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August 3, 1999


The opinion of the court was delivered by: Castillo, District Judge.


This lawsuit is a prime example of our present international economy and how courts must continually strive to honor the laws and interests of each respective country in international disputes. Hull 753 Corporation ("Hull"), an Illinois entity, filed a lawsuit against Elbe Flugzeugwerke ("Elbe"), a German company, and Sogerma-Socea ("Sogerma"), a French company, alleging four claims for breach of contract and two claims under the Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 ILCS 505/1 et seq. Elbe and Sogerma now seek dismissal arguing that (1) the contract governing this case mandates venue in Dresden, Germany; (2) Germany would provide a more convenient forum to litigate this case; and (3) Hull's complaint fails to state a claim for relief under any of its theories of recovery. After a thorough review of the record, we conclude that, although the contract does not require the parties to litigate in Germany, Germany would provide a more convenient and efficient forum in which to resolve the issues presented by this lawsuit. Therefore, we grant Elbe and Sogerma's separate motions to dismiss this case for forum non conveniens. (R. 61 (Elbe's Mot.); R. 8-1 (Sogerma's Mot.).)


  This Agreement shall be governed by and construed in
  accordance with the laws of the Federal Republic of
  Germany. The Uniform Law on the Formation of
  Contracts for the Sale of Goods, based upon the
  United Nations Convention on Contracts for the
  International Sale of Goods, shall not be applicable.
  Place of jurisdiction shall be Dresden.

(Agreement, at § 22.10.) Hull filed this lawsuit against Elbe and Sogerma claiming various material breaches of the Agreement and violations of the Illinois Consumer Fraud Act.


Elbe and Sogerma seek enforcement of § 22.10, which they believe is a forum selection clause. Alternatively, they ask us to dismiss this case under the doctrine of forum non conveniens.*fn1 We analyze each argument in turn.

A. Section 22.10

It has long been established that "[p]ersonal jurisdiction and venue are discrete concepts that should be kept separate." Andrews v. Heinold Commodities, Inc., 771 F.2d 184, 187 (7th Cir. 1985). Thus, when parties to a contract locate jurisdiction in a certain court, it does not necessarily follow that they have agreed to venue only in that court: "where venue is specified with mandatory or obligatory language, the clause will be enforced; where only jurisdiction is specified, the clause will generally not be enforced unless there is some further language indicating the parties' intent to make venue exclusive." Paper Express, Ltd. v. Pfankuch Maschinen, 972 F.2d 753, 757 (7th Cir. 1992); see also Frietsch v. Refco, Inc., 56 F.3d 825, 829-30 (7th Cir. 1995) (applying the mandatory versus permissive forum selection clause distinction and relying, in part, on additional language to find the contractual provision mandatory). Here, the contract specifies jurisdiction only, and there is no other language indicating the parties' intent to make venue exclusive. Under Seventh Circuit precedent, § 22.10 is a permissive forum selection clause that allows, but does not require, the parties to litigate in Dresden.

Elbe and Sogerma argue vociferously and cogently against this result. But before turning to their contentions, we address an issue that they could have, but did not, raise: namely, that § 22.10 divests this Court of personal jurisdiction over the parties by mandating jurisdiction in Dresden. See Andrews, 771 F.2d at 188 ("Personal jurisdiction, unlike subject matter jurisdiction, may be waived by the parties."). A court lacking personal jurisdiction is an improper venue to litigate. Id. ("[T]he lack of personal jurisdiction also nullifies . . . venue."). But Federal Rule of Civil Procedure 12(h)(1) dictates that a challenge to a court's personal jurisdiction must be raised at the earliest possible opportunity, either by motion or in a responsive pleading; if it is not, the issue is waived. Because Elbe and Sogerma have not pressed this interpretation of § 22.10, any challenge to this Court's personal jurisdiction over the parties is waived. We turn now to the defendants' contentions.

First, relying on basic principles of contract interpretation, Elbe and Sogerma reason that use of the phrase "shall be" in § 22.10 evinces the mandatory nature of the clause. In support of this assertion, they analogize "[j]urisdiction shall be in Dresden" to "place of jurisdiction . . . is the registered office of the trustee, to the extent permissible under the law," which the Frietsch Court determined was a mandatory forum selection clause. 56 F.3d at 827 (omission in Frietsch).

Although we agree that, as an intuitive matter, the phrase at issue here appears even stronger than that in Frietsch, we feel constrained by Paper Express's very clear statement distinguishing jurisdiction and venue, as well as the obvious distinctions between this case and Frietsch. Most importantly, the contract at issue in Frietsch contained language in addition to the statement of jurisdiction that, as required under Paper Express, demonstrated the parties' intent to litigate only in the place of jurisdiction. Id. at 829 ("The phrase `to the extent permissible' would have no function if the clause were not mandatory."). Here, on the other hand, the contract does not have additional language evincing such intent.

Moreover, not only was the Frietsch contract governed by German law, but all of the parties were German, the contract was formed in Germany, and it was written in German. The Seventh Circuit relied on these facts to conclude that the "the natural forum" would be Germany, and that the plaintiffs could not reasonably have expected to litigate issues arising from the wholly German contract in Illinois. Id. at 929-30. Here, the contract was written in English, it was formed in Illinois, and the parties are from three different countries. In contrast to those in Frietsch, the facts of this case do not ...

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