The opinion of the court was delivered by: Stanton, District Judge.
Defendant Citicorp moves to dismiss the complaint pursuant
to Fed.R.Civ.P. 12(b), asserting that a forum-selection clause
in the parties' contract requires that plaintiff Medoil
Corporation bring this action in Zurich, Switzerland.*fn1
Medoil is a Liberian corporation engaged in the shipping
business. Its sole place of business is Medoil (USA) Inc. in
Greenwich, Connecticut, and its only shareholders are
Evangelos Karvounis and his wife Theodora Karvounis. Mr.
Karvounis is Medoil's president and Mrs. Karvounis is its
treasurer. Citicorp is a multinational financial institution
that controls Citicorp Investment Bank (Switzerland) ("CIBS"),
a Swiss corporation with an office in Zurich,
Mr. Karvounis met with CIBS representatives in Zurich in
early 1986 to discuss opening an account for Medoil. Medoil
opened the account in March 1986, and Mr. and Mrs. Karvounis
signed CIBS's printed forms entitled Account Agreement,
Agreement Governing Fiduciary Placements, Margin Agreement and
Declaration of Pledge (collectively, the "agreements"). All of
the agreements contained the following forum-selection clause
in bold type:
All relations between the Bank and the Account
Holder(s) are governed by Swiss law. Place of
performance, place of prosecution for debts and
exclusive venue for all legal actions are at the
location of the Bank's office appearing on this
Agreement regardless of the Account Holder(s)'s
residence or domicile. The Bank, however, may
bring action against the Account Holder(s) before
the courts or any other competent authority at
the place of residence of the Account Holder(s)
or elsewhere, in which case Swiss law will also
govern and be applied.*fn3
The office location appearing on the agreements is Zurich.
The Account Agreement offers several services and
investments for customers to select. One of the services is
entitled "Safekeeping Accounts and Securities Transactions,"
and states that the customer is to initial a particular box if
he or she wishes "to authorize the Bank to take custody of
securities, valuables and documents and to execute securities
transactions for the account." Mr. and Mrs. Karvounis did not
initial this box, although they did select other services by
initialing the appropriate boxes.
The complaint alleges that the funds Medoil had deposited in
its Zurich account were used to make unauthorized trades.
(Complaint ¶ 19). Medoil also contends that it purchased shares
of Clark Copy International Corporation ("Clark") because of
false statements and misleading omissions of CIBS employees.
(Id. ¶¶ 24-25). Mr. Karvounis discussed a "special deal" when
he first met with Pieter Danielsson and David Tye (vice
presidents of CIBS, Zurich; see Ptf.'s Exs. 15, 17) in Zurich
in early 1986. (Affidavit of Evangelos Karvounis sworn to
August 9, 1989 ¶ 11). In the summer of 1986, Mr. Danielsson
called Mr. Karvounis from New York and the two met to discuss a
private placement of Clark shares at the Waldorf-Astoria in New
York. (Id. ¶ 15). Mr. Karvounis again met with Mr. Danielsson
to discuss the Clark transaction in Zurich in October 1986 (Id.
at ¶ 16).
Mr. Karvounis purchased Clark shares in December 1986 and
June 1987. (Id. at ¶¶ 18-19). Although Medoil asserts that
these were over the counter transactions effected on NASDAQ
between a New York-based broker-dealer, Mount Keen & Co., Inc.,
and Citicorp in New York (Plaintiff's Memorandum of Law in
Opposition to Defendant's Motion to Dismiss at 20-21; see also
Ptf.'s Exs. 11-13), Mr. Karvounis placed the purchase orders in
telephone conversations with Mr. Danielsson's assistant, Ms.
Graf. The stock was purchased through and credited to Medoil's
CIBS account. (Ptf.'s Ex. 9; Defendant's Reply Memorandum of
Law Exhibit B).
Medoil brings this action for compensatory and punitive
damages under the Securities Exchange Act of 1934,
15 U.S.C. § 78a-78o (1988), the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. § 1961-68 (1988), and pendent
Citicorp asserts the complaint should be dismissed because
the forum-selection clause requires Medoil to bring this suit
in Zurich. Medoil asserts that the clause does not cover ...