Although Walpex's memorandum of law asserts its conclusions as
to the proper resolution of this dispute under New York law, it
fails to make any argument as to the outcome of the case under
Bolivian law, or in exactly what way such an outcome would
violate New York public policy. Nor does it concede that
defendant's construction of Bolivian law is correct. As discussed
in Part D of this opinion, infra, this Court does not conclude
on the record before it that Bolivian law is so certain to
deprive plaintiff of relief it might obtain under New York law
that an injustice amounting to a violation of New York public
policy will occur.
Walpex also argues that "[d]efendant's belated, unilateral
attempt to impose" Bolivian law "is improper, unjust,
unreasonable, and unfair under the facts and circumstances at
bar." Plain. Mem. at 21. Plaintiff was fully informed before it
contracted with YPFB that YPFB intended Bolivian law to govern
the contract. The Invitation explicitly stated that bids had to
conform to the Specifications, which in turn clearly stated on
the first page: "The presentation of a bid implies the bidder's
submission to the legal system cited in paragraph 1.0 and to all
laws in force in the country, as well as to all requirements in
this list of Specifications." Specifications ¶ 2.3.3. Moreover,
the parties had signed another supply contract on March 26, 1982,
which included a clear choice-of-Bolivian-law provision. Palacios
de Vizzio Aff. ¶¶ 22-26. Consequently, because Walpex knew, or
should have known, before it submitted its bid that YPFB intended
that any dispute resulting from the bidding process be governed
by Bolivian law, the Court does not find it unfair, unreasonable
or unjust to apply Bolivian law in this case.
Therefore, because Bolivia has greater contacts with the case,
and Bolivia has the paramount interest in having the action
litigated under its laws, and the imposition of Bolivian law in
this action has not been shown to conflict with New York public
policy, the Court finds that Bolivian law should govern this
C. Choice of Forum
Having decided that Bolivian law governs the substantive issues
in this dispute, the Court must turn to the question of whether
Bolivia is the exclusive forum for any action arising out of the
In an earlier opinion, this Court denied defendant's motion to
dismiss the action on forum non conveniens grounds. See
Walpex, supra, 712 F. Supp. at 392-94. However, the issue of a
mandatory forum selection clause raised in the instant motion was
not before the Court on the prior motion, and constitutes a
separate consideration from the Court's earlier conclusion that
"litigation in this forum is permissible." Id. at 393.
The Supreme Court has held that forum selection clauses "should
be given full effect" when "a freely negotiated private
international agreement [is] unaffected by fraud, undue
influence, or overweening bargaining power." The Bremen v.
Zapata Off-Shore Co., 407 U.S. 1, 12-13, 92 S.Ct. 1907, 1914-15,
32 L.Ed.2d 513 (1972). This language has been further explicated
by the Court to mean that a "forum-selection clause in a contract
is not enforceable if the inclusion of that clause in the
contract was the product of fraud or coercion." Scherk v.
Alberto-Culver Co., 417 U.S. 506, 519 n. 14, 94 S.Ct. 2449, 2457
n. 14, 41 L.Ed.2d 270 (1974) (emphasis in original); see also
AVC Nederland B.V. v. Atrium Inv. Partnership, 740 F.2d 148,
156-58 (2d Cir. 1984) (Friendly, J.).
In this case, however, just as no written instrument signed by
the parties contains a choice of law clause, no such instrument
containing a choice of forum provision has been produced. While
it may be true that, as defendant argues, regulations would have
mandated inclusion of such a clause in any formal contract, this
Court cannot pass on the validity of a clause that might have
been or should have been included in a nonexistent document.
Thus, defendant's motion for summary judgment dismissing this
action on the basis of an exclusive forum clause is denied.
Defendant's argument that the alleged contract is unenforceable
if no valid choice of forum clause exists goes to the merits of
this action, which must be decided according to Bolivian law.
Plaintiff has not presented any arguments founded on Bolivian
law, either in the form of expert testimony or as citations to
cases or statutes, despite notice given as long ago as
defendant's previous motion to dismiss that defendant contended
that Bolivian law controlled. See Walpex, supra, 712 F. Supp. at
393. Provided that reasonable notice is given, a party may rely
on the law of a foreign country, and this Court "may consider any
relevant material or source, including testimony," in determining
foreign law. Fed.R.Civ.P. 44.1. The only material offered to the
Court concerning Bolivian law is the affidavit of Sergio Palacios
de Vizzio, supra, submitted in support of defendant's motion.
Mr. Palacios de Vizzio, an attorney admitted to practice in
Bolivia and in New York, and licensed by the Appellate Division
of the Supreme Court of New York as a Consultant on Bolivian law,
does indeed conclude that contracts between YPFB and foreign
suppliers must contain mandatory choice-of-Bolivian-law and
-forum clauses, and that they are void and unenforceable without
such clauses. See Palacios de Vizzio Aff. ¶¶ 18-20.
While the Court might be justified in relying on defendant's
expert as to this point, defendant has failed to convince the
Court that Bolivian courts would necessarily deny plaintiff any
relief in a case in which plaintiff's allegations, if proven, may
establish that defendant in bad faith induced plaintiff to rely
on its promised award of the contract. Defendant has failed to
demonstrate that it is entitled to summary judgment on this issue
as a matter of law, and its motion accordingly must be denied as
to this point.
For the reasons set forth above, defendant's motion for summary
judgment dismissing the complaint is denied.
The parties are directed to appear for a status conference
before this Court on March 1, 1991, at 3:00 p.m.