1 16-2689-cv F5 Capital v. RBS Securities Inc.



### UNITED STATES COURT OF APPEALS **FOR THE SECOND CIRCUIT**



## SUMMARY ORDER

**R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT**  **. C**  **ITATION TO A SUMMARY ORDER**

**FILED ON OR AFTER J** **ANUARY 1,**  **2007, IS PERMITTED AND IS GOVERNED BY**  **F EDERAL**  **R ULE OF**  **A PPELLATE**  **P ROCEDURE**  **32.1 AND THIS COURT**  **’ S**  **L OCAL**  **R ULE**  **32.1.1. W**  **HEN CITING A SUMMARY**

**ORDER IN**  **A DOCUMENT**  **FILED WITH**  **THIS COURT**  **, A**  **PARTY MUST**  **CITE EITHER**  **THE F**  **EDERAL A** **PPENDIX**

**OR AN**  **ELECTRONIC DATABASE**  **( WITH**  **THE NOTATION**  **“ SUMMARY**  **ORDER ”).**  **A PARTY**  **CITING A**  **SUMMARY**

**ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL .** 
**At a stated term of the United States Court of Appeals for** 1 **the Second Circuit, held at the Thurgood Marshall United States** 2 **Courthouse, 40 Foley Square, in the City of New York, on the** 3 **6 th** **day of June, two thousand seventeen.** 4
5 **PRESENT: DENNIS JACOBS,** 6 **DEBRA ANN LIVINGSTON,** 7 **RAYMOND J. LOHIER, JR.,** 8 **Circuit Judges.** 9
10
- - - - - - - - - - - - - - - - - - - -X 11 **F5 CAPITAL,** 12 **Plaintiff-Appellant,** 13
14 **-v.- 16-2689-cv** 15
16 **RBS SECURITIES INC.,** 17 **Defendant-Appellee,** 18
19 **DEPOSITORY TRUST COMPANY,** 20 **Defendant.** 21
22
- - - - - - - - - - - - - - - - - - - -X 23
24 **FOR APPELLANT:** MARK C. RIFKIN; Wolf Haldenstein 25 Adler Freeman & Herz LLP, New York, 26
NY. 272 1 David A. Slossberg; Hurwitz, 2 Sagarin, Slossberg & Knuff, LLC, 3 Milford, CT. 4
5 **FOR APPELLEES:** JEFFREY R. BABBIN, Ivana D. Greco, 6 Robert S. Hoff; Wiggin and Dana 7 LLP, New Haven and Stamford, CT. 8
9 Appeal from orders of the United States District Court for 10 the District of Connecticut (Bryant, J.). 11
12 **UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED AND** 13 **DECREED**that the judgment of the district court be **AFFIRMED**

. 14
15 Plaintiff F5 Capital appeals from the judgment of the United 16 States District Court for the District of Connecticut (Bryant, 17 J.) dismissing the complaint on the ground of forum non 18 conveniens, citing the forum selection clause in an earlier 19 settlement agreement. We review de novo the district court’s 20 dismissal under a forum selection clause “except where the 21 decision is based on factual findings, which we review for clear 22 error.” Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 23 2014). We assume the parties’ familiarity with the underlying 24 facts, procedural history, and issues presented for review. 25

Plaintiff F5 Capital is a Cayman Islands corporation owned 26 by TMT Co. Ltd., a privately held Taiwanese shipping company. 27 In 2007, TMT opened a “Forward Freight Agreement Clearing 28 Account” with the Royal Bank of Scotland plc (“RBS”). In 29 satisfaction of a margin call that RBS made against that account, 30 TMT sent RBS a share certificate (which had been issued to F5) 31 for 3,000,000 shares of a company called Star Bulk Carriers Corp. 32 RBS held the certificate as collateral, and eventually 33 transferred it to its indirect subsidiary, defendant RBS 34 Securities Inc. (“RBS Securities”). 35

In 2010, F5 and several related entities sued RBS in England. 36 The 2012 settlement agreement provided, inter alia, for F5 and 37 related entities to pay a certain sum to RBS and for RBS to return 38 the 3,000,000 shares of Star Bulk. The agreement also included 39 a forum selection clause: 403 13.2. The Parties agree that the courts of England have 1 exclusive jurisdiction to hear and decide any action 2 or proceedings, and/or to settle any disputes, which 3 may arise out of or in any way relate to this Agreement 4 or its formation and, for these purposes, each party 5 irrevocably submits to the jurisdiction of the courts 6 of England. 7

App’x 26. After the agreement was signed, Star Bulk announced 8 a 15:1 reverse split--converting the 3,000,000 shares into 9 200,000 shares--and paid dividends, with which RBS (at F5’s 10 direction) bought additional shares. 11

In 2014, before the shares were returned, F5 sued RBS 12 Securities (but not RBS itself) in the District of Connecticut, 13 pleading claims premised upon RBS Securities’ possession of the 14 shares and F5’s entitlement to them under the settlement 15 agreement with RBS. The shares were returned after the 16 complaint was filed, mooting some claims; F5 avers that it 17 retains a valid claim for an accounting, relating to interest 18 and dividend payments. 19

**1.** To determine whether to enforce a forum selection 20 clause, we consider: 21

(1) whether the clause was reasonably communicated to 22 the party resisting enforcement; (2) whether the 23 clause is mandatory or permissive

. . . ; and (3) whether 24 the claims and parties involved in the suit are subject 25 to the forum selection clause. If [so] . . . , it is 26 presumptively enforceable. A party can overcome this 27 presumption only by (4) making a sufficiently strong 28 showing that enforcement would be unreasonable or 29 unjust, or that the clause was invalid for such reasons 30 as fraud or overreaching. 31

Martinez, 740 F.3d at 217 (quotation marks and citations 32 omitted). It is undisputed that the clause was reasonably 33 communicated and is mandatory. 34

F5 argues against enforcement principally because RBS 35 Securities was not a party to the settlement agreement. However, 364 a non-signatory to a contract containing a forum 1 selection clause may enforce the forum selection 2 clause against a signatory when the non-signatory is 3 “closely related” to another signatory. In such 4 instances, the relationship between the non-signatory 5 and that (latter) signatory must be sufficiently close 6 that the non-signatory’s enforcement of the forum 7 selection clause is “foreseeable” to the signatory 8 against whom the non-signatory wishes to enforce the 9 forum selection clause. 10

Magi XXI, Inc. v. Stato della Citta del Vaticano, 714 F.3d 714, 11 723 (2d Cir. 2013) (citation and footnote omitted). This rule 12 “prevent[s] parties to contracts from using evasive, formalistic 13 means lacking economic substance to escape contractual 14 obligations.” Id. at 722 (quotation marks omitted). 15

RBS Securities was not a signatory to the settlement 16 agreement, but it is closely related to a signatory (its parent), 17 and its enforcement of the forum selection clause was foreseeable 18 because (among other reasons) the disputed conduct was performed 19 at least in part on RBS’s behalf. Even if, as F5 alleges, RBS 20 Securities’ identity was unforeseeable, F5’s claims arise from 21 the performance (or non-performance) of RBS’s obligations under 22 the settlement agreement; it was therefore foreseeable that some 23 RBS instrumentality involved in the execution of the agreement 24 might enforce the forum selection clause. 25

**2.** For the foregoing reasons, the forum selection clause 26 is presumptively enforceable. F5 has not overcome this 27 presumption by making a sufficiently strong showing that 28 enforcement would be unreasonable or unjust. F5 argues that 29 enforcement would be unjust because English courts would not 30 have personal jurisdiction over RBS Securities; but that 31 argument was not timely raised in the district court (it was 32 first raised in a motion for reconsideration) and it is made 33 now in conclusory fashion. Even if it were properly raised 34 below, and assuming arguendo that it is correct, F5 has made 35 no argument that it is owed relief that cannot be achieved in 36 litigation against RBS. F5 therefore has not shown that 37 enforcement of the forum selection clause would be unreasonable 38 or unjust. 395 Accordingly, and finding no merit in appellant’s other 1 arguments, we hereby **AFFIRM** the judgment of the district court. 2

FOR THE COURT: 3 CATHERINE O’HAGAN WOLFE, CLERK 4