On March 19, 2025, Justice Chan of the New York County Commercial Division issued a decision in Talipot ESG Invs. LLC v. Bulltick Fin. Advisory Servs. LLC, 2025 NY Slip Op. 50349(U), holding that the fact that defendants played a role in a transaction was insufficient, without more to bind them to the forum selection clause of an agreement they did not sign, explaining:
In general, forum selection clauses provide certainty and predictability in the resolution of disputes. For this reason, it is the well-settled policy of the courts of New York to enforce contractual provisions for selection of a forum for litigation. Forum selection clauses confer personal jurisdiction over all parties to the agreement containing such a provision.
In the instant matter, all parties agree that the ACP Operating Agreement requires that “any proceeding arising between the parties in any manner pertaining or related to this Agreement shall, to the extent permitted by law, be held in New York County, New York . . . .” The problem, however, is that none of the Bulltick Defendants are parties to the ACP Operating Agreement. To get around this issue, plaintiffs allege that the ACP Operating Agreement’s forum selection clause binds the Bulltick Defendants because they are closely related to the ACP Operating Agreement’s signatories.
The general rule in New York is that only parties to an agreement will be bound by its terms. Accordingly, unless a recognized exception applies, a forum selection clause may not be enforced against a nonsignatory.
One such recognized exception under New York law exists when a non-signatory is closely related to a signatory to the contract. Specifically, under New York law, a signatory to a contract may invoke a forum selection clause against a non-signatory if the non-signatory is closely related’ to one of the signatories such that enforcement of the forum selection clause is foreseeable by virtue of the relationship between the signatory and the party sought to be bound. A close relationship between a nonsignatory and a signatory exists if the nonsignatory party has an ownership interest or a direct or indirect controlling interest in the signing party, or if “the entities or individuals consulted with each other regarding decisions and were intimately involved in the decision-making process of the signatory. Put differently, a non-party is ‘closely related to a dispute if its interests are completely derivative of and directly related to, if not predicated upon the signatory party’s interests or conduct. This is a fairly strict standard.
At the outset, plaintiffs do not seriously contend that any of the Bulltick Defendants maintain either an ownership interest or a direct or controlling interest in any of the entities that were signatories to the ACP Agreement. Nor could they. Bulltick’s entire role in the transaction, as detailed in the Amended Complaint, was to act a placement agent for Theia and serve as the administrator for ACP. Plaintiffs instead maintain that a close relationship exists between the Bulltick Defendants and the ACP Operating Agreement’s signatories because, as alleged, the Bulltick Defendants purportedly (1) induced plaintiffs to sign the ACP Operating Agreement, (2) were instrumental in forming ACP as an investment vehicle for plaintiffs to invest in Theia, and (3) circulated relevant investment documents to plaintiffs that were prepared by its outside counsel. These allegations, however, only establish that the Bulltick Defendants worked with Theia and ACP to induce the investments from plaintiffs they were hired to facilitate. They do not, as plaintiffs suggest, establish that the Bulltick Defendants’ interests were completely derivative of or directly related to ACP Operating Agreement’s signatories’ interest so as to now be bound the forum designated under the agreement.
. . .
This conclusion is only buttressed by the ASA between ACP and Bulltick. For example, Bulltick’s obligations on behalf of ACP under the ASA—which included distributing information to members of ACP, circulating notices between ACP from its members, and coordinating tax and financial information—were generally administrative in nature. Furthermore, the ASA had its own separate forum selection clause that required that the parties agreed to resolve arising out of Bulltick’s provision of work under the ASA by final and binding arbitration to be conducted by an arbitration tribunal in Miami, Florida. Accounting for these contractual provisions, and again considering Bulltick’s overall role in Theia’s capital raise, the present record plainly does not evince the requisite level of intimate control, involvement, or relation between the Bulltick Defendants and ACP, Theia, or ACM, that would have made it foreseeable that the Bulltick Defendants would be litigating disputes arising out of an agreement they had not signed.
(Internal quotations and citations omitted).