Search forum selection clause

Ashall Homes Limited v. ROK Entertainment Group, Inc., C.A. No. 4643-VCS (Del. Ch. Apr. 23, 2010), read opinion here.

 This Court of Chancery decision upheld a forum selection clause that required the dispute between the parties to be litigated in the Courts of the United Kingdom and to be governed by the laws of England. Notably, the Court observed that the internal affairs doctrine did not require the application of Delaware corporate law to this dispute. This instant decision spends a large proportion of its 25-pages addressing the public policy reasons why forum selection clauses are upheld including the Court’s aversion to “issue splitting”.
 

Compare a more recent Court of Chancery opinion that upheld a forum selection clause requiring the case to be litigated in Texas even though the internal affairs doctrine in that separate case did require the application of Delaware corporate law. See Baker opinion from Chancery here.

 

Weygandt v. Weco, LLC, Del. Ch., No. 4056-VCS (May 14, 2009), read opinion here

Issue Presented

The question in this case is whether a non-signatory defendant can be required to appear in a forum chosen in an agreement executed by an affiliate.

In this Chancery Court decision, the court determined that a party was subject to the personal jurisdiction of the Delaware courts based on a forum selection clause in an agreement that the party was not a signatory to, but which an affiliated party was a signatory to, based on equitable estoppel.

Background

The factual background involves the negotiated sale of an aviation repair business in California. The sale of the business included a contemporaneous lease agreement for the premises on which the purchased business was located. As a condition to closing for the purchase of the business, the lease agreement was entered into for the premises which the business occupied.  

The lease agreement was entered into by the owner of the building where the business was located, which was a different entity than the owner of the business but the same person controlled both entities. The Asset Purchase Agreement for the business contained a forum selection or “consent to jurisdiction” clause providing for exclusive personal jurisdiction over any party to the agreement in any state or federal court sitting in Delaware. The lease agreement, however, did not contain a consent to jurisdiction clause. The court reasoned that the sale of the business was to be paid for in two ways: (i) the basic purchase price of the business, and (ii) the stream of lease payments from the lease for the premises on which the business was located.

Legal Analysis

The court reiterated that on a motion to dismiss under Rule 12(b)(2), the plaintiff bears the burden of showing a basis for the exercise by the court of jurisdiction over a non-resident defendant.

The court rejected the applicability to these facts of the general rule that “agreements that are part of the same transaction are construed together.” However, the court did find applicable the equitable estoppel theory which many cases have applied to hold that a non-signatory was bound by a forum selection clause based on a three part test. First, the forum selection clause must be valid. Second,  the defendants need to be either third-party beneficiaries or “closely-related” to the relevant contract. Third, the claim must arise from the status of the defendant as closely-related to the agreement that contains the forum selection clause.

The purpose of the third prong of the three-part test is that the agreement containing the forum selection clause must also be the agreement that gives rise to the substantive claims brought by or against a non-signatory in order for the forum selection clause to be enforceable against a non-signatory. (See footnotes 13 to 15 and 18.)

The rationale for the cases that have enforced forum selection clauses against non-signatory parties are based on the principle that a third-party beneficiary or closely-related party can not enjoy the benefits of an agreement without accepting its obligations. See Capital Group Cos. v. Armour, 2004 WL 2521295 (Del. Ch. Oct. 29, 2004). See also cases collected at footnote 17.

Importantly, it is not only third-party beneficiaries, but also parties who are “closely related” to the agreement at issue that are estopped from avoiding the obligations of an agreement from which they benefit. Thus, even if an agreement expressly disclaims any third-party beneficiaries, a “closely-related party” to the agreement can still be bound by its terms even if not a signatory. See Capital Group, 2004 WL 2521295, at *6.

A party will be considered “closely related” to an agreement for purposes of binding a non-signatory if: (1) she receives a direct benefit from the program; or (2) it was foreseeable that she would be bound by the agreement. (See footnotes 18 and 19.)

Direct Benefit

In the instant case, the landlord, who was a non-signatory to the purchase agreement which contained the forum selection clause, received a direct benefit from the purchase agreement because the buyer of the business would not have entered into the lease agreement with the landlord if it was not buying the busines–and the lease was not only part of the “consideration” paid for the business, but was also a condition precedent to the purchase of the business.

Foreseeability

When a control person agrees to a forum, it is foreseeable that the entities controlled by that person which are involved in the deal will also be bound to that forum. See cases collected at footnote 25. The rationale for binding such entities rests on the public policy that forum selection clauses “promote stable and dependable trade relations” and it would be inconsistent with that policy to allow entities through which one of the parties chooses to act, to escape the forum selection clause. See cases collected at footnote 26.

If the purchaser of the business in this case was excused from buying the business because of fraud or falsity of representations and warranties, it would have no business reason or legal obligation to enter into the lease agreement which it needed only to operate the business. Thus, it was foreseeable that a dispute involving the purchase agreement and the lease agreements would have to be brought in Delaware because of the forum selection clause in the purchase agreement.

Conclusion

Any contrary result would allow for duplicative and inefficient litigation in multiple forums and undermine the benefit of predictability that was provided to the purchaser by agreeing to a forum clause in the purchase agreement. Thus, the court found that the landlord was equitably estopped from asserting that the Delaware court lacked jurisdiction.

This opinion will be helpful for the many transactions which involve multiple agreements–all of which do not contain a forum selection clause. What this agreement does not directly address, however,  is those situations where there are multiple agreements in the transaction which have different forum selection clauses, although there are other decisions that have addressed such situations.

 

In Troy Corp. v. Schoon, (Del. Ch., March 26, 2007), 2007 WL 949441, read opinion here, the Chancery Court reiterated the settled Delaware jurisprudence that forum selection clauses are enforceable but that in order to achieve their purpose, if they are meant to be exclusive, they must clearly express that intent unequivocally. The clause in this case was unequivocal in stating that the parties agreed to choose as an exclusive forum the federal court for the Southern District of New York. In this Motion to Dismiss under Rule 12(b)(3), however, the issue was joined because the complaint filed did not raise an issue of federal jurisdiction. The Chancery Court was compelled to make an unusual analysis–for a state court–about whether a federal court had jurisdiction over a particular dispute. Reasoning that there was no federal court jurisdiction (based on diversity or otherwise), and the agreement not having provided for an alternative forum, the court concluded based on the facts presented that Delaware state court was a permissible forum to adjudicate the dispute.

One lesson to be learned from this decision, especially for those drafting forum selection clauses, is that they must provide for an alternative court in the chosen state if, as in this case, the only court chosen did not have subject matter jurisdiction over the dispute.  Another example  for avoiding the result in this case arises from the following hypothetical:  if an agreement only provided for Chancery Court as a forum, it would be possible, depending on the type of claim asserted,  that the court would not have equitable jurisdiction–which cannot be created by consent of the parties–as opposed to personal jurisdiction–much like federal subject matter jurisdiction cannot be conferred by the parties. Thus, if the drafter wanted to be certain that all disputes would remain in Delaware courts, the drafter should allow for an alternative Delaware court if Chancery did not have equitable jurisdiction.

 In Cornerstone Brands, Inc. v. O’Steen, read opinion here , the Chancellor discussed, among other things,  the topic of  forum selection clauses, which are routinely upheld in Delaware. The most noteworthy aspect of this opinion, which I predict will be an often cited opinion for this reason, held that a claim for attorneys’ fees could proceed based on the breach of a forum selection clause, and an award of such damages would not contravene the American rule (which is that everyone pays their own attorneys’ fees, despite prevailing).  Thus, a motion to dismiss that claim was denied. The Chancery Court cited for support of this proposition the Delaware Supreme Court decision in El Paso Natural Gas Co. v. TransAmerican Natural Gas Corp., 669 A.2d 36, 40 (Del. 1995).  The Court also cited other decisions from other jurisdictions for support of the view that attorneys’ fees for breach of a forum selection clause may be awarded–and that is not deemed to be in contravention of the American rule.  This letter opinion also discussed the elements of promissory estoppel, as well as equitable estoppel. 

  In addition, especially notable about this case is a footnote indicating that an oral ruling in this matter was made from the bench on January 23, 2006, in which the Chancellor denied a motion to dismiss based on the following reasoning: the defendant here was a third-party beneficiary to the merger agreement in dispute, and therefore would be deemed to have consented to the forum selection clause in that agreement being litigated in the case.

 Also of  importance was the Court’s discussion of subject matter jurisdiction with reference to  DGCL  Section 111(a)(2) (granting jurisdiction for interpretation of the validity of any documents relating to the sale or creation of stock or options relating thereto); as well as 10 Del .C. Section 341 (granting the Chancery Court jurisdiction to hear and determine all matters and causes in equity);  and 10 Del. C. Section 342 (the Court of Chancery shall not have jurisdiction to determine any matter wherein sufficient remedy may be had by common law or statute before any other Court or jurisdiction of this state). 

 The Court noted three basic ways in which it can have subject matter jurisdiction: (1) One or more of the claims is equitable in character; (2) The plaintiff requests relief that is equitable in nature; or (3) If subject matter jurisdiction is conferred by statute.

UPDATE: Dan Tin, Esq. just brought to my attention the following article he wrote about forum selection clauses:   Tan, Daniel S., "Damages for Breach of Forum Selection Clauses, Principled Remedies, and Control of International Litigation" . Texas International Law Journal, Vol. 40, p. 623, 2005.  Available at SSRN: http://ssrn.com/abstract=628581

A recent seminal decision of the Delaware Court of Chancery must be included in the lexicon of every lawyer who wants to understand the boundaries of Delaware law on forum-selection clauses in corporate documents. In the case of Sciabacucchi v. Salzberg, C.A. No. 2017-0931-JTL (Del. Ch. Dec. 19, 2018), the Court determined that a forum-selection clause in a certificate of incorporation was invalid and ineffective to the extent that it purported to “require any claim under the Securities Act of 1933 to be brought in federal court” (the “Federal Forum Provisions”).

Why this Case is Noteworthy: The court reasoned in its holding that: “The constitutive documents of a Delaware corporation cannot bind a plaintiff to a particular forum when the claim does not involve rights or relationships that were established by or under Delaware’s corporate law.  In this case, the Federal Forum Provisions attempt to accomplish that feat.  They are therefore ineffective and invalid.”

Overview of Key Points:

This opinion is destined to form part of the bedrock of foundational Delaware corporate decisions and could rightly be the subject of a lengthy law review article, but for purposes of this quick blog post, I will merely highlight a few of the more notable excerpts in bullet points.

  • A substantial basis for the court’s reasoning was a prior decision from the Court of Chancery which upheld the validity of corporate bylaws that required claims based on the internal affairs doctrine and related claims to be brought exclusively in the Court of Chancery. That decision by the current Chief Justice of Delaware, writing at the time as the Chancellor, was Boilermakers Local 154 Retirement Fund v. Chevron Corp., 73 A.3d 934 (Del. Ch. June 25, 2018).
  • Although the Boilermakers case involved bylaws, the Sciabacucchi decision explained why that same reasoning applied to a certificate of incorporation which is governed by similar provisions in the Delaware General Corporation Law (DGCL). The court in Sciabacucchi explained that the reasoning in Boilermakers focused on the ability to enforce forum-selection clauses that related to the internal corporate matters of a Delaware corporation as opposed to external matters, such as claims arising under the Securities Act of 1933.
  • The Court buttressed its reasoning by referring to the codification of the Boilermakers decision, shortly after its publication, by means of the adoption of a new Section 115 of the DGCL. In connection with that new DGCL section, the Delaware General Assembly also passed new amendments to Sections 102 and 109 of the DGCL which prohibit fee-shifting provisions in the certificate of incorporation or bylaws particularly in connection with claims related to the internal affairs of a corporation as defined by DGCL Section 115.
  •  The Court’s reasoning was also supported by reference to what the court referred to as “first principles.” Those first principles included several basic tenets of corporate law such as the following: (i) Although the document filed with the state that gives rise to an artificial entity such as a corporation, and confers powers on it, is a contract, it is not an ordinary private contract among private actors; (ii) The certificate of incorporation is a multi-party contract that includes the State of Delaware. Unlike an ordinary contract, it also includes terms by reference that are imposed by the DGCL; (iii) Unlike an ordinary contract, a charter can only be amended to the extent that it complies with the DGCL; (iv) The DGCL specifies what provisions a charter may or may not include; and (v) Although the courts enforce both types of contracts, when enforcing relationships created by the corporate contract, the courts use an overlay of fiduciary duty. See pages 38 to 42 and footnotes 111 to 125.
  • A thorough analysis of the contours and policy behind the internal affairs doctrine is an important feature of this opinion. See, e.g., pages 41-46.

In sum, the court reasoned that the “constitutive documents of a Delaware corporation cannot bind the plaintiff to a particular forum when the claim does not involve rights or relationships that were established by or under Delaware’s corporate law.” The opinion provides extensive citations to substantial scholarship, case law and statutes.

Prof. Ann Lipton provides extensive insights in her blog post about this case with links to her articles on the topic. The good professor’s scholarship on this issue was also cited by the court in the above opinion.

Many cases have been highlighted on this blog regarding forum-selection clauses in private agreements. See, e.g., here and here. In some of the posts on these pages about cases involving forum-selection clauses, a graphic of the Roman Forum adds color as well as an etymological connection.

SUPPLEMENT: Professor Stephen Bainbridge, a prolific corporate law scholar, kindly links to this post on his blog.

A recent Delaware Court of Chancery decision recognized that a non-signatory to an agreement may enforce the provisions of a forum-selection clause under certain conditions. Although this holding is counterintuitive, there are other Delaware decisions which recognize that in some circumstances a non-signatory to an agreement may either enjoy the benefits of that agreement or may enforce certain terms of that agreement. See, e.g., selected cases addressing this topic on this blog over the last 13 years.

In the case of Lexington Services Ltd. v. U.S. Patent No. 8019807 Delegate, LLC, C.A. No. 2018-0137-TMR (Del. Ch. Oct. 26, 2018), two important principles of Delaware law regarding enforceability of forum-selection clauses were explained. This case involved multiple litigations in several jurisdictions, including a foreign country, regarding the disputed transfer of rights in a U.S. patent.  (The photo nearby of the Roman Forum seems appropriate to add color to an overview of a case involving a forum-selection clause.)

The first principle of well-established Delaware law recognized in this decision was the enforceability generally in Delaware of forum-selection clauses.  They are regarded as presumptively valid and should be specifically enforced absent a showing that the enforcement would be unreasonable and unjust for reasons such as fraud. See footnote 28.  Mere inconvenience or additional expense is not the test of unreasonableness. Id.

Next, this decision recognizes that Delaware law allows non-signatories to invoke forum-selection clause provisions in an agreement where they are “closely related to one of the signatories such that a non-party’s enforcement of the clause is foreseeable by virtue of the relationship between the signatory and the parties sought to be bound.” See footnote 43.  Citing well-settled case law, the court added that, for example, officers and directors of an entity subject to a forum-selection clause may invoke its benefits because they were closely involved in the creation of the entity and because they were being sued as a result of acts that directly implicated the negotiation of the agreement that lead to the entity’s creation. See footnote 44.  Likewise in this case, the defendant is an entity created to receive the patent, and the ownership of the patent and assignment to a different entity such as the defendant was foreseen in the applicable agreement.  The party being sued for his actions as a manager of the defendant entity was foreseeable and is closely related to the agreement.

Relying on prior cases, the court noted that it typically grants motions to dismiss under Court of Chancery Rule 12(b)(3) based upon a forum-selection clause where the parties use express language clearly indicating that the forum-selection clause excludes all other courts before which those parties could otherwise properly bring an action. See footnote 31.  In this case, the court imposed a stay due to the possibility that one or more issues would return to Delaware after certain aspects of the case were resolved in the original non-Delaware forum called for in the agreement.

In Greetham v. Sogima L-A Manager, LLC, et al., 2008 Del. Ch. LEXIS (Nov. 3, 2008), read opinion here, the Delaware Chancery Court addressed three legal issues that are of substantial practical importance in many corporate and commercial litigation cases, and the court’s rulings are also useful tools for the toolbox of those who labor in the fields of business litigation.

First, the court upheld a clause in an agreement that made Delaware law govern any issues that arose, and that also required the parties to litigate in Delaware Chancery Court. In addition to cases cited in support for this well-recognized position in Delaware, reference was made to the specific Delaware statute that provides authority for allowing parties to consent to the jurisdiction of the Delaware courts as long as at least $100,000 is in dispute. See Section 2708 of Title 6 of the Delaware Code.

Second, the court determined that the irreducible minimum elements of an enforceable contract were not evident in the record after trial and therefore the court rejected the contract claim. Notably, the court recognized that customs in a particular industry and/or prior practice of  the parties may in some instances serve as evidence of "missing terms" in an agreement.

Finally, the court recited the elements of promissory estoppel and found them wanting.

 In an abbreviated and conclusory fashion, the factual basis of this case, which was extensively described by the court, began with a group of eight people who started a company that was to invest in municipal tax liens. However, among the problems that arose was the failure of the parties to confirm in writing all the terms of all the various additional "agreements" that were allegedly intended to "flesh out" the details of each of the roles that the parties would play in their venture. In addition, not all the parties who were required to contribute capital had that capital available at the time of closing on the deal.

The court also rejected an "unclean hands" defense.

 

 

A recent Delaware Court of Chancery decision determined that the forum clause in the Tesla bylaws, after its redomestication in Texas, requiring derivative suits to be brought in Texas, would be upheld even though the lawsuits at issue were filed shortly before the Tesla shareholders approved the change and despite the suits being filed when the applicable Delaware bylaws required the forum to be Delaware.

In the matter styled In re Tesla, Inc. Derivative Litigation, Cons., C.A. No. 2024-0631-BWD (Del. Ch. April 13, 2026), the court discussed the established authority permitting forum clauses to be enforced even when adopted for a period of time after the lawsuits at issue were filed.

Brief Background

The derivative litigation at issue was filed at a time when the bylaws of Tesla designated Delaware as the exclusive forum for derivative litigation. After its redomestication, the new Tesla bylaws designated Texas as the exclusive forum for derivative litigation. The lawsuits involved were filed before Tesla’s new bylaws with a Texas forum clause, as approved by their stockholders, became effective.

Highlights of Court’s Analysis

The court recognized that there is precedent for courts to look to later points in time when determining venue, such as when a defendant appears or a time when a movant seeks transfer.

The court refused to second-guess Tesla stockholders’ chosen forum by purporting to weigh the advantages and disadvantages of Texas law and procedure relative to Delaware. The court emphasized that the owners of the corporation voted to require the derivative litigation be filed in a Texas forum and that, based on the present facts, it was not inequitable to enforce their decision.

Key Principles

  • The court recognized that the proper procedural rubric for addressing a motion to dismiss based on a forum selection clause is found in the improper venue provision of Rule 12(b)(3).
  • Forum selection provisions, including corporate bylaws, are presumptively valid and should be specifically enforced unless the resisting party “clearly shows that enforcement would be unreasonable and unjust or that the clause is invalid for such reasons as fraud and overreaching.” Slip op.at 9.
  • The court recited relevant authority recognizing that courts sometimes look to later points in time when determining venue. Slip op. at 13. The court also referred to other jurisdictions applying Delaware law to enforce forum selection clauses adopted after the derivative litigation was filed. Id.
  • The court relied on settled Delaware law that a forum selection bylaw may apply retroactively to cover claims arising from conduct that occurred prior to the adoption of the bylaws. Slip op. at 14.
  • The court explained that:

“a stockholder does not have a vested right to litigate in a particular forum, even for claims arising from past conduct, because the contractual relationship among the directors, officers, and stockholders formed within the statutory framework of the DGCL is, by design, flexible and subject to change in the manner that the DGCL spells out, and investors know about when they purchased stock in a Delaware corporation.”

Slip op. at 14.

  • The court further observed that: “a stockholder should hold the reasonable expectation that the board could adopt such a bylaw at any time, subject to an as-applied challenge.” Id.
  • The court rejected arguments that Section 266(a) of the DGCL was violated, in part because plaintiffs never had any vested rights or an obligation to litigate in a particular forum because as the court instructed: “Our corporate law has long rejected the so-called ‘vested rights’ doctrine, the notion that a corporation’s governing documents cannot be amended in a manner that diminishes or divests pre-existing stockholder rights.” Slip op. at 19.
  • The court also rejected a claim that DGCL Section 115 was violated. Section 115 deals with a prohibition against bylaws prohibiting the filing of internal corporate claims in Delaware, but the court reasoned that Section 115 does not apply in in this matter because the statute governs Delaware corporations and Tesla was not incorporated in Delaware when it adopted the Texas forum bylaw. Slip op. at 21.
  • Finally, the court also rejected the argument, based on the facts of this case, that the Texas bylaw was unreasonable or unjust based on a comparison of Texas and Delaware law because:

Courts are ill-equipped to quantify the cost and benefits of one state’s corporate governance regime over another’s, and attempting to do so risks intruding on the value judgments of state legislatures and directors, as well as stockholders.”

Slip op. at 24 (quoting Maffei v. Palkon, 339 A.3d 705, 743-44 (Del. 2025)). Some citations and quotes omitted.

Delaware will retain jurisdiction over a dissolution claim notwithstanding a mandatory New York forum selection clause, according to the recent Delaware Court of Chancery opinion in Seokoh, Inc. v. Lard-PT, LLC, C.A. No. 2020-0613-JRS (Del. Ch. March 30, 2021). This case involved the petition for dissolution of a Delaware LLC while litigation between the parties also was filed in New York. The LLC agreement had a deadlock provision but it was not effective for resolving the parties’ dispute. For example, there was no formula or deadline for a buyout.

Several important statements of Delaware law make this 45-page decision noteworthy (and blogworthy), as well as well-worth the time to read the whole opinion for those who need to know the latest iteration of Delaware law on the following topics:

  • Although Delaware courts generally enforce forum selection clauses, even when they require disputes to be litigated in a foreign forum–this is a notable exception: when a petition for dissolution of a Delaware LLC is filed pursuant to Section 18-802 of the Delaware LLC Act. See footnote 43. (The parties in this case agreed to the foregoing exception and the Court noted that they were correct in doing so.)
  • This opinion features a useful recitation of the factors the court will consider under Section 18-802 in order to determine if the statutory prerequisites for an LLC dissolution have been satisfied. See Slip op. at 24 to 27 and footnotes 119 to 128.

A recent blog post highlighted on these pages featured another Chancery decision addressing a deadlock in an LLC that formed the basis of a dissolution petition.

The Delaware Supreme Court recently issued a highly anticipated decision in Salzberg v. Sciabacucchi, No. 346-2019 (Del. Mar. 18, 2020).  Many law professors and other commentators have written much learned commentary and published extensive scholarly analysis of the issues raised in the Court of Chancery’s decision, and have opined on what the Supreme Court was likely to decide in this case–and how the commentators thought the appeal should be decided.  Moreover, I expect that there will be a flood of additional learned commentary and analysis about this decision in the near future.  See, e.g., recent analysis of the Supreme Court’s opinion in this case by Professor Bainbridge for the Washington Legal Foundation.

Therefore, I will only limit this post to a few highlights that should be an incentive to read all 53-pages of the court’s opinion, to which a full-length law review article could easily be devoted. The photo nearby features one of the oldest venues, the Roman Forum.

The highlights of the Chancery decision in this case can be found on these pages.

Federal Forum Clause at Issue:

Delaware’s High Court referred to the Federal Forum Selection Provisions in the certificate of incorporation of the several companies whose charter provisions were jointly challenged in this case.  In essence, the clauses purported to require that the U.S. Federal District Court would be the sole and exclusive forum for the resolution of any complaint arising under the Securities Act of 1933 and that any person purchasing shares of stock in the companies with those provisions consented to the forum selection provision.

Highlights of Court’s Analysis:

The court began its analysis with the text of Section 102 of the DGCL which governs matters contained in the certificate of incorporation.  The court emphasized that Section 102(b)(1) authorizes two broad types of provisions:  (i) Any provision for the management of the business and for the conduct of the affairs of the corporation; and (ii) Any provision creating, defining, limiting and regulating the powers of the corporation, the directors and the stockholders, or any class of the stockholders, . . . if such provisions are not contrary to the laws of this State.

The Delaware Supreme Court reviewed several key U.S. Supreme Court decisions and prior decisions of the Delaware Supreme Court, including the recent SCOTUS opinion in Cyan, Inc. v. Beaver County Employees Retirement Fund, 138 S. Ct. 1061, which held that federal and state courts have concurrent jurisdiction over class actions based on the 1933 Securities Act and that such claims are not removable to federal court.

Highlights of Court’s Decision:

  • The court determined that DGCL Section 115 did no alter the scope of DGCL Section 102(b)(1). Section 115 was added as an amendment to the DGCL in 2015 and was intended to codify the Boilermakers Chancery decision to preclude a charter or bylaw provision from excluding Delaware as a forum for internal corporate claims.  Slip op. at 16-17.
  • The opinion employs general principles of statutory construction of widespread applicability and usefulness. See Slip op. at 18-24.
  • Readers will enjoy a “deep dive” into the internal affairs doctrine. The appellate analysis concluded that the Court of Chancery’s opinion defined “internal affairs” too narrowly. See Slip op. at 31-38.  See also footnote 124-126 and related text, referring to the internal affairs doctrine as a principle of “serious constitutional proportions; not just a conflict of laws matter.”
  • The decision features a thorough discussion of why Section 102(b)(1) is more expansive than Section 115–the latter focuses on internal corporate claims. See Slip op. at 38.
  • The court described the facial challenge of constitutionality in this matter and concluded that the provision at issue neither violated federal law nor federal policy. See Slip op. at 43.
  • Both Delaware case law and decisions of the U.S. Supreme Court were relied on for the well-established presumption of enforceability of forum selection clauses. See footnotes 136-139 and accompanying text.
  • Especially notable is footnote 169, which addressed a concern that many had during the appeal of this case: enforcing the federal forum provision in this matter would, perhaps by analogy, “open the flood gates” for arbitration clauses in charters. But the Supreme Court explained that at least in terms of forum selection clauses for claims involving Delaware corporate internal affairs, in part based on the synopsis of Section 115, such a concern was unfounded.