sufficient to warrant dismissal when a balancing of all relevant

factors shows that the plaintiff’s chosen forum is appropriate.” 

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 260 n. 29 (1981). 

Without more, defendant has failed to show that the public

12
interest factors require dismissal of this case under the forum

non conveniens doctrine.

For the foregoing reasons, defendant’s motion to dismiss on

the grounds of the forum selection clause and the forum non

conveniens doctrine is denied.

 ENTER ORDER:

 ____________________________

 Elaine E. Bucklo

 United States District Judge

Dated: November 7, 2012

13