will depend on how the redemption term of the IDBs is
The Terms of Offer of the IDBs state that "[t]he Courts in
India and the United States of America only shall have
jurisdiction in respect of all matters of disputes about the
IDBs."*fn1 The Terms of Offer were not negotiated by plaintiffs.
Plaintiffs accepted the Terms of Offer as presented by defendant
by purchasing IDBs.
Defendant must make the difficult showing that enforcement of
the forum selection clause would be "unreasonable or unjust" or
that the clause was the product of "fraud or overreaching" to
avoid the enforcement of the forum selection clause. M/S Bremen
v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 1916, 32
L.Ed.2d 513, 523 (1972). The difficulty of making such a showing
is particularly great in this case because the defendant drafted
the language consenting to jurisdiction in the courts of the
United States. Plaintiffs are contractually bound to bring any
action relating to the IDBs in a United States or Indian court.
Plaintiffs have complied with that obligation. Since SBI has a
branch in New York, SBI drafted the clause at issue, and SBI
solicited the purchase of IDBs in this country, enforcing the
forum selection clause in this case is not so "unreasonable or
unjust" as to justify setting it aside.
Defendant argues that the forum selection clause is
"permissive" rather than "mandatory" and that, therefore, the
M/S Bremen standard does not apply. Blanco v. Banco Indus. de
Venezuela, S.A., 997 F.2d 974, 979 (2d Cir. 1993). But an
examination of Blanco shows that defendant's characterization
of the forum selection clause in this case is erroneous. In
Blanco, the forum selection clause stated that an action "may
be brought" in one of four listed jurisdictions. The Court of
Appeals read the word "may" as permissive language. Indeed, the
Second Circuit emphasized that a forum selection clause
identifying a number of permissible fora could be mandatory if
the words used were words of command. Blanco, 997 F.2d at 979
("We reach this conclusion solely because of the nonmandatory
words the parties chose to express their agreement, and not . . .
because the permissive clause contemplates more than one
This forum selection clause, in contrast, limits available fora
to courts in the United States and India only. This clause uses
the word "shall," thereby consenting to jurisdiction in the
courts of the United States and India, and uses the word "only,"
thereby making those courts the exclusive fora that may decide
disputes arising from the IDBs. The combination of these words
makes the clause mandatory. The plaintiffs have chosen a forum in
compliance with a contractual obligation that the defendant
drafted. The defendant will not now be heard to complain that the
United States is an inconvenient forum.
Even if normal forum non conveniens analysis applied in this
case, defendant has not shown that the balance of both public and
private interests weighs so strongly in its favor that
plaintiffs' selection of a forum to which defendant has consented
should be overturned.
Defendant drafted a mandatory forum selection clause consenting
to be sued in the United States. It cannot now complain that
India is the only convenient forum for this action. Moreover,
defendant has not made the strong showing required to prevail on
a motion to dismiss for forum non conveniens. Accordingly,
defendant's motion is denied.