Forum Selection Clause

A forum selection clause (sometimes called a choice-of-court or jurisdiction clause) designates the specific court, country, or arbitral seat in which contracting parties commit to litigate future disputes. It is distinct from a choice-of-law clause, which selects the substantive law governing the contract; a forum clause selects where the dispute is heard, not which law applies — though the two are frequently paired.

Forum selection clauses can be exclusive (disputes must be brought in the named forum) or non-exclusive (the named forum is available but not mandatory). Courts generally distinguish the two carefully because the consequences for parallel proceedings differ.

In the United States, the Supreme Court's decision in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), established that forum selection clauses in international commercial contracts are prima facie valid and enforceable unless shown to be unreasonable. Atlantic Marine Construction Co. v. U.S. District Court, 571 U.S. 49 (2013), reinforced that valid clauses should almost always be honored through transfer under 28 U.S.C. § 1404(a).

At the international level, the Hague Convention on Choice of Court Agreements (concluded 30 June 2005, in force 1 October 2015) obliges contracting states to enforce exclusive choice-of-court agreements in civil and commercial matters and to recognize the resulting judgments. Parties include the EU, the UK, Singapore, Mexico, and Montenegro, among others. Within the EU, the Brussels I bis Regulation (Regulation 1215/2012) governs intra-EU choice-of-court agreements.

Typical drafting considerations include:

• Exclusivity language ("shall" vs. "may")
• Neutrality of the forum relative to both parties
• Enforceability of any resulting judgment in jurisdictions where assets sit
• Interaction with arbitration clauses (which select a private tribunal instead)

For sovereign or state-entity contracts, forum clauses interact with sovereign immunity waivers and may be paired with waivers under instruments such as the U.S. Foreign Sovereign Immunities Act.