Forum Selection Clause Must Be Enforced

Dispute Resolution Journal, Aug-Oct 2005

The 1st Circuit recently held that a forum selection clause in a medical supply distribution agreement specifying that arbitration take place in Tennessee should have been enforced by the district court, despite the bankruptcy court's order that the arbitration take place where a bankruptcy proceeding was pending and the distributorship was located.

The court found in In re Gregory Anthony Mercurio Jr., No. 04-1832 (1st Cir. March 25, 2005), that the bankruptcy trustee, who stood in the debtor's shoes, failed to show it would be unreasonable to enforce the forum clause. The trustee alleged that arbitrating in Tennessee would be inconvenient but the 1st Circuit found that these allegations were insufficient to disregard the plain language of the forum clause.