Resolving Conflicts of Jurisdiction: Party Choice

Case: Scherk v. Alberto-Culver Co. (1974)

417 U.S. 506, 94 S.Ct. 2449, 41 L.Ed.2d 270

Notes:

· What did Scherk do that was a legal violation?

· Forum Selection clause - Stipulated that dispute would be brought to Int'l
arbitration Panel in Paris
· Agreement says applying Illinois law
· But claim was brought in Illinois

· D filed motion to dismiss case in IL, so that proceedings could be in Paris

○ What does court do?
§ Forum selection clause is enforced in this case
§
○ Why?
§ They are going to enforce here, even though they would be hesitant to
do so in domestic cases
§ Int'l vs. domestic
□ Why are domestic transactions diff from int'l transactions?
® Easier to apply the law. Less of disincentive for
businesses to enter into agreements
◊ But in int'l, more multiple laws, etc. more
uncertainty of what law or forum to be utilized may be a disincentive to enter
into business agreements, so important to uphold the forum selection clauses, so
that parties will enter into agreements more readily if they know exactly the
forum and the law
§ Especially strong claim for enforcement, b/c it was an arbitration
panel
□ More neutrality, not tied to a particular govt
□ Parties may have a role in choosing the arbitrators
□ More incentive for parties to engage in transactions too
§ Freedom of K
□ Also important that this was negotiated
□ Court not so much persuaded by this, and instead goes further
and looks at public policies, etc.