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
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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
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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