GOL §§ 5-1401 and 5-1402 Do Not Bar Enforcement of Forum Selection Clause

On January 12, 2024, Justice Chan of the New York County Commercial Division issued a decision in LVH Global, Inc. v. Benesh, 2024 NY Slip Op. 30169(U), holding that GOL §§ 5-1401 and 5-1402 do not bar enforcement of a forum selection clause, explaining:

The primary basis under which Benesh seeks dismissal of the Complaint is that a court sitting in New York is an inconvenient forum for the parties’ dispute. As Benesh necessarily acknowledges, however, the Employment Agreement contains a choice·of·forum provision under which the parties expressly consented to the exclusive jurisdiction in any state or federal court sitting in New York, New York and irrevocably waived any objection based on the grounds of forum non conveniens. Benesh therefore attacks the forum selection clause as unenforceable under New York law. The court disagrees.

. . .

The only explicit argument Benesh advances to challenge the validity of the forum selection clause is that it does not meet the requirements of GOL §§ 5-1401 and 5·1402. Benesh’s reliance on this statute, however, is misplaced. Under GOL § 5·1401, parties to a contract may agree that New York law will govern their rights and duties, whether or not such contract bears a reasonable relation to this state. GOL § 5-1402, in turn, opens New York courts up to parties who lack New York contacts but who (1) engaged in a transaction involving $1 million or more, (2) agreed in their contract to submit to the jurisdiction of New York courts, and (3) chose to apply New York law pursuant to, and consistent with requirements set forth in, Section 5·1401 (see GOL § 5·1401 [2]. Notably, neither nor GOL § 5-1401 nor GOL § 5-1402 function as a limitation on the use and effectiveness of forum selection clauses. Rather, the statute merely precludes New York courts from declining jurisdiction even where the only nexus to New York is the contractual agreement. Put differently, even if, as is purportedly the case here, certain requirements of GOL § 5-1401 or GOL § 5-1402 are not met, the forum selection clause can still be enforced pursuant to its terms. Here, as a result, the fact that the Employment Agreement is related to labor or personal services and this action involves less than $1 million does not disturb the above conclusion that the forum selection clause is prima facie valid and enforceable and that Benesh has failed to make a showing that enforcement of it would be unreasonable or unjust.

At bottom, because Benesh fails to establish that the forum selection clause which irrevocably waived any objection based on the grounds of forum non conveniens is unenforceable, his motion to dismiss on forum non conveniens grounds is denied.

(Internal quotations and citations omitted).

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