Court Opinion

ID: 168145
Source: CourtListenerOpinion
Date Created: 2010-08-14 16:15:06+00
Date Added: 2024-06-11T09:41:14.317105
License: Public Domain

F IL E D
                                                                    United States Court of Appeals
                                                                            Tenth Circuit
                                         PUBLISH
                                                                        September 20, 2006
                     U N IT E D ST A T E S C O U R T O F A PP E A L S
                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
                                   T E N T H C IR C U IT

OR HA N Y AV UZ ,

               Plaintiff - Appellant ,

       v.                                                   No. 04-5152

61 M M , LTD, an Oklahoma limited
partnership; 61 M M CORP., an
Oklahoma corporation; AD I KA M EL
M OHAM ED, also known as Kamal
Adi; FPM S.A., a corporation, doing
business as FPM Finastate Projects
M anagement S.A., a Swiss
corporation ,

               Defendants - Appellees,

--------------------------------------------

ORHAN YAVUZ,

              Plaintiff - Appellant,

       v.                                            Nos. 04-5188 and 05-5155

61 M M , LTD., an Oklahoma limited
partnership; 61 M M CORP., an
Oklahoma corporation; AD I KA M EL
M OHAM ED, also known as Kamal
Adi; FPM S.A., doing business as
FPM Finastate Projects M anagement
S.A., a Swiss corporation,

              Defendants - Appellees.
         A PPE A L FR O M T H E U N IT ED ST A T ES D IST R IC T C O U R T
                  FO R T H E N . D IST R IC T O F O K L A H O M A
                          (D .C . N O . C V -03-586-E(J) )

Kenneth M ichael Smith, (Robert P. Skeith, with him on the brief), Riggs, Abney,
Neal, Turpen, Orbison & Lewis, Tulsa, Oklahoma, for Plaintiff - A ppellant .

Timothy A. Carney, (James M . Sturdivant, Cason P. Carter, with him on the
brief), Gable & Gotwals, Tulsa, Oklahoma, for Defendants - Appellees, Kamal
Adi and FPM , S.A.

Grant E. Cheadle, Cheadle & Associates, Inc., Tulsa, Oklahoma, for Defendants -
Appellees, 61 M M Corp. and 61 M M Ltd.

Before H A R T Z, M cK A Y , and T Y M K O V IC H , Circuit Judges.

H A R T Z, Circuit Judge.

      Orhan Yavuz, a Turkish citizen, has been involved in various international

business transactions with Kamal Adi, a dual Syrian and Swiss citizen, since the

early 1980s. Frustrated with the treatment of what he considers an investment in

certain real property in Tulsa, Oklahoma (the Tulsa Property), M r. Yavuz has

brought suit against M r. Adi and others, seeking relief under the federal

Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.

§ 1964(c), and a variety of other causes of action based on allegations of

misrepresentations and breach of contract. Title to the Tulsa Property is held by a

                                         -2-
limited partnership, 61 M M , Ltd., whose general partner is 61 M M Corp., an

Oklahoma corporation. The partnership and the corporation are both parties to

this dispute and will be referred to collectively as the 61 M M Defendants. The

remaining defendant who is a party to this appeal is FPM S.A. d/b/a Finastate

Projects M anagement S.A. (FPM ), a Swiss corporation whose principal place of

business is Fribourg, Sw itzerland. Two other defendants, Euroeast Corp. and

Sigofine S.A., both of which are Panamanian corporations, have not been served.

      The district court dismissed the suit for improper venue on the basis of a

forum-selection clause in a 1989 written agreement (the Fiduciary Agreement)

between M r. Yavuz and Finastate SA. (FSM is the successor in interest to

Finastate SA, and the latter will be referred to as FSM in this opinion.) On appeal

M r. Yavuz argues that the district court erred by (1) dismissing the case under the

forum-selection clause; (2) dismissing the case under the doctrine of forum non

conveniens (to the extent that the court relied on that doctrine); and (3)

dismissing the case against the 61 M M Defendants, who were not parties to the

Fiduciary Agreement and who forfeited any objection to venue by not timely

raising it. He also contends that the district court erred in ordering him to execute

documents to remove any cloud on the title to the Tulsa Property.

      W e have jurisdiction under 28 U.S.C. § 1291. W e hold that when an

international commercial agreement has both choice-of-law and forum-selection

                                         -3-
provisions, the forum-selection provision must ordinarily be interpreted under the

law chosen by the parties. W e reverse and remand for further proceedings

regarding the meaning under Sw iss law of the forum-selection clause and whether

dismissal is appropriate under the doctrine of forum non conveniens. W e need

not address M r. Yavuz’s arguments directed specifically at the dismissal of the 61

M M Defendants. Also, we vacate the order requiring M r. Yavuz to execute

documents.

I.    FA C TS A N D PR O C E D U R A L B A C K G R O U N D

      A.     State-C ourt Proceedings

      M r. Yavuz filed suit in the District Court of Tulsa County, Oklahoma, on

June 18, 2002, against Lee James A . Bentley, an individual whom he believed to

control the Tulsa Property. On September 27, 2002, he filed an amended petition

adding the 61 M M Defendants, and dropping Bentley. The 61 M M Defendants

filed an answer, asserted a counterclaim against M r. Yavuz, and moved for

summary judgment. The state court denied the summary-judgment motion on

February 10, 2003. M eanw hile, FPM had filed suit in Switzerland against

M r. Yavuz on December 24, 2002, to enforce his alleged promise to invest further

funds in the Tulsa Property.

      On July 28, 2003, M r. Yavuz filed a Second Amended and Restated Petition

(Second Amended Petition), adding M r. Adi, FPM , Euroeast Corp., and Sigofine

                                         -4-
S.A. as defendants. The Second A mended Petition alleged the follow ing course

of conduct:

      M r. Yavuz first gave “gold, silver and foreign currencies” to M r. Adi and

Euroeast in “the early 1980’s,” Aplt. App. at 58, for “various investment

purposes,” including an interest in the Tulsa Property, id. at 59. According to the

terms of the parties’ investment agreement, outlined in a letter dated February 11,

1981, M r. Yavuz was to have a 20% ownership share in the Tulsa Property.

      At some unspecified point in the 1980s, M r. Yavuz discovered that the

defendants “had misappropriated much of the gold and silver” that he had placed

with them. Id. at 59. He confronted M r. Adi in 1989 about the missing

comm odities, and M r. Adi offered to settle the dispute by compensating

M r. Yavuz in the form of a loan in addition to the 20% interest in the Tulsa

Property. The amount of the loan, about $735,000, was the value of the gold and

silver that M r. A di had “misappropriated,” plus accumulated interest. Id. This

new agreement was memorialized in the December 31, 1989, Fiduciary Agreement

betw een M r. Y avuz and FPM (w hich was controlled and directed by M r. A di).

The full text appears in the Appendix to this opinion.

      The Fiduciary Agreement describes M r. Yavuz’s investment as two assets

held in trust by FPM :

                                         -5-
       -      an investment of 20 % in the share capital of M adonna BV [the
              predecessor of 61 M M Corp.], Curaçao at a market value of
              US$ 201’420.– at December 31, 1989.

       -      a loan of US$ 401’880.– granted to M adonna BV , Curaçao
              with additional accrued interest of US$ 333’238.46 at
              December 31, 1989.

Id. at 131. Article 2 of the Fiduciary Agreement states:

       [Yavuz] undertakes to give all the documents, information and
       technical assistance, that are necessary for [FPM ] to perform its
       mandate.

       In particular it is agreed that [Yavuz] will release [FPM ] from all
       obligations w hich have been contracted as fulfilment of the mandate
       according to article 1 hereinabove.

Id. Article 10 contains the following choice-of-law and forum-selection

provisions:

       This convention is governed by the Swiss law , in particular article
       394 and following of the Swiss Code of Obligation. Place of courts
       is Fribourg.

Id. at 133.

       “Over the next several years,” M r. Yavuz received “very sporadic and

sketchy reports” regarding his investment in the Tulsa property. Id. at 60. In

M ay 1999, nearly 10 years after execution of the Fiduciary Agreement, M r. Yavuz

inquired about the status of the investment “due to the lack of transparency in

reporting to him.” Id. At some unspecified time after this inquiry, M r. Adi and

FPM began “corresponding via facsimile” with representatives of 61 M M Corp.

                                          -6-
and 61 M M Ltd., for the purpose of devising a “strategy” to provide him with

“misleading financial information.” Id. Part of this strategy was to send on

behalf of 61 M M Corp. a letter to M r. Yavuz on FPM letterhead containing

unspecified “false and misleading information” to convince M r. Yavuz that he

would need to pay several hundred thousand dollars “to vest his interest in the

Tulsa property.” Id.

      Communications between M r. Yavuz and the defendants about the property

continued, culminating in a letter dated November 27, 2000, from FPM to

M r. Yavuz. This letter “contained false and misleading accounting data” that

M r. A di and FPM had prepared with the cooperation of the 61 M M Corp., id. at

61, and demanded that M r. Yavuz transfer $874,703 to a bank in Fribourg,

Switzerland, to vest his interest in the Tulsa Property.

      Also during this time, the defendants defrauded and misled M r. Yavuz by

“structuring” the finances of 61 M M Corp. (by “creating layers of affiliate

corporations and entities,” id.) so that his 20% equity interest in 61 M M Corp.

and his $735,000 loan “are essentially worthless,” id. Finally, the defendants

have been selling portions of the Tulsa Property since 1997, receiving over

$800,000 from sales without sharing any profits with him.

       The Second Amended Petition asserted 10 claims based on the foregoing

allegations:

                                          -7-
      (1) Constructive Trust— The defendants’ “denial that [M r. Yavuz] has an

interest in the property,” and their “structuring the corporate ownership of the

property in such a fashion as to deprive him of any value in his investment in the

corporate general partner,” has put them “in a position of ownership of the Tulsa

property which they ought not to, in equity and in good conscience, hold and

enjoy,” entitling him to a constructive trust on the Tulsa Property. Id. at 63.

      (2) Restitution— The defendants were unjustly enriched by having “the use

of [M r. Yavuz’s] invested funds for over twenty years . . . without properly

recognizing [his] investment in the remaining Tulsa property,” entitling him to

restitution of $935,000 plus interest from December 31, 1989. Id. at 63-64.

      (3) Common Law Fraud— The defendants’ communications to M r. Yavuz,

“culminat[ing] in the [letter from FPM ] of November 27, 2000,” constituted

comm on-law fraud entitling him to compensatory damages of $935,000 and

punitive damages of at least $10,000. Id. at 64.

      (4) Constructive Fraud— Even if “the statements made to [M r. Yavuz] by

the Defendants . . . [were] made without an actual fraudulent intent,” they still

“gained an advantage to the foregoing Defendants by misleading [M r. Yavuz] to

his prejudice,” entitling him to damages of at least $935,000. Id. at 65.

      (5) Breach of Implied Contract— The defendants (a) committed an implied

breach of contract when they accepted his money, “entitling him to an appropriate

                                          -8-
share in the profits, losses and assets of [defendant corporations] and/or the

remaining Tulsa Property,” and (b) subsequently “refus[ed] to acknowledge

[M r. Yavuz’s] appropriate and proper share in the entities and/or property,” again

entitling him to damages of at least $935,000. Id. at 65-66.

      (6) Civil Conspiracy— The defendants conspired to obtain $935,000 from

M r. Yavuz through false and fraudulent statements and their acts in structuring

the investment transaction so that his investment would be worthless. He requests

compensatory damages of $935,000, and punitive damages of not less than

$10,000. Id. at 66.

      (7) Breach of Fiduciary Duty— The defendants breached their fiduciary

duty to M r. Yavuz with respect to his investment “based upon the facts set forth

as aforesaid.” Id. at 67. On this claim he requests damages “to the extent of the

amount of his investment with them,” and punitive damages of not less than

$10,000. Id.

      (8) Embezzlement— M r. Yavuz deposited “several hundred thousand

dollars to be used for various purposes, including the investment in the Tulsa

Property,” and the defendants embezzled from him by “appropriat[ing] the sum of

$230,000 of [his] funds for their own use.” Id. at 68. He seeks compensatory

damages of $230,000, and punitive damages of at least $10,000.

                                         -9-
      (9) RICO— The defendants violated RICO by (1) furnishing false and

misleading financial information and (2) diverting to foreign entities controlled

by Adi and FPM certain funds that should have been used to repay M r. Yavuz’s

investments. The “racketeering enterprise” consists of 61 M M Corp. “and the

various foreign entities who are in an affiliate position or in a position of control

of 61 M M Corp.” Id. at 69. “The predicate acts performed by the above named

Defendants which form the basis for the racketeering activity, are numerous

comm unications between the RICO Defendants . . . [and] the Plaintiff . . . denying

his request for accurate accounting information, the furnishing to him of false and

incomplete financial information and the requirement that he pay exorbitant sums

of several hundred thousand dollars in order to vest his investment.” Id. at 70.

H e seeks $935,000 in damages, to be trebled under RICO.

      (10) Accounting— M r. Yavuz requests an accounting “as to all financial

aspects of his investment in the Tulsa property and/or in the above named entities,

including complete information regarding the investment of all other partners or

shareholders of those entities since the inception of those entities.” Id. at 72.

      The 61 M M Defendants filed their answer to the Second Amended Petition

on August 18, 2003, and asserted a counterclaim against M r. Yavuz for alleged

abuse of process. They then removed the case to federal district court on

August 28.

                                          -10-
      B.     M otion to D ism iss

      On November 25, 2003, M r. Adi and FPM responded to the Second

Amended Petition by filing a motion to dismiss on the grounds of improper venue,

forum non conveniens, and failure to state a claim upon which relief can be

granted. M r. Yavuz filed his response on December 23, 2003. The 61 M M

Defendants (who had not previously raised improper venue in their answer or a

motion) filed a document on January 30, 2004, stating that they had no objection

to the motion to dismiss.

      On September 1, 2004, the district court granted the motion to dismiss on

the basis of improper venue. The district court observed that all claims in the

dispute arose from M r. Yavuz’s investment relationship with M r. Adi and FPM ,

which was governed by the Fiduciary Agreement. It stated that Fribourg,

Sw itzerland, would be a more appropriate forum for the dispute than Tulsa,

Oklahoma, because “the only connection these parties have to Tulsa, Oklahoma is

that one or more of the Defendants own real estate here and Yavuz is attempting

to use this proceeding as a prejudgment attachment of the real estate.” Id. at 199.

The court continued:

      The Agreement was negotiated and executed in Sw itzerland and
      witnesses with knowledge of the Agreement are going to be located
      in Switzerland. At the time of the execution of the Agreement, both
      Adi and FPM were residents of Switzerland. FPM is still located in
      Switzerland and Adi is a resident of Syria, although he is still a
      citizen of Sw itzerland and frequently travels to Sw itzerland. Yavuz

                                        -11-
      is a citizen of Turkey and litigation in Sw itzerland is going to be
      much more convenient than litigation in Tulsa, Oklahoma.
      Furthermore, there is litigation between these parties and regarding
      the Agreement which is currently pending in Fourth Circuit Sarine
      W ard, Fribourg, Sw itzerland. The Court finds that the forum
      selection clause in the Agreement is valid and should be honored
      [citing cases]. The disputes between the parties to this action should
      be litigated in Sw itzerland, not Tulsa, Oklahoma.

Id. at 199-200. The district court’s order dismissed the case for improper venue

“as [to] all Defendants,” id. at 200, even though the 61 M M Defendants had not

joined the motion or otherwise sought dismissal of the suit, and indeed had

asserted a counterclaim against M r. Yavuz. In addition, the order stated:

      This Order shall also act as a dismissal of any lis pendens notices
      that have been filed w ith the records of the County Clerk of Tulsa
      County regarding this lawsuit. The Plaintiff is hereby ORDERED to
      execute any documents reasonabl[y] necessary to remove this lawsuit
      as a cloud on the title to any Tulsa County real estate owned by the
      Defendants.

Id.

      M r. Yavuz filed a motion under Fed. R. Civ. P. 60(a) on September 9,

2004. The motion asked the district court to clarify whether it had dismissed the

case “as to all Defendants” and whether it had dismissed the case in its entirety,

including the 61 M M Defendants’ counterclaim against him. Id. at 202. Also, it

protested that the court had not described the documents he was to execute.

M r. Yavuz then filed a timely notice of appeal on September 30. On October 25

we issued an order abating the appeal pending resolution of the Rule 60 motion.

                                        -12-
The court entered an order on November 2, 2004, stating that it had indeed

dismissed all claims and the counterclaim of the 61 M M Defendants. The order

did not clarify what documents were to be executed. M r. Yavuz filed a motion to

vacate this order on November 10, and filed a timely notice of appeal from the

November 2 order on December 2, 2004. W e consolidated the two pending

appeals. On August 8, 2005, the district court denied M r. Yavuz’s m otion to

vacate its order. M r. Yavuz then filed a notice of appeal from that denial on

September 1, 2005. This opinion w ill dispose of all three appeals.

II.   D ISC U SSIO N

      A.     Forum N on Conveniens

      The parties devote substantial portions of their briefs to debating whether

the district court’s dismissal can be affirmed under the doctrine of forum non

conveniens. W e hold, however, that the court did not rule on that ground, and it

would be inappropriate for us to address the matter in the first instance.

      As the Supreme Court has stated:

      Under the federal doctrine of forum non conveniens, when an
      alternative forum has jurisdiction to hear a case, and when trial in the
      chosen forum would establish oppressiveness and vexation to a
      defendant out of all proportion to the plaintiff’s convenience, or
      when the chosen forum is inappropriate because of considerations
      affecting the court’s own administrative and legal problems, the
      court may, in the exercise of its sound discretion, dismiss the case,
      even if jurisdiction and proper venue are established.

                                        -13-
Am. Dredging Co. v. M iller, 510 U.S. 443, 447-48 (1994) (internal quotation

marks, brackets, and ellipses omitted). In our circuit, Gschwind v. Cessna

Aircraft Co., 161 F.3d 602 (10th Cir. 1998), sets forth the manner in which this

determination must be made. “There are two threshold questions in the forum non

conveniens determination: first, whether there is an adequate alternative forum in

which the defendant is amenable to process, and second, whether foreign law

applies.” Id. at 605 (internal citation omitted). If both questions are answered

affirmatively, “the court goes on to weigh the private and public interests bearing

on the forum non conveniens decision.” Id. at 606. The factors relating to private

interests are:

       (1) the relative ease of access to sources of proof; (2) availability of
       compulsory process for compelling attendance of witnesses; (3) cost
       of obtaining attendance of willing non-party witnesses; (4) possibility
       of a view of the premises, if appropriate; and (5) all other practical
       problems that make trial of the case easy, expeditious and
       inexpensive.

Id. Included in the public-interest factors are:

       (1) administrative difficulties of courts with congested dockets which
       can be caused by cases not being filed at their place of origin; (2) the
       burden of jury duty on members of a community with no connection
       to the litigation; (3) the local interest in having localized
       controversies decided at home; and (4) the appropriateness of having
       diversity cases tried in a forum that is familiar with the governing
       law.

Id. Although there is ordinarily a “strong presumption in favor of hearing the

case in the plaintiff’s chosen forum,” a foreign plaintiff’s choice of forum

                                         -14-
“warrants less deference.” Id. “W hen the plaintiff is foreign, the private and

public interest factors need not so heavily favor the alternate forum.” Id.

      The district court’s dismissal order noted some of the factors relevant to

application of the doctrine of forum non conveniens. It recited that Sw itzerland

had the most significant contacts with the parties and the transactions at issue;

that the Fiduciary Agreement was negotiated and signed in Sw itzerland; that

witnesses w ith knowledge of the Fiduciary Agreement “are going to be located in

Sw itzerland”; that some of the parties are Swiss residents, and that M r. Yavuz

resides in Turkey, which is closer to Sw itzerland than Tulsa; and that litigation

betw een the parties has already commenced in Fribourg. Aplt. A pp. at 199-200.

After reciting these factors, however, the district court’s ruling was: “The Court

finds that the forum selection clause in the Agreement is valid and should be

honored. The disputes between the parties to this action should be litigated in

Switzerland, not Tulsa, Oklahoma. The M otion to Dismiss of Adi and FPM is

GRANTED as [to] all Defendants and this case is hereby DISM ISSED pursuant to

Rule 12(b)(3) of the Fed. R. Civ. P.” Id. (internal citations omitted).

      The Order does not cite any caselaw regarding the doctrine of forum non

conveniens, nor do the words “forum non conveniens” appear. Several of the

relevant factors are not mentioned in the order, and the district court did not

engage in the requisite balancing of interests. Although there may be some merit

                                         -15-
in resolving this issue on appeal, we believe the better practice is for the district

court to make the initial ruling. See Pac. Frontier v. Pleasant Grove City, 414

F.3d 1221, 1238 (10th Cir. 2005) (“W here an issue has been raised, but not ruled

on, proper judicial administration generally favors remand for the district court to

examine the issue initially.”). W e therefore remand to the district court for

resolution of this issue.

      B.     Forum -Selection C lause

      Article 10 of the Fiduciary Agreement states: “This convention is governed

by the Swiss law, in particular article 394 and following of the Swiss Code of

Obligation. Place of courts is Fribourg.” A plt. App. at 133. The district court

interpreted the second sentence— the forum-selection provision— to require that

M r. Yavuz bring all the claims in his complaint in a Swiss court. In so ruling, the

court had to resolve several subsidiary questions: (1) Is the forum-selection

provision mandatory or permissive? That is, does it require that the claims be

brought in a Swiss court, or does it simply perm it the claims to be brought there?

(2) Are all of M r. Yavuz’s claims governed by the provision, or only some? For

example, perhaps the contract claims are so governed but the provision does not

govern the tort or RICO claims? (3) Does the clause bind M r. Yavuz with respect

to claims against all the defendants, or with respect to only his claims against

FPM , or perhaps only those against FPM and M r. Adi?

                                          -16-
      To answer those questions, a court must first resolve a preliminary

question: W hat law does it apply to answ er them? This choice-of-law issue is

one of first impression for this court, and, with the exception of a very recent

decision by a district court in our circuit, TH Agriculture & Nutrition, L.L.C. v.

Ace European Group Ltd., 416 F. Supp. 2d 1054 (D. Kan. 2006), and one recent

law-review article, it has received virtually no attention from the federal courts,

or even scholars, in the context of international contracts. As stated in that recent

article: “In practice, and with rare exceptions, United States courts tend not to

engage in explicit choice of law analysis when determining the validity and

enforceability of a given international [forum-selection clause]. Those courts

tend instead to reflexively apply lex fori, even when the contract contains an

explicit choice of law clause selecting the law s of another jurisdiction to govern

the contract as a whole.” Jacob W ebb Yackee, Choice of Law Considerations in

the Validity & Enforcement of International Forum Selection Agreem ents: Whose

Law Applies?, 9 UCLA J. Int’l L. & Foreign Aff. 43, 67 (2004) (internal footnote

omitted) (hereinafter Yackee); see also Linda S. M ullenix, Another Choice of

Forum, Another Choice of Law: Consensual Adjudicatory Procedure in Federal

Court, 57 Fordham L. Rev. 291, 348 (1988) (“In large measure, the scope of

choice-of-law clauses combined with forum-selection clauses has not been

examined in any meaningful fashion [by federal courts].”) (hereinafter M ullenix).

                                         -17-
      Nevertheless, we are not without significant guidance. To begin with,

when a court interprets a contract, as a general matter it applies the law that the

parties selected in their contract. See Restatement (Second) of Conflict of Laws

§ 187 (hereinafter Restatement); id. cmt. e (1971) (“[T]he demands of certainty,

predictability, and convenience dictate that, subject to some limitations, the

parties shall have power to choose the applicable law.”). As we stated in Boyd

Rosene & Associates v. Kansas M unicipal Gas Agency, 174 F.3d 1115, 1121 (10th

Cir. 1999):

      Because conflicts of law are inevitable in a federal system, parties to
      a contract are empow ered to and frequently do choose a particular
      state’s law to apply to the execution and interpretation of the
      contract. Absent special circumstances, courts usually honor the
      parties’ choice of law because two “prime objectives” of contract law
      are “to protect the justified expectations of the parties and to make it
      possible for them to foretell with accuracy what will be their rights
      and liabilities under the contract.” Restatement § 187 cmt. e.

      A forum-selection clause is part of the contract. W e see no particular

reason, at least in the international context, why a forum-selection clause, among

the multitude of provisions in a contract, should be singled out as a provision not

to be interpreted in accordance with the law chosen by the contracting parties.

See Restatement § 204(a) (meaning of ambiguous contractual terms should be

determined “in accordance with the local law of the state chosen by the parties”).

      On the contrary, as we are about to discuss, Supreme Court opinions in

international disputes emphasize the primacy of the parties’ agreement regarding

                                         -18-
the proper forum. That agreement consists of more than just the bare words in the

forum-selection provision. The words may take on different meanings depending

on the law used to interpret them. Thus, when the contract contains a choice-of-

law clause, a court can effectuate the parties’ agreement concerning the forum

only if it interprets the forum clause under the chosen law.

      Turning now to the Supreme Court’s view of forum-selection clauses, the

Court has recognized several considerations compelling deference to the

contracting parties’ choice of a forum in international commercial transactions.

(W e note at the outset that these considerations may not have equal force, or may

be limited by compelling contrary considerations, in the context of domestic

disputes. See generally M ullenix, supra, at 314.) In M /S Bremen, GmBH v.

Zapata Off-Shore Co., 407 U.S. 1 (1972), the Court held enforceable (absent

evidence that enforcement would be unreasonable, unfair, or unjust) a contractual

requirement that the London H igh Court of Justice be the forum for disputes

regarding an agreement by a German corporation to tow an American

corporation’s drilling rig from Louisiana to Italy. Reversing a closely divided en

banc circuit court, the opinion explained:

      For at least two decades we have witnessed an expansion of overseas
      commercial activities by business enterprises based in the United
      States. The barrier of distance that once tended to confine a business
      concern to a modest territory no longer does so. Here we see an
      American company with special expertise contracting with a foreign
      company to tow a complex machine thousands of miles across seas

                                         -19-
      and oceans. The expansion of American business and industry will
      hardly be encouraged if, notwithstanding solemn contracts, we insist
      on a parochial concept that all disputes must be resolved under our
      laws and in our courts. Absent a contract forum, the considerations
      relied on by the Court of Appeals would be persuasive reasons for
      holding an American forum convenient in the traditional sense, but in
      an era of expanding world trade and commerce, the absolute aspects
      of the doctrine of [a circuit precedent holding a forum-selection
      clause unenforceable] have little place and would be a heavy hand
      indeed on the future development of international commercial
      dealings by Americans. W e cannot have trade and commerce in
      world markets and international waters exclusively on our terms,
      governed by our laws, and resolved in our courts.

Id. at 8-9; see also Vimar Seguros y Reaseguros, S.A. v. M /V Sky Reefer, 515 U.S.

528, 537-38 (2000) (quoting portions of the above passage in speaking of

“contemporary principles of international comity and commercial practice”). The

Court said that its approach “accords with ancient concepts of freedom of contract

and reflects an appreciation of the expanding horizons of A merican contractors

who seek business in all parts of the world.” Bremen, 407 U.S. at 11. “The

choice of . . . forum was made in an arm’s-length negotiation by experienced and

sophisticated businessmen, and absent some compelling and countervailing reason

it should be honored by the parties and enforced by the courts.” Id. at 12. The

opinion continued: “There are compelling reasons w hy a freely negotiated private

international agreement, unaffected by fraud, undue influence, or overweening

bargaining power, such as that involved here, should be given full effect.” Id. at

12-13 (internal footnote omitted). “M anifestly much uncertainty and possibly

                                        -20-
great inconvenience to both parties could arise if a suit could be maintained in

any jurisdiction in which an accident might occur or if jurisdiction were left to

any place where the Bremen or [the German corporation] might happen to be

found.” Id. at 13. Therefore,

      [t]he elimination of all such uncertainties by agreeing in advance on
      a forum acceptable to both parties is an indispensable element in
      international trade, commerce, and contracting. There is strong
      evidence that the forum clause was a vital part of the agreement, and
      it would be unrealistic to think that the parties did not conduct their
      negotiations, including fixing the monetary terms, with the
      consequences of the forum clause figuring prominently in their
      calculations.

Id. at 13-14 (internal footnote omitted).

      The Supreme Court has not departed from this approach. In Scherk v.

Alberto-Culver Co., 417 U.S. 506, 519 (1974), the Court treated “[a]n agreement

to arbitrate before a specified tribunal [as], in effect, a specialized kind of forum-

selection clause.” The plaintiff claimed violations of United States securities

laws, and the Court had held in Wilko v. Swan, 346 U.S. 427 (1953), that “an

agreement to arbitrate could not preclude a buyer of a security from seeking a

judicial remedy under the Securities Act of 1933,” Scherk, 417 U.S. at 510.

Nevertheless, the Court enforced “the agreement of the parties in this case to

arbitrate any disputes arising out of their international commercial transaction.”

Id. at 519. Echoing Bremen, the Court wrote:

                                            -21-
       [U]ncertainty [regarding the law applicable to disputes arising out of
       a contract] will almost inevitably exist with respect to any contract
       touching tw o or more countries, each with its own substantive laws
       and conflict-of-laws rules. A contractual provision specifying in
       advance the forum in which disputes shall be litigated and the law to
       be applied is, therefore, an almost indispensable precondition to
       achievement of the orderliness and predictability essential to any
       international business transaction. Furthermore, such a provision
       obviates the danger that a dispute under the agreement might be
       submitted to a forum hostile to the interests of one of the parties or
       unfamiliar w ith the problem area involved.

             A parochial refusal by the courts of one country to enforce an
       international arbitration agreement would not only frustrate these
       purposes, but would invite unseemly and mutually destructive
       jockeying by the parties to secure tactical litigation advantages.

Id. at 516-17 (internal footnote omitted). The Court provided a specific

hypothetical instance of what could happen:

       In the present case, for example, it is not inconceivable that if Scherk
       had anticipated that Alberto-Culver would be able in this country to
       enjoin resort to arbitration he might have sought an order in France
       or some other country enjoining Alberto-Culver from proceeding
       with its litigation in the United States. W hatever recognition the
       courts of this country might ultimately have granted to the order of
       the foreign court, the dicey atmosphere of such a legal no-man's-land
       would surely damage the fabric of international commerce and trade,
       and imperil the willingness and ability of businessmen to enter into
       international commercial agreements.

Id. at 517.

       Similarly, a decade later in M itsubishi Motors Corp. v. Soler Chrysler-

Plym outh, 473 U.S. 614 (1985), the Court held that the circuit court had erred in

                                         -22-
holding that an antitrust claim was not subject to arbitration in accordance with a

provision in an international commercial agreement. The Court explained:

       [W ]e conclude that concerns of international comity, respect for the
       capacities of foreign and transnational tribunals, and sensitivity to
       the need of the international commercial system for predictability in
       the resolution of disputes require that we enforce the parties’
       agreement, even assuming that a contrary result would be
       forthcoming in a domestic context.

Id. at 629.

       To be sure, the above Supreme Court opinions did not address the choice-

of-law issue presented here. In those cases there was no question regarding the

meaning of the contractual forum-selection provision at issue, only its

enforceability. But the same reasoning applies: If the parties to an international

contract agree on a forum-selection clause that has a particular meaning under the

law of a specific jurisdiction, and the parties agree that the contract is to be

interpreted under the law of that jurisdiction, then respect for the parties’

autonomy and the demands of predictability in international transactions require

courts to give effect to the meaning of the forum-selection clause under the

chosen law, at least absent special circumstances (such as, perhaps, the chosen

jurisdiction’s refusal to hear a case that has no ties to the jurisdiction). See

Yackee, supra, at 84-85. In other words, just as the Supreme Court has made

clear that under federal law the courts should ordinarily honor an international

comm ercial agreement’s forum-selection provision, we now hold that under

                                         -23-
federal law the courts should ordinarily honor an international commercial

agreement’s forum-selection provision as construed under the law specified in the

agreement’s choice-of-law provision. The practice, although apparently merely

reflexive, of applying the law of the jurisdiction in which the suit is pending (lex

fori), is unsatisfactory. As one author has expressed the point:

      Lex fori is, in most circumstances and for a number of reasons, a
      poor choice of law to govern an international [forum-selection
      clause]: it risks subjecting the contract to multiple laws, it makes it
      difficult for parties to anticipate at the contract drafting stage which
      law will actually be applied to [the forum-selection clause], it may
      promote forum shopping, and it ignores the parties’ bargained-for
      jurisdictional expectations by overlooking a contract’s explicit or
      im plicit choice of law .

Yackee, supra, at 83 (internal footnotes omitted).

      Turning to the Fiduciary Agreement, the choice-of-forum clause states:

“Place of courts is Fribourg.” A plt. App. at 133. Under American law this

language appears rather ambiguous. W e would be inclined to hold that the clause

is permissive rather than mandatory, see K & V Scientific Co. v. Bayerische

M otoren Werke Aktiengesellschaft, 314 F.3d 494 (10th Cir. 2002), and it is hardly

obvious what claims, against what parties, are governed by the clause. W e might

reach the same conclusions under Swiss law, but perhaps not. See Yackee, supra,

at 61 (noting that European Union law presumes forum-selection clauses are

exclusive). The parties have not addressed the issue.

                                         -24-
      W hat is not ambiguous is that the parties agreed that Sw iss law governs the

Fiduciary Agreement. Accordingly, we hold that the choice-of-forum provision in

that contract must be construed under Sw iss law. W e recognize that we have

some discretion to decide to determine ourselves what Swiss law provides. See

Fed. R. Civ. P. 44.1; Swiss Credit Bank v. Balink, 614 F.2d 1269, 1272 (10th Cir.

1980) (applying Swiss law on appeal). But the better practice is to remand to

district court to permit the parties to present the applicable law and perhaps to

develop further any facts that may be relevant under that law. See SEC v. Dunlap,

253 F.3d 768, 777 (4th Cir. 2001) (remanding to district court with instructions to

determine “what Costa Rican law actually provides, and its significance, if any, in

this matter”); Banque Paribas v. Hamilton Indus. Int’l, Inc., 767 F.2d 380, 386

(7th Cir. 1985) (remanding with instructions to “determine, in accordance with

Rule 44.1 of the Federal Rules of Civil Procedure, whether there was any

violation of the guarantee, when that guarantee is interpreted in according with

Saudi Arabian law”). W e also note that the issue may be mooted by a

determination that venue is inappropriate under the forum non conveniens

doctrine.

      C.     E xecuting D ocum ents

      Finally, M r. Yavuz contends that the district court erred when, as part of its

order granting the motion to dismiss, it ordered him to execute documents to

                                         -25-
remove any cloud on the title to the Tulsa Property. The district court’s order

stated:

       This Order shall also act as a dismissal of any lis pendens notices
       that have been filed w ith the records of the County Clerk of Tulsa
       County regarding this lawsuit. The Plaintiff is hereby ORDERED to
       execute any documents reasonabl[y] necessary to remove this lawsuit
       as a cloud on the title to any Tulsa County real estate owned by the
       Defendants.

Aplt. App. at 200 (emphasis added). W e are perplexed by the order. It did not

relate to any lis pendens filed by M r. Yavuz, because all of them had been

expunged. Defendants’ brief on appeal does not explain what M r. Yavuz was to

do in response to the order or how the district court had the authority to issue the

order when it was dismissing the case. W e therefore vacate the order.

III.      C O N C L U SIO N

       W e REVERSE the judgment of the district court and REM AND for further

proceedings consistent with this opinion.

                                         -26-
                                    APPENDIX

      The full text of the 1989 A greement is as follow s:

                           FID UCIARY AGREEM ENT

                                      between

                                Orhan YAVUZ
                             Cumhuryet Caddesi 20/6
                               Taksim - Istanbul
                                    Turkey

hereinafter referred to as “TRUSTOR”

                                         and

                                 FINASTA TE SA
                                 Rue St-Pierre 18

                                   1700 Fribourg

hereinafter referred to as “FINA STATE”

                                      Article 1

TRUSTOR hereby instructs FINASTATE to acquire and to administer, in its
name, but for the account and risk of TRUSTOR, the follow ing assets:

-     an investment of 20% in the share capital of M adonna BV, Curaçao at a
      market value of US$ 201’420.— at December 31, 1989.
-     a loan of US$ 401’880.— granted to M adonna BV , Curaçao with additional
      accrued interest of US$ 333’238.46 at December 31, 1989.

These assets, held by FINASTATE or registered in its name, in fiduciary capacity,
for the account of TRUSTOR, remain the property of TRUSTOR.

TRUSTOR has, or will make available to FINASTATE, the necessary funds in
order to cover the investments and the related expenses.

                                         -27-
                                      Article 2

TRUSTOR undertakes to give all the documents, information and technical
assistance, that are necessary for FINASTATE to perform its mandate.

In particular it is agreed that TRUSTOR will release FINASTATE from all
obligations w hich have been contracted as fulfilment of the mandate according to
article 1 hereinabove.

                                      Article 3

FIN ASTATE gives no guarantee nor takes any responsibility in respect of this
operation. It is well understood that all risks of exchange and transfer as well as
risks of disposal and of fiscal actions, are entirely to the charge of TRUSTOR.

                                      Article 4

TRUSTOR accept[s] that FINASTATE acts as trustee at the risk of TRUSTOR.

In addition, TRUSTOR releases FINASTATE, and all persons acting on behalf of
FINASTATE in the execution of this agreement, from all responsibility.

TRUSTOR will indemnify FINASTATE and all persons acting on behalf of
FINASTATE in the execution of this agreement, against all claims made by third
parties in direct or indirect relation with the present agreement.

FINASTATE will only act on clear instructions given by TRUSTOR. In urgent
circumstances, or if TRUSTOR cannot be contacted in time, FINASTATE may
undertake whatever steps necessary in accordance with its judgment in order to
safeguard the interests of TRUSTOR.

                                      Article 5

The funds deriving from the assets held through this agreement will be transferred
to TRUSTOR after said funds have been cashed by FINASTATE, on the
understanding that TRUSTOR will communicate to FINASTATE how payment
has to be made.

In the case of FINASTATE not receiving the funds, FINASTATE transfers the
claim or asset to TRUSTOR and so will be released from all other obligations.

                                         -28-
                                       Article 6

TRUSTOR authorizes FINASTATE to represent the shares held as trustee at the
shareholders meeting, without having in fact the obligation to use the violating
rights attached to these shares according to the instructions received from
TRUSTOR or according to the judgement of FINASTATE in order to safeguard
the interests of TRUSTOR.

                                       Article 7

In consideration for carrying out this mandate, FINASTATE is entitled to a
comm ission of 5 % per annum, calculated on the total assets held as trustee at
market value.

                                       Article 8

FINASTATE is authorized to communicate the existence of this agreement to the
competent fiscal authorities, if duly requested by them. FINASTATE is also
authorized to give a detailed list of the assets held in fiduciary capacity on behalf
of TRUSTOR.

                                       Article 9

This agreement may be cancelled at any time, without mention of the reason, by
both parties, with notice of one month to be given by registered mail to the
address of the other party as per this agreement.

In such a case, on condition that the claim of FINASTATE against TRUSTOR is
completed, FINASTATE will transfer the assets as per article 1 with all attached
rights to TRUSTOR, or to another person nominated by TRUSTOR, by giving the
related documentation or title and against declaration of release.

The notice to this contract will not affect transactions which are in progress.

                                      Article 10

This convention is governed by the Swiss law, in particular article 394 and
following of the Swiss Code of Obligation. Place of courts is Fribourg.

Fribourg, December 31, 1989

                                         -29-
      Orhan YA VUZ             FINASTA TE SA
         /s/                       /s/

Aplt. App. at 131-33.

                        -30-