On July 12, 2024, Justice Chan of the New York County Commercial Division issued a decision in BG Atl., Inc. v. Hay Hill Invs. Ltd., 2024 NY Slip Op. 32438(U), holding rejecting a narrow interpretation of a forum selection clause, explaining:
Relevant to this motion, section 13 of the loan agreement provides that any disputes arising from the interpretation and/or execution of the Agreement shall be settled through negotiations by both Parties. If there is no resolution in fifteen days, the “dispute shall be referred to and finally resolved by a court of competent jurisdiction in New York’.’ Defendant claims that personal jurisdiction is lacking because Section 13 of the loan agreement only applies to “disputes arising from the interpretation and/or execution of the Agreement” and not an “alleged default in repaying the loan.”
(Internal quotations and citations omitted).
. . .
As a threshold matter, this court has personal jurisdiction over defendant as a result of Section 13 of the loan agreement, which states in part that “any dispute” between the parties “shall be referred to and finally resolved by a court of competent jurisdiction in New York.” Forum selection clauses are prima facie valid and should be enforced absent fraud, overreach, unfairness, or a clear demonstration that the forum would be inconvenient for the defendant. Here, defendant has not demonstrated that the forum selection clause is fraudulent, overreaching, or unfair, and has not made any showing as to why this forum would be inconvenient. To avoid this conclusion, defendant argues that the language of the forum selection clause does not extend to disputes over a loan default because a default under the loan does not arise from the interpretation and/or execution of the agreement. This argument is unavailing because defendant’s interpretation of the forum selection clause would render the forum selection clause meaningless. It is unclear what disputes, if any, would emerge from the interpretation or execution of the loan agreement besides disputes over payment or repayment. Indeed, the sole purpose of the loan agreement is to facilitate the giving out and repayment of a loan. Defendant’s proffered interpretation of the loan agreement would constitute a woodenly technical phrasing that distorts the parties’ shared intent, which courts should not embrace. As courts are discouraged from adopting interpretations of forum selection clauses that render them meaningless, this court declines to do so here.