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D&S Consulting, Inc. v. Kingdom of Saudi Arabia, 18-7140 (2020)

Court: Court of Appeals for the D.C. Circuit Number: 18-7140 Visitors: 24
Filed: Jun. 19, 2020
Latest Update: Jun. 19, 2020
Summary: United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued September 19, 2019 Decided June 19, 2020 No. 18-7140 D&S CONSULTING, INC., (DSCI), A NEW JERSEY CORPORATION, APPELLANT v. KINGDOM OF SAUDI ARABIA, HIS EXCELLENCY ADEL BIN AHMED AL-JUBEIR, MINISTER OF FOREIGN AFFAIRS, APPELLEE Appeal from the United States District Court for the District of Columbia (No. 1:17-cv-00787) Richard S. Sternberg argued the cause for appellant. With him on the brief was D. Cory Bilton. Alexandra
More
 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued September 19, 2019             Decided June 19, 2020

                        No. 18-7140

      D&S CONSULTING, INC., (DSCI), A NEW JERSEY
                   CORPORATION,
                    APPELLANT

                             v.

  KINGDOM OF SAUDI ARABIA, HIS EXCELLENCY ADEL BIN
    AHMED AL-JUBEIR, MINISTER OF FOREIGN AFFAIRS,
                     APPELLEE


        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:17-cv-00787)


    Richard S. Sternberg argued the cause for appellant. With
him on the brief was D. Cory Bilton.

     Alexandra E. Chopin argued the cause for appellee. With
her on the brief was Mitchell R. Berger.

    Before: SRINIVASAN, Chief Judge, TATEL, Circuit Judge,
and GINSBURG, Senior Circuit Judge.

    Opinion for the Court filed by Chief Judge SRINIVASAN.
                               2
     SRINIVASAN, Chief Judge: D&S Consulting, Inc., (DSCI)
entered into an agreement to perform services for the Kingdom
of Saudi Arabia. The contract provided that the Board of
Grievances, a Saudi Arabian administrative court, “shall be
assigned for settlement of any disputes” arising out of the
contract. DSCI later filed an action against the Kingdom in
D.C. Superior Court. The Kingdom removed the case to
federal district court and filed a motion to dismiss the
complaint on the grounds of forum non conveniens, pointing to
the forum-selection clause in the parties’ contract.

     The district court granted the Kingdom’s motion, holding
that the contract’s forum-selection clause is mandatory and that
the dispute thus belonged before the Board of Grievances. We
agree and affirm.

                               I.

     In February 2013, DSCI, a New Jersey corporation,
submitted a bid to the Kingdom of Saudi Arabia to perform as
the prime contractor on certain wireless communication
projects for the Saudi Ministry of the Interior. DSCI won the
government contract, and the parties executed their agreement
in Riyadh. The parties agreed that performance would occur in
Saudi Arabia, the contract would be governed by Saudi law, all
books and records would be kept in Arabic in Saudi Arabia,
and payment would be made in Saudi riyals.

    This case concerns the contract’s forum-selection clause,
which states in relevant part:

       “The grievance council shall be assigned for settlement
       of any disputes or claims arising from the execution of
       this cont[r]act, or related to this contract, or resulting
       from its dissolution.”
                               3

D&S Consulting, Inc. v. Kingdom of Saudi Arabia, 322 F.
Supp. 3d 45, 48 (D.D.C. 2018). The “grievance council” is the
Board of Grievances, an administrative court in Saudi Arabia.
The Board has jurisdiction over government contract claims
brought against the Kingdom.

     Notwithstanding the contract’s forum-selection clause,
DSCI now seeks to bring contract-related claims against the
Kingdom in the United States. In 2015, during the contract’s
performance period, DSCI became insolvent and surrendered
control of its assets to its secured creditor. According to DSCI,
in the process of resolving its outstanding debts and
receivables, it identified two uncollected invoices totaling
$2,108,404.69 for work completed under the contract and
submitted them to the Kingdom for payment. After the
Kingdom refused to pay, DSCI filed a complaint in the
Superior Court of the District of Columbia alleging breach of
contract and unjust enrichment.

     The Kingdom removed the case to the United States
District Court for the District of Columbia. The Kingdom then
filed a motion to dismiss the complaint on grounds of forum
non conveniens, arguing that the forum-selection clause
required the parties to bring any contract-related claims before
the Board of Grievances in Saudi Arabia. The district court
granted the Kingdom’s motion to dismiss the complaint, see
id. at 52,
and DSCI now appeals.

                               II.

     As the Supreme Court has instructed, “the appropriate way
to enforce a forum-selection clause pointing to a state or
foreign forum is through the doctrine of forum non
conveniens.” Atl. Marine Constr. Co. v. U.S. Dist. Court for
                               4
W. Dist. of Texas, 
571 U.S. 49
, 60 (2013). In particular, “if the
plaintiff has entered into a contract to litigate his claims in a
specific forum, the defendant may enforce that agreement by
moving to dismiss for forum non conveniens.” Azima v. RAK
Inv. Auth., 
926 F.3d 870
, 874 (D.C. Cir. 2019).

     A “valid forum-selection clause” is “given controlling
weight in all but the most exceptional cases.” Atl. 
Marine, 571 U.S. at 63
(internal citation omitted). Accordingly, if a “forum-
selection clause is applicable, mandatory, valid, and
enforceable, the court must almost always grant [a] motion to
dismiss” on forum non conveniens grounds. 
Azima, 926 F.3d at 874
.

     In this case, there is no dispute that the forum-selection
clause is applicable, valid, and enforceable. With regard to
applicability, the clause covers “any disputes or claims . . .
related to this contract, or resulting from its dissolution,” D&S
Cons., 
Inc., 322 F. Supp. 3d at 48
, and the claims brought by
DSCI fall squarely within that language: the claims are for
breach of contract and unjust enrichment concerning unpaid
invoices for work performed under the contract. DSCI thus
makes no argument that the matter in dispute lies outside the
forum-selection clause’s substantive reach. Nor has DSCI
disputed the clause’s validity or enforceability. See
id. at 50
(“In opposing the motion to dismiss, DSCI does not contend
that the forum-selection clause is invalid or unenforceable.”).

     Rather, the sole issue is whether the forum-selection clause
is “mandatory.” 
Azima, 926 F.3d at 874
. In the case of a
mandatory clause, a court will enforce the clause except in the
“most unusual or rare” instance in which the public interest
requires “disrupting the parties’ settled expectations as
reflected in the forum-selection clause.”
Id. at 875–76
(formatting modified and internal citation omitted); see Atl.
                                5
Marine, 571 U.S. at 63
–64. But if a forum-selection clause is
“permissive” rather than mandatory, a district court performs
the standard forum non conveniens analysis, under which “the
defendant must show that the case can and should proceed” in
a jurisdiction other than where the plaintiff brought it. 
Azima, 926 F.3d at 874
–75. We review de novo whether a forum-
selection clause is mandatory and then review for abuse of
discretion a district court’s ultimate decision to grant or deny a
motion to dismiss for forum non conveniens. See
id. at 876.
      A forum-selection clause is “mandatory” if it “requires
that litigation proceed in a specific forum,” and is “permissive”
if it “permits litigation to occur in a specified forum but does
not bar litigation elsewhere.”
Id. at 874.
With a permissive
forum-selection clause, the parties waive their right to contest
jurisdiction in the specified forum should any covered disputes
be brought there, establishing at least one agreed-upon place to
bring a claim. If a clause is mandatory, by contrast, the
specified forum marks the only place to bring a covered claim.
Whether a clause is mandatory or permissive is a matter of
basic contract interpretation. See Phillips v. Audio Active Ltd.,
494 F.3d 378
, 386 (2d Cir. 2007).

     Here, the forum-selection clause states in pertinent part:
“The grievance council shall be assigned for settlement of any
disputes or claims arising from the execution of this cont[r]act,
or related to this contract, or resulting from its dissolution.”
D&S Cons., 
Inc., 322 F. Supp. 3d at 48
. That clause is
mandatory, requiring that any dispute be brought before the
“grievance council,” i.e., the Board of Grievances in Saudi
Arabia. The clause does more than merely give the Board
jurisdiction if a party were to opt to bring a dispute there for
resolution. Rather, it says that either party must bring any
covered claim before the Board.
                                6
     We have interpreted closely similar language to establish
a mandatory forum rather than merely a permissible one. In
Marra v. Papandreou, we determined that a forum-selection
clause stating that “any dispute[s] . . . shall be settled by the
Greek courts” was mandatory rather than permissive. 
216 F.3d 1119
, 1120–21, 1124 (D.C. Cir. 2000) (emphasis added). Here,
we similarly construe similar operative language: “shall be
assigned for settlement.” By agreeing that they “shall” assign
the “settlement” of any covered claim to the Board of
Grievances, the parties agreed to resolve any covered claims
before the Board, to the exclusion of any other forum.

     In resisting that conclusion, DSCI notes that the forum-
selection clause does not contain language expressly excluding
other fora. No magic words, though, are required to establish
a mandatory clause. To be sure, one way to make a clause
mandatory is to specifically refer to the designated forum as
“exclusive” of other fora. E.g., 
Azima, 926 F.3d at 876
(“the
Parties submit to the exclusive jurisdiction of the courts of
England and Wales”). But the parties can also make clear in
other ways that the specified forum is exclusive. For instance,
the forum-selection clause we considered in Marra simply
stated that any disputes “shall be settled by the Greek 
courts.” 216 F.3d at 1121
.

     DSCI raises a number of concerns about the adequacy of
the Board of Grievances as a forum for resolution of its claims
against the Kingdom. DSCI contends, for instance, that Saudi
Arabia is an unsafe place to travel, that the judicial system there
is neither transparent nor independent, and that the system
discriminates against foreign parties and follows deficient
substantive and procedural rules. But in the case of mandatory
forum-selection clause, “we need not ask whether the location
it identifies is available, adequate, or best for the parties’
private interests.” 
Azima, 926 F.3d at 875
. Rather, the parties
                               7
“have already told us that it meets these criteria” by “agreeing
to litigate there,” and “we can assume that they selected” a
forum “adequate to litigate their claims and to protect their
private interests.” Id.; see Atl. 
Marine, 571 U.S. at 64
. Indeed,
while DSCI asserts safety and fairness concerns about litigating
its dispute in Saudi Arabia, DSCI traveled there to execute a
contract with the Kingdom under which it would perform work
there over a period of several years.

     Because “private-interest factors weigh entirely in favor of
the preselected forum” in the case of a mandatory forum-
selection clause, a court “may consider arguments about
public-interest factors only.” Atl. 
Marine, 571 U.S. at 64
.; see
Azima, 926 F.3d at 875
. Those public-interest factors include
considerations like administrative convenience, judicial
economy, a forum’s familiarity with applicable law, and its
interest in hearing the case. See Atl. 
Marine, 571 U.S. at 63
n.6; Piper Aircraft Co. v. Reyno, 
454 U.S. 235
, 241 n.6 (1981);
Azima, 926 F.3d at 875
. And the public-interest factors will
suffice to overcome the parties’ agreement to bring their claims
in the designated forum only in “unusual cases.” Atl. 
Marine, 571 U.S. at 64
; 
Azima, 926 F.3d at 875
.

     This is not such a case. DSCI bore “the burden of showing
that public-interest factors overwhelmingly disfavor a transfer”
to the agreed-upon forum. Atl. 
Marine, 571 U.S. at 67
. DSCI,
though, has made no effort to carry that burden, failing to put
forward any argument that public-interest considerations
weigh against enforcing the forum-selection clause in its
contract with the Kingdom. That is unsurprising, as the Board
of Grievances seemingly would have a significant interest in
hearing a dispute about a contract performed in Saudi Arabia,
and the Board presumably is better equipped than a United
States court to apply Saudi law, as is required by the contract’s
choice-of-law provision. The district court thus acted well
                             8
within its discretion in enforcing the parties’ agreement to
settle their dispute before the Board.

                     *   *   *    *   *

     For the foregoing reasons, we affirm the judgment of the
district court dismissing DSCI’s complaint on the grounds of
forum non conveniens.

                                                 So ordered.

Source:  CourtListener

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