Chubb Insurance Australia Limited v. Accellion, Inc.

Background

Chubb Insurance Australia Limited sued Accellion, Inc. as the subrogee of an insured Australian law firm. The complaint asserted claims for breach of contract, declaratory judgment concerning contractual indemnification, and negligence. The claims arose from a file transfer agreement between the insured and Accellion and a later letter agreement involving the insured, Accellion, and Accellion Pte Limited.

The file transfer agreement selected the state and federal courts in Santa Clara County, California, as the exclusive forum. The later letter agreement stated that it was governed by New South Wales law and that the parties agreed to the exclusive jurisdiction of courts in New South Wales, Australia.

Forum-selection clauses

Accellion argued that the later agreement was a novation—a replacement of the earlier contract—and that its Australian forum-selection clause therefore controlled. Chubb argued that the later agreement merely modified the earlier contract and did not replace the California forum-selection clause.

The court held that the letter agreement was a novation. It reasoned that the earlier agreement was valid, all relevant parties entered the later agreement, and the later agreement clearly stated that Accellion was replaced by Accellion Pte Limited under the earlier agreement. The court also found that Accellion’s new guarantee and indemnification obligations were part of the later agreement. Because the earlier obligations were extinguished and the later agreement controlled, the court held that the Australian forum-selection clause applied to Chubb’s claims.

Motion and further briefing

Accellion moved to dismiss under Federal Rule of Civil Procedure 12(b)(3), which addresses improper venue. The court agreed with Chubb that Rule 12(b)(3) was not the proper method for enforcing the forum-selection clause. Because Accellion maintained its headquarters in the Northern District of California, the court found that venue was proper there. The court explained that the appropriate method for enforcing the clause was a motion based on forum non conveniens, a doctrine that can allow dismissal when another forum is more appropriate.

The court converted Accellion’s Rule 12(b)(3) motion into a motion to dismiss on forum non conveniens grounds. Because the parties had not fully briefed that issue, the court ordered supplemental briefs of no more than six pages by September 13, 2023, and stated that it would then take Accellion’s motion under submission. The order did not grant or deny dismissal under forum non conveniens.