PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
ALBEMARLE CORPORATION;
ALBEMARLE INTERNATIONAL
CORPORATION,
Plaintiffs-Appellants,
No. 10-1000
v.
ASTRAZENECA UK LTD,
Defendant-Appellee.
Appeal from the United States District Court
for the District of South Carolina, at Orangeburg.
Margaret B. Seymour, District Judge.
(5:08-cv-01085-MBS)
Argued: September 21, 2010
Decided: December 8, 2010
Before NIEMEYER and KING, Circuit Judges, and
Robert J. CONRAD, Jr., Chief United States District Judge
for the Western District of North Carolina,
sitting by designation.
Affirmed by published opinion. Judge Niemeyer wrote the
opinion, in which Judge King and Judge Conrad joined.
2 ALBEMARLE CORPORATION v. ASTRAZENECA
COUNSEL
ARGUED: Charles Mitchell Brown, NELSON MULLINS
RILEY & SCARBOROUGH, Columbia, South Carolina, for
Appellants. Raymond A. Cardozo, REED SMITH LLP, San
Francisco, California, for Appellee. ON BRIEF: William C.
Wood, Jr., Elizabeth H. Campbell, NELSON MULLINS
RILEY & SCARBOROUGH, Columbia, South Carolina, for
Appellants. S. Miles Dumville, Travis A. Sabalewski, REED
SMITH LLP, Richmond, Virginia; Jacquelyn D. Austin,
Keith D. Munson, WOMBLE CARLYLE SANDRIDGE &
RICE, Greenville, South Carolina, for Appellee.
OPINION
NIEMEYER, Circuit Judge:
In this case, we address how to interpret a forum selection
clause that makes an international contract "subject to juris-
diction" in the United Kingdom.
AstraZeneca UK Ltd., a United Kingdom corporation,
agreed in a 2005 contract to purchase a substantial portion of
its needs for di-isopropyl-phenol ("DIP") from Albemarle
International Corporation, a Virginia corporation. Albemarle
International Corporation was the global marketing arm of
Albemarle Corporation, a Virginia corporation (both corpora-
tions, collectively "Albemarle"), and Albemarle Corporation
manufactured DIP in its plant in South Carolina. AstraZeneca
used DIP to manufacture the drug Diprivan, a fast-acting
anesthetic, at its plant in England. In the 2005 contract, Astra-
Zeneca also agreed that if it ceased using DIP in favor of
propofol, a derivative of DIP, it would give Albemarle the
right of first refusal to supply AstraZeneca with propofol.
When AstraZeneca did elect a year later to use propofol in
lieu of DIP, Albemarle contends that AstraZeneca breached
ALBEMARLE CORPORATION v. ASTRAZENECA 3
its duty to give Albemarle the right of first refusal, and Albe-
marle commenced this action in South Carolina, alleging that
AstraZeneca breached the 2005 contract.
Based on a forum selection clause in the 2005 contract,
which provided that the contract was "subject to" the jurisdic-
tion of the English High Court, AstraZeneca filed a motion to
dismiss this action for improper venue. The district court
granted the motion and dismissed the complaint, applying
English law, which the contract specified was applicable, to
hold that the forum selection clause was mandatory and
exclusive, even though such a clause would likely be con-
strued under federal case law to be permissive.
We affirm. Resting on the traditional proposition that we
should give effect to parties’ expectations as manifested in
their legitimate agreements, we apply English law to construe
the forum selection clause and conclude that under English
law, the clause requires that this litigation be pursued in the
designated English court. We also conclude that enforcing the
forum selection clause in this manner is not unreasonable, as
unreasonableness is detailed in The Bremen v. Zapata Off-
Shore Co., 407 U.S. 1, 15-18 (1972).
I
In the contract, which is dated April 11, 2005, AstraZeneca
agreed to purchase at least 80% of its requirements for DIP
from Albemarle. To manufacture Diprivan, AstraZeneca dis-
tilled the DIP to obtain propofol, the active ingredient in
Diprivan. In the 2005 contract AstraZeneca agreed that if it
decided to bypass its own distilling process and purchase
propofol directly for its manufacturing of Diprivan, it would
give Albemarle the right of first refusal to sell AstraZeneca
propofol "under mutually acceptable terms and conditions."
About a year later, in June 2006, AstraZeneca notified
Albemarle that it intended to cease purchasing DIP and
4 ALBEMARLE CORPORATION v. ASTRAZENECA
instead to purchase propofol directly from a third party. After
AstraZeneca provided Albemarle with a copy of its purchase
agreement with the third party and Albemarle made a compet-
ing offer to sell propofol to AstraZeneca, AstraZeneca refused
to purchase propofol from Albemarle.
Albemarle commenced this breach of contract action
against AstraZeneca in the Court of Common Pleas in
Orangeburg, South Carolina, and AstraZeneca, invoking
diversity jurisdiction, removed the case to federal court.
AstraZeneca then filed a motion to dismiss for improper
venue, relying on Federal Rules of Civil Procedure 12(b)(3)
and 12(b)(6), along with 28 U.S.C. § 1406(a). In support of its
motion, AstraZeneca pointed to the choice of law and forum
selection clauses which provided simply that the contract
"shall be subject to English Law and the jurisdiction of the
English High Court." In response to the motion, Albemarle
argued that the forum selection clause was only permissive
and did not exclude a South Carolina court as an appropriate
forum. It also filed a motion seeking to enjoin AstraZeneca
from pursuing litigation concerning the contract in England.
While this litigation was pending, AstraZeneca and Albe-
marle entered into a new contract dated June 23, 2008, under
which AstraZeneca agreed to a one-time purchase of DIP
from Albemarle. In this contract, the parties agreed to apply
South Carolina law and to litigate disputes exclusively in a
South Carolina court. Based on an integration clause in the
2008 contract, as well as its forum selection clause, Albe-
marle argued to the district court that the 2008 contract super-
seded the 2005 contract, including the 2005 contract’s choice
of law and forum selection clauses.
In an opinion dated March 31, 2009, the district court
agreed with Albemarle and denied AstraZeneca’s motion to
dismiss, finding that federal law applied in construing the
forum selection clause in the 2005 contract and that, under
federal law, this form of forum selection clause was only per-
ALBEMARLE CORPORATION v. ASTRAZENECA 5
missive and not exclusive. The court also entered an injunc-
tion barring AstraZeneca from pursuing claims on the 2005
contract in England. Because it determined that the forum
selection clause of the 2005 contract was permissive, the court
concluded that it need not "determine whether the [2008]
Contract supersede[d] the [2005] contract."
Six months later, however, the district court granted Astra-
Zeneca’s motion for reconsideration and then granted its
motion to dismiss. The court also vacated its injunction and
denied all remaining motions as moot. The court stated that
earlier it had "not address[ed] Defendant’s argument regard-
ing the application of English law in ruling on the motion to
dismiss." The court concluded that its prior order "should be
vacated and Defendant’s motion to dismiss granted." It rea-
soned that English law applied and that under English law
"the forum selection clause is mandatory." It also concluded
that enforcing the forum selection clause would not violate
any "strong public policy" of South Carolina. By a later order
on Albemarle’s motion for reconsideration, the court ruled
that the 2008 contract did not supersede the 2005 contract.
From the district court’s order of dismissal, dated Septem-
ber 9, 2009, Albemarle took this appeal.
II
Albemarle contends first that the 2008 contract displaced
and nullified the 2005 contract and, in doing so, replaced the
2005 contract’s forum selection clause with the forum selec-
tion clause in the 2008 contract, which designated any state
or federal court in or near Orangeburg, South Carolina as hav-
ing "exclusive jurisdiction and venue." To make this argu-
ment, Albemarle relies on both the integration clause and the
forum selection clause contained in the 2008 contract.
The subject of the 2008 contract was AstraZeneca’s one-
time purchase of 9,253 kilograms of DIP, to be delivered "on
6 ALBEMARLE CORPORATION v. ASTRAZENECA
or before June 27, 2008 provided it is after execution of the
contract by the parties and payment received by Albemarle."
There were no other substantive terms in the 2008 contract
other than to clarify that the contract "shall commence on
June 10, 2008, and terminate on June 30, 2008." The "General
Conditions of Sale," incorporated into the 2008 contract,
included the integration and forum selection clauses, on
which Albemarle relies. The integration clause provided:
This Agreement constitutes the entire contract of
sale and purchase of the product(s) named herein. All
prior agreements between the parties relating to this
product, if any are currently in force or effect, shall
have no further force or effect, except to the extent
relied upon by Seller (or any subsidiary of Seller) as
forming the basis of relief sought by Seller (or any
subsidiary of Seller) against Buyer in current or
future litigation between Buyer and Seller (or any
subsidiary of Seller). The terms of this Agreement
shall not, in the absence of prior express written con-
sent of the parties, be amended, supplemented or
superseded by any terms or provisions of any pur-
chase order, invoice or other document of any kind.
(Emphasis added). And the forum selection clause, which also
included a choice of law provision, provided:
This Agreement shall be interpreted in accordance
with the laws of South Carolina, without giving
effect to provisions as to the conflicts of laws. Any
disputes relating in any way to this agreement will
be resolved in the state or federal court located in (or
if none is located in, then the nearest to) Orangeburg,
South Carolina, which court will have exclusive
jurisdiction and venue over such dispute.
(Emphasis added). Albemarle argues that this language in the
2008 contract "terminated any and all rights then being
ALBEMARLE CORPORATION v. ASTRAZENECA 7
asserted under the 2005 Contract by AstraZeneca or by Albe-
marle, including rights under the choice of law and venue pro-
vision of the 2005 contract."
We find this argument inconsistent with Albemarle’s liti-
gating posture and, in any event, not supported by the contrac-
tual language of the 2008 contract. First, Albemarle suggests
that all rights under the 2005 contract were terminated,
excepting any "prior agreements . . . to the extent relied on by
[Albemarle]." But this language, on which Albemarle relies to
preserve its claim for breach of its right of first refusal, can
hardly be employed to preserve a right in the 2005 contract
without including the conditions attached to that right. And,
of course, those conditions state that the right is to be consid-
ered under English law and is to be litigated in an English
court.
Second, while the 2008 contract does provide that all prior
contracts in force as of June 23, 2008 (when the 2008 contract
was signed) "shall have no further force or effect" (emphasis
added), that language clearly evidences only a termination as
of that time, June 23, 2008, of any contractual rights and obli-
gations that may have survived from the 2005 contract. Thus,
from the moment the parties signed the 2008 contract, the
2005 contract no longer bound the parties. But the 2005 con-
tract’s prior force or effect was not eliminated by a clause
stating that it have no further force or effect. The use of the
word "further" is forward-looking and does not purport to
undo and nullify all prior sales made under the 2005 contract,
all warranties given, all obligations incurred, and all claims
arising from those sales obligations, much less pending litiga-
tion based on earlier breaches of the 2005 contract.
Finally, the language in the 2008 contract does not purport
to release any or all claims arising out of the 2005 contract.
Before the 2005 contract was terminated by the language in
the 2008 contract, the parties treated the 2005 contract as a
valid enforceable contract that created benefits for and
8 ALBEMARLE CORPORATION v. ASTRAZENECA
imposed duties on the parties. There is no language in the
2008 contract rendering those benefits and duties null nunc
pro tunc.
We readily conclude that the 2008 contract does not affect
the issues presented in this case.
III
For its principal argument, Albemarle contends that the dis-
trict court erred in enforcing the forum selection clause under
English law rather than under American federal common law.
It argues that federal law applies because seeking to enforce
a forum selection clause in a federal court implicates venue
rules and statutes that are part of the federal law, as, for exam-
ple, Federal Rule of Civil Procedure 12(b)(3), 28 U.S.C.
§ 1391, and 28 U.S.C. § 1406(a). See Wong v. PartyGaming
Ltd., 589 F.3d 821, 827 (6th Cir. 2009) (noting that six cir-
cuits have held that "the enforceability of a forum selection
clause implicates federal procedure and should therefore be
governed by federal law," and adopting that rule); Manetti-
Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 513 (9th
Cir. 1988) ("[B]ecause enforcement of a forum clause neces-
sarily entails interpretation of the clause before it can be
enforced, federal law also applies to interpretation of forum
selection clauses"). It then continues with its argument that
under federal law the general maxim is that "an agreement
conferring jurisdiction in one forum will not be interpreted as
excluding jurisdiction elsewhere unless it contains specific
language of exclusion." IntraComm, Inc. v. Bajaj, 492 F.3d
285, 290 (4th Cir. 2007) (emphasis omitted) (quoting John
Boutari & Son, Wines & Spirits, S.A. v. Attiki Imp. & Distrib.,
Inc., 22 F.3d 51, 53 (2d Cir. 1994)). In sum, Albemarle asserts
that federal law would hold that a forum selection clause, as
written in the 2005 contract—providing that the contract is
"subject to . . . the jurisdiction of the English High Court"—
permits the English court to entertain the case but does not
ALBEMARLE CORPORATION v. ASTRAZENECA 9
require that the litigation take place there, because the lan-
guage does not exclude other jurisdictions and forums.
AstraZeneca agrees that federal law applies when a federal
court construes a forum selection clause, but it argues that
federal law also requires that a court give effect to the parties’
intent as expressed in the parties’ choice of law. See Sterling
Forest Assoc., Ltd. v. Barnett-Range Corp., 840 F.2d 249, 251
(4th Cir. 1988) (analyzing parties’ intent to hold that forum
selection clause mandated bringing the action in California);
Yakin v. Tyler Hill Camp, Inc., 566 F.3d 72, 76 (2d Cir. 2009)
("[W]e are obliged to give effect to the parties’ intentions
regarding venue"); Mazda Motors of Am., Inc. v. M/V Cougar
ACE, 565 F.3d 573, 580 (9th Cir. 2009) (same). It observes
that since the parties specified that English law was to apply,
the forum selection clause must be taken as English law
would construe it, and that, under English law, the English
forum is mandatory, not permissive. See Yavuz v. 61 MM,
Ltd., 465 F.3d 418, 431 (10th Cir. 2006) (holding that the law
that the parties chose to govern the contract should be applied
to construe a forum selection clause in that contract).
We find much of the parties’ discussion is unhelpful. Albe-
marle largely addresses naked forum selection clauses where
no choice of law is indicated. AstraZeneca, by contrast, col-
lapses the analysis of the forum selection clause with the dis-
cussion of the choice of law clause. While the parties do not
appear to be in any serious disagreement about the controlling
legal principles, they do disagree over the analysis to be
undertaken. We analyze this contract as one that contains both
a choice of law clause and a forum selection clause.
We begin by noting that when parties to a contract confer
jurisdiction and venue on a particular court, as a general mat-
ter federal common law directs courts to favor enforcement of
the agreement, so long as it is not unreasonable. See The Bre-
men, 407 U.S. at 10. "Forum-selection clauses [had] histori-
cally not been favored by American courts" because the effect
10 ALBEMARLE CORPORATION v. ASTRAZENECA
of enforcing them "was to ‘oust the jurisdiction’ of the court."
Id. at 9. This historical reluctance to enforce such clauses was
not unlike the historical reluctance to enforce arbitration
clauses. See, e.g., Scherk v. Alberto-Culver Co., 417 U.S. 506,
519 (1974) (observing that an agreement to arbitrate is in
effect a type of forum selection clause). Rejecting the histori-
cal judicial bias and giving effect to privately negotiated
agreements, the Bremen Court held:
Thus, in the light of present-day commercial realities
and expanding international trade we conclude that
the forum clause should control absent a strong
showing that it should be set aside. . . . The correct
approach would have been to enforce the forum
clause specifically unless Zapata could clearly show
that enforcement would be unreasonable and unjust,
or that the clause was invalid for such reasons as
fraud or overreaching.
The Bremen, 407 U.S. at 15.
Even though The Bremen was an admiralty case, its ratio-
nale is applicable to forum selection clauses generally. See,
e.g., Bryant Elec. Co. v. City of Fredericksburg, 762 F.2d
1192, 1196 (4th Cir. 1985) ("[T]his Court has applied [The
Bremen’s] reasoning in diversity cases not involving interna-
tional contracts"); Mercury Coal & Coke, Inc. v. Mannesmann
Pipe & Steel Corp., 696 F.2d 315, 317-18 (4th Cir. 1982); see
also Stewart Org., Inc. v. Ricoh, 487 U.S. 22, 33 (1988) (Ken-
nedy, J., concurring) ("Although our opinion in The Bremen
involved a Federal District Court sitting in admiralty, its rea-
soning applies with much force to federal courts sitting in
diversity" (internal citation omitted)).
These cases apply federal common law favoring the
enforcement of forum selection clauses when interpreting
contracts that contain forum selection clauses, because forum
selection clauses implicate the appropriate venue of a court.
ALBEMARLE CORPORATION v. ASTRAZENECA 11
The appropriate venue of an action is a procedural matter that
is governed by federal rule and statutes. See, e.g., Fed. R. Civ.
P. 12(b)(3); 28 U.S.C. § 1391; 28 U.S.C. § 1406(a); see also
Manetti-Farrow, 858 F.2d at 513 (noting that federal law was
enacted to address venue, and applying state law concerning
venue would render the federal law "nugatory"); cf. Stewart,
487 U.S. at 32 (holding that 28 U.S.C. § 1404(a), which gov-
erns the transfer of venue among federal courts, is "doubtless
capable of classification as a procedural rule"). Thus, when a
court is analyzing a forum selection clause, which changes the
default venue rules applicable to the agreement, that court will
apply federal law and in doing so, give effect to the parties’
agreement. See The Bremen, 407 U.S. at 12-13 ("There are
compelling reasons why a freely negotiated private interna-
tional agreement, unaffected by fraud, undue influence, or
overweening bargaining power, such as that involved here,
should be given full effect"); Wong, 589 F.3d at 828 ("We
therefore hold that in this diversity suit, the enforceability of
the forum selection clause is governed by federal law");
Manetti-Farrow, 858 F.2d at 513 ("[B]ecause enforcement of
a forum clause necessarily entails interpretation of the clause
before it can be enforced, federal law also applies to interpre-
tation of forum selection clauses"). But see Abbott Labs. v.
Takeda Pharm. Co., 476 F.3d 421, 423 (7th Cir. 2007)
("Simplicity argues for determining the validity . . . of a
forum selection clause . . . by reference to the law of the juris-
diction whose law governs the rest of the contract").
Following the majority rule, we thus conclude that a federal
court interpreting a forum selection clause must apply federal
law in doing so. As an agreement purporting to modify or
waive the venue of a federal court, a forum selection clause
implicates what is recognized as a procedural matter governed
by federal law—the proper venue of the court. Using this rea-
soning, the Supreme Court applied federal law in enforcing a
forum selection clause in a federal suit where a motion to
transfer venue under 28 U.S.C. § 1404 had been filed. See
Stewart, 487 U.S. at 32.
12 ALBEMARLE CORPORATION v. ASTRAZENECA
When construing forum selection clauses, federal courts
have found dispositive the particular language of the clause
and whether it authorizes another forum as an alternative to
the forum of the litigation or whether it makes the designated
forum exclusive. See IntraComm, 492 F.3d at 290 (ruling that
a clause providing that either party "shall be free" to pursue
its rights in a specified court did not preclude jurisdiction or
venue in the forum court). As we said in IntraComm, "A gen-
eral maxim in interpreting forum selection clauses is that ‘an
agreement conferring jurisdiction in one forum will not be
interpreted as excluding jurisdiction elsewhere unless it con-
tains specific language of exclusion.’" Id. (quoting John Bou-
tari & Son, 22 F.3d at 53).
The language of the forum selection clause in this case,
taken by itself and out of context, appears to make the desig-
nation of the English court permissive, as we construed a sim-
ilar clause in IntraComm. That conclusion would be
consistent with the principle of federal common law to make
such clauses permissive unless they contain specific language
of exclusion. But in this case the clause taken in context does
contain what amounts, in effect, to language of exclusion. The
clause here includes language that English law, not American
federal law, must be applied. See Yavuz, 465 F.3d at 430
(holding that a court must honor the forum selection clause
"as construed under the law specified in the agreement’s
choice-of-law provision"). And applying English law makes
a difference, as the parties have recognized and stipulated.
Under English law, when the parties designate the English
High Court as an appropriate forum, the designation is man-
datory and exclusive. The district court observed in this case,
"[Albemarle] candidly concede[s] that the forum selection
clause at issue would be considered to be mandatory under
English law."
Moreover, the parties’ stipulation about the effect of
English law seems to be supported. See Commission Regula-
tion 44/2001, art. 23, 2001 O.J. (L 12) 1 (EU), amended by
ALBEMARLE CORPORATION v. ASTRAZENECA 13
2002 307/28 (L 225) 2. This was directly confirmed recently
by the English High Court, which ruled on the very contract
before us: "As a matter of English law, which is the applica-
ble law, that clause [in the same contract that is before us]
would be construed as being an exclusive jurisdiction clause,
as was conceded by Albemarle in the 2008 Action in light of
Article 23.1 of the Judgements Regulation (No. 44/2001)."
AstraZeneca UK Ltd. v. Albemarle Int’l Corp., 34 [2010]
EWHC 1028 (comm), [43].
IV
Of course, we will give effect to the parties’ selection of the
English forum only if it would not be unreasonable to do so.
Under The Bremen, a forum selection clause may be found
unreasonable if:
(1) [its] formation was induced by fraud or over-
reaching; (2) the complaining party "will for all
practical purposes be deprived of his day in court"
because of the grave inconvenience or unfairness of
the selected forum; (3) the fundamental unfairness of
the chosen law may deprive the plaintiff of a rem-
edy; or (4) [its] enforcement would contravene a
strong public policy of the forum state.
Allen v. Lloyd’s of London, 94 F.3d 923, 928 (4th Cir. 1996)
(summarizing the The Bremen definition).
In this case, Albemarle contends that enforcement of the
forum selection clause would violate a strong public policy of
South Carolina, namely South Carolina’s disfavor of such
clauses as indicated in S.C. Code Ann. § 15-7-120(A), which
reads:
Notwithstanding a provision in a contract requiring
a cause of action arising under it to be brought in a
location other than as provided in this title and the
14 ALBEMARLE CORPORATION v. ASTRAZENECA
South Carolina Rules of Civil Procedure for a similar
cause of action, the cause of action alternatively may
be brought in the manner provided in this title and
the South Carolina Rules of Civil Procedure for such
causes of action.
In effect, this statute makes all forum selection clauses per-
missive and thus would overrule the forum selection clause in
this case, that makes the English forum exclusive. We reject
Albemarle’s public policy argument at several levels.
First, insofar as the South Carolina statue would purport to
impose South Carolina procedural rules on a federal court, it
would be preempted by federal law. Federal law explicitly
regulates the appropriate venue in cases filed in federal court,
and to the extent that a forum selection clause is invoked to
change venue, federal law applies, as we have discussed
above.
Second, state reluctance to recognize and enforce forum
selection clauses was specifically addressed and countered by
the Supreme Court’s holding in The Bremen. In The Bremen,
the Court acknowledged that "[m]any courts, federal and
state, have declined to enforce [forum selection] clauses on
the ground that they were ‘contrary to public policy’ or that
their effect was to ‘oust the jurisdiction’ of the court." 407
U.S. at 9. But it rejected that rationale, noting that these
courts’ approach was based on the "provincial attitude regard-
ing the fairness of other tribunals." Id. at 12. The Court thus
held that, contrary to judicial disfavor of forum selection
clauses such as that manifested in the South Carolina statute,
in federal court, forum selection clauses enjoy a presumption
of enforceability.
Third, we can find virtually no evidence to indicate that
S.C. Code Ann. § 15-7-120(A), overriding exclusive forum
selection clauses in favor of applying state procedural rules
for venue, manifests a strong public policy of South Carolina.
ALBEMARLE CORPORATION v. ASTRAZENECA 15
We could find no South Carolina court that has so held.
Indeed, we have cases in which South Carolina courts have
enforced forum selection clauses in contracts, notwithstanding
the existence of § 15-7-120(a). See, e.g., Sec. Credit Leasing,
Inc. v. Armaly, 529 S.E.2d 283, 290 (S.C. Ct. App. 2000);
Firestone Fin. Corp. v. Owens, 419 S.E.2d 830 (S.C. Ct. App.
1992). And following South Carolina’s cases, federal courts
sitting in South Carolina have enforced forum selection
clauses, notwithstanding the statute. See, e.g., Gregg v. GI
Apparel, Inc., No. 3:05-2399-MBS, 2006 WL 346423 (D.S.C.
Feb. 14, 2006); Power-Linx, Inc. v. Satius, Inc., No. 4:05-cv-
3281-TLW, 2006 WL 2038263 (D.S.C. Jul. 20, 2006); Atl.
Floor Servs., Inc. v. Wal-Mart Stores, Inc., 334 F. Supp. 2d
875, 877 (D.S.C. 2004). But see Ins. Prod. Mktg., Inc. v. Indi-
anapolis Life Ins. Co., 176 F. Supp. 2d 544, 550 (D.S.C.
2001); accord Consol. Insured Benefits, Inc. v. Conseco Med.
Ins. Co., 370 F. Supp. 2d 397, 401 (D.S.C. 2004).
Fourth and finally, it can hardly be a strong public policy
to countermand the very policy that the Supreme Court
adopted in The Bremen. The Bremen would have little effect
if states could effectively override the decision by expressing
disagreement with the decision’s rationale. Classifying South
Carolina’s statute as manifesting a strong public policy within
The Bremen’s reasoning would allow the very "provincial
attitude" rejected by The Bremen to override the federal pol-
icy of favoring a contractual choice of forum.
V
If we were, in this case, to exclude the federal interests
from our analysis—interests represented by federal venue
rules and statutes and by the policy articulated in The Bremen
— a traditional conflicts-of-laws analysis would apply, and in
a diversity case involving breach of contract, that would begin
with the Supreme Court’s decision in Klaxon Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487 (1941). In Klaxon, the Court
stated, "The conflict of laws rules to be applied by [a] federal
16 ALBEMARLE CORPORATION v. ASTRAZENECA
court . . . must conform to those prevailing in [the] state
courts. Otherwise, the accident of diversity of citizenship
would constantly disturb equal administration of justice in
coordinate state and federal courts sitting side by side." Id. at
496 (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 74-77
(1938)). Thus, for an action filed in South Carolina, South
Carolina law would be consulted for its choice of law rules,
and under those rules, South Carolina law would give effect
to the parties’ choice of law as specified in the contract. See
S.C. Code Ann. § 36-1-105(1) (providing, as applicable here,
"When a transaction bears a reasonable relation to this State
and also to another state or nation the parties may agree that
the law either of this State or of another state or nation shall
govern their rights and duties").
In this case, the parties agreed to the application of English
law, which would make the English forum exclusive and
would override South Carolina’s statute making all forum
selection clauses permissive, see S.C. Code § 15-7-120(a),
unless that statute manifested a strong public policy. But
under state law, a state provision establishing, as a procedural
matter, that the South Carolina venue rules trump any contrac-
tual agreement selecting an exclusive forum outside of South
Carolina is not the type of provision that South Carolina
courts have recognized as establishing a strong public policy
of the State that would overrule the parties choice of law out-
side South Carolina. See Nash v. Tindall Corp., 650 S.E.2d
81, 83-84 (S.C. Ct. App. 2007) (defining the public policy of
the State to implicate foreign law when it "is against good
morals or natural justice," such as "prohibited marriages,
wagers, lotteries, racing, contracts for gaming or the sale of
liquors, and others").
So whether we give effect to the parties’ agreement as a
matter of federal venue law or import the conflicts of laws
rules from South Carolina, we end up in the same place, con-
cluding that the parties agreed to the application of English
law. Thus, even while federal law may have required a con-
ALBEMARLE CORPORATION v. ASTRAZENECA 17
struction rendering the forum selection clause permissive,
English law must be applied, and it takes the clause as manda-
tory.
For the reasons given, we affirm the district court’s ruling
dismissing this case, based on enforcement of the parties’
forum selection and choice of law clauses.
VI
The parties here have negotiated for and agreed to a con-
tractual provision which provides that this "contract shall be
subject to English law and the jurisdiction of the English High
Court." While an agreement to be subject to the jurisdiction
of the English High Court could reasonably be taken to mean
that the parties only authorize litigation there but do not
exclude other appropriate forums, for the agreement to be
subject to English law, of necessity, excludes the application
of other law. And if English law construes the forum selection
clause to mean that litigation must be conducted in the
English High Court exclusively, as the parties agree that it
does, then the entire contractual provision’s meaning becomes
free of ambiguity.
In agreeing to these provisions, the parties undoubtedly
accepted that litigation on disputes arising under the 2005
contract would be conducted in England, just as they accepted
that litigation on disputes arising under the 2008 contract
would be conducted in South Carolina. It, therefore, cannot be
surprising to them that we enforce the 2005 contract that way,
especially in light of our longstanding tradition of favoring
the enforcement of contracts according to their terms.
The Supreme Court’s discussion in The Bremen sets forth
the reasons for this fundamental policy. Enforcement gives
effect to the legitimate expectations of the parties and elimi-
nates uncertainty and unexpected inconvenience. Indeed, the
Court pointed out then that "[t]he elimination of all such
18 ALBEMARLE CORPORATION v. ASTRAZENECA
uncertainties by agreeing in advance on a forum acceptable to
both parties is an indispensable element in international trade,
commerce, and contracting." The Bremen, 407 U.S. at 13-14;
see also Scherk, 417 U.S. at 429-30 ("A contractual provision
specifying in advance the forum in which disputes shall be lit-
igated and the law to be applied is, therefore, an almost indis-
pensable precondition to achievement of the orderliness and
predictability essential to any international business transac-
tion").
For the reasons given, we affirm the judgment of the dis-
trict court.
AFFIRMED