The B.C. Court of Appeal recently held in Yegre EB Ltd. v. Seguin that a forum selection clause using the words "submit" or "attorn" does not, on its own, grant exclusive jurisdiction to a court. Rather, the parties must add clear and express language granting exclusive jurisdiction. This decision provides important guidance on drafting forum selection clauses in a wide range of agreements. Below, we summarize the decision and highlight key takeaways.
Background
In 2015, the parties entered into a property purchase agreement for the appellant to purchase five industrial properties from the respondents. The purchase agreement contained a forum selection clause stating that the parties would "submit" to the jurisdiction of the Alberta courts "for all purposes arising in connection with this Agreement".
The appellant filed a lawsuit in the B.C. Supreme Court claiming damages against the respondents for alleged breach of contract, fraudulent and negligent misrepresentation, and conspiracy in connection with the purchase. The respondents then filed a jurisdictional response arguing that the forum selection clause required the action to proceed in Alberta.
The B.C. Supreme Court agreed with the respondents. It held that the forum selection clause should be interpreted as an exclusive jurisdiction clause requiring the action to proceed in Alberta. In doing so, it found that "submit" and "attorn" have different meanings.
Decision
The Court of Appeal overturned the lower court's decision. It held that the lower court erred in drawing a distinction between the terms "submit" and "attorn", and that the clause in question lacked clear and express language granting exclusive jurisdiction.
The Court of Appeal held that the case law does not draw a distinction between "submit" and "attorn". The two terms are often used interchangeably in the context of forum selection clauses. Further, an agreement to "submit" or "attorn" to a court's jurisdiction, without more, has typically signalled non-exclusivity. To grant exclusive jurisdiction, clear and express language is required.
The Court of Appeal held that the language of the forum selection clause in question did not reflect a clear and express intention to grant exclusive jurisdiction to the Alberta courts. Where reasonable alternative interpretations exist, a forum selection clause cannot be considered exclusive. Here, neither the wording of the clause nor the other provisions in the agreement reflected a clear and express intention to make the clause exclusive.
The Court of Appeal also rejected the respondent's argument that Alberta is a more convenient forum. As a result, the court allowed the appeal.
Key Takeaways
Yegre provides helpful guidance on drafting forum selection clauses. As these clauses are a standard feature of agreements across a variety of industries, parties should take care to ensure these clauses are drafted appropriately to achieve their intended effect. Although the terms "submit" and "attorn" typically share the same meaning in this context, neither term establishes exclusive jurisdiction. Rather, if the parties wish to establish exclusive jurisdiction, the parties must go one step further by drafting clear and express language granting exclusive jurisdiction.
Case Information
Yegre EB Ltd. v. Seguin, 2024 BCCA 365 (CanLII)
Docket: CA49352
Date of Decision: November 4, 2024
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