George V Eatertainment S.A. v. Elmwood Ventures LLC

Background

George V Eatertainment S.A. and Creative Design FZ LLC sued Elmwood Ventures LLC and Arkady Vaygensberg. The claims involved two license agreements authorizing Elmwood to operate a BUDDHA-BAR location in New York City. The complaint asserted breach of contract, federal trademark and trade-dress infringement and counterfeiting, federal unfair competition, and common-law trademark and trade-dress infringement and unfair competition.

The agreements required Elmwood to provide financial statements and pay fees and royalties. They also contained identical provisions stating that disputes arising out of or connected with the agreements would be governed by English law and that the parties irrevocably submitted to the exclusive jurisdiction of the Courts of London. The plaintiffs alleged that the agreements terminated after Elmwood failed to cure defaults and that Elmwood continued operating the restaurant and using the BUDDHA-BAR marks and concept without authorization.

The defendants moved to dismiss, relying in part on the London forum-selection clauses. A forum-selection clause identifies the court where disputes must be litigated. The plaintiffs also moved for a preliminary injunction.

Court’s analysis

The court treated the defendants’ motion under Federal Rule of Civil Procedure 12(b)(3) as a motion to dismiss under the doctrine of forum non conveniens, which permits dismissal when the parties selected a different adequate forum. The court applied federal law and general contract principles to interpret the forum-selection clauses because neither side relied on distinctive aspects of English law, even though the agreements selected English law.

The court found that the clauses were reasonably communicated because the plaintiffs signed the agreements. It also found the clauses mandatory because they required submission to the exclusive jurisdiction of the Courts of London.

The court held that the clauses covered all of the plaintiffs’ claims. The contract claim directly concerned the agreements. The trademark, trade-dress, and unfair-competition claims concerned Elmwood’s use of the BUDDHA-BAR trademarks and concept at the restaurant—the subject of the licensing relationship. The court also held that the clauses applied even if the agreements had terminated. It reasoned that the dispute concerned rights and obligations arising from the agreements, including post-termination obligations, and that allowing one side to end the agreement and thereby eliminate the forum clause would undermine the dispute-resolution provision.

The court then considered whether the plaintiffs had overcome the clauses’ presumptive enforceability. The plaintiffs did not argue that the clauses resulted from fraud, that English law was fundamentally unfair, or that enforcement violated a strong public policy. They argued mainly that London was inconvenient because it was much farther from the New York restaurant. The court found that this inconvenience did not deprive the plaintiffs of a meaningful opportunity to litigate, particularly because the business relationship was international. The court therefore concluded that enforcing the clauses would not be unfair, unjust, or unreasonable.

Disposition

Judge Jennifer L. Rochon granted the defendants’ motion to dismiss on the grounds of forum non conveniens. The court denied the plaintiffs’ motion for a preliminary injunction as moot, directed the clerk to close all open motions and deadlines, and closed the case.