Court Opinion

ID: 4174629
Source: CourtListenerOpinion
Date Created: 2017-06-06 15:03:59.06487+00
Date Added: 2024-06-11T07:47:01.521845
License: Public Domain

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

                         UNITED STATES COURT OF APPEALS
                             FOR THE SECOND CIRCUIT

                                  SUMMARY ORDER
     RULINGS  BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
     FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
     APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY
     ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX
     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.

 1        At a stated term of the United States Court of Appeals for
 2   the Second Circuit, held at the Thurgood Marshall United States
 3   Courthouse, 40 Foley Square, in the City of New York, on the
 4   6th day of June, two thousand seventeen.
 5
 6   PRESENT: DENNIS JACOBS,
 7            DEBRA ANN LIVINGSTON,
 8            RAYMOND J. LOHIER, JR.,
 9                          Circuit Judges.
10
11   - - - - - - - - - - - - - - - - - - - -X
12   F5 CAPITAL,
13            Plaintiff-Appellant,
14
15                -v.-                                           16-2689-cv
16
17   RBS SECURITIES INC.,
18            Defendant-Appellee,
19
20   DEPOSITORY TRUST COMPANY,
21            Defendant.
22
23   - - - - - - - - - - - - - - - - - - - -X
24
25   FOR APPELLANT:                          MARK C. RIFKIN; Wolf Haldenstein
26                                           Adler Freeman & Herz LLP, New York,
27                                           NY.

                                                1
 1
 2                                 David A. Slossberg; Hurwitz,
 3                                 Sagarin, Slossberg & Knuff, LLC,
 4                                 Milford, CT.
 5
 6   FOR APPELLEES:                JEFFREY R. BABBIN, Ivana D. Greco,
 7                                 Robert S. Hoff; Wiggin and Dana
 8                                 LLP, New Haven and Stamford, CT.
 9
10        Appeal from orders of the United States District Court for
11   the District of Connecticut (Bryant, J.).
12
13        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED AND
14   DECREED that the judgment of the district court be AFFIRMED.
15
16        Plaintiff F5 Capital appeals from the judgment of the United
17   States District Court for the District of Connecticut (Bryant,
18   J.) dismissing the complaint on the ground of forum non
19   conveniens, citing the forum selection clause in an earlier
20   settlement agreement. We review de novo the district court’s
21   dismissal under a forum selection clause “except where the
22   decision is based on factual findings, which we review for clear
23   error.” Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir.
24   2014). We assume the parties’ familiarity with the underlying
25   facts, procedural history, and issues presented for review.

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

36        In 2010, F5 and several related entities sued RBS in England.
37   The 2012 settlement agreement provided, inter alia, for F5 and
38   related entities to pay a certain sum to RBS and for RBS to return
39   the 3,000,000 shares of Star Bulk. The agreement also included
40   a forum selection clause:

                                     2
 1            13.2. The Parties agree that the courts of England have
 2            exclusive jurisdiction to hear and decide any action
 3            or proceedings, and/or to settle any disputes, which
 4            may arise out of or in any way relate to this Agreement
 5            or its formation and, for these purposes, each party
 6            irrevocably submits to the jurisdiction of the courts
 7            of England.

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

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

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

22            (1) whether the clause was reasonably communicated to
23            the party resisting enforcement; (2) whether the
24            clause is mandatory or permissive . . . ; and (3) whether
25            the claims and parties involved in the suit are subject
26            to the forum selection clause. If [so] . . . , it is
27            presumptively enforceable. A party can overcome this
28            presumption only by (4) making a sufficiently strong
29            showing that enforcement would be unreasonable or
30            unjust, or that the clause was invalid for such reasons
31            as fraud or overreaching.

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

35        F5 argues against enforcement principally because RBS
36   Securities was not a party to the settlement agreement. However,

                                    3
 1            a non-signatory to a contract containing a forum
 2            selection clause may enforce the forum selection
 3            clause against a signatory when the non-signatory is
 4            “closely related” to another signatory.       In such
 5            instances, the relationship between the non-signatory
 6            and that (latter) signatory must be sufficiently close
 7            that the non-signatory’s enforcement of the forum
 8            selection clause is “foreseeable” to the signatory
 9            against whom the non-signatory wishes to enforce the
10            forum selection clause.

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

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

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

                                    4
1        Accordingly, and finding no merit in appellant’s other
2   arguments, we hereby AFFIRM the judgment of the district court.

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

                                  5