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Corus International Trading ) Limited v. EreĞLi Demir Vea Elik

February 18, 2011

CORUS INTERNATIONAL TRADING ) LIMITED, PLAINTIFF,
v.
EREĞLI DEMIR VEA ELIK FABRIKALARI, T.A.Ş., DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

Hon. Amy J. St. Eve

MEMORANDUM OPINION AND ORDER

Plaintiff, Corus International Trading Limited ("Corus"), filed the instant lawsuit against Defendant Ereğli Demir ve aelik Fabrikalari, T.A.Ş. ("Erdemir"), seeking $4,800,000 in damages under theories of breach of contract and promissory estoppel. (R. 1.) On September 24, 2010, Erdemir filed a motion to dismiss the complaint. Defendant argues that the Court lacks personal jurisdiction over it and that a forum-selection clause requires the parties to litigate the matter in Turkey. (R. 23.) The Court grants Defendant's motion, with prejudice.*fn1

BACKGROUND

Corus is a Delaware corporation engaged in the business of sourcing and supplying commercial-grade steel to companies throughout the world. (R. 1 at 1.) Its principal office is in Illinois. (Id.) Erdemir is a foreign corporation organized and existing under the laws of Turkey.

(Id.) Its headquarters are in Ankara, Turkey, and it conducts its operations primarily from Zonguldak and Istanbul in the same country. (R. 23-1 at 7.)

On August 8, 2008, Corus sent Erdemir a fax, requesting to purchase the latter's flat-steel products. (R. 23-2 at 3.) This contact led the parties to agree to the production and sale of some 16,000 metric tons of steel plates at a price of roughly $17.6 million. (R. 53-7 at 1.) The parties conducted the relevant negotiations exclusively in Turkey. (R. 23-2 at 3.) On October 2, 2008, Corus issued Purchase Orders Nos. 1580 and 1582 to Erdemir for approximately 10,000 tons.

(R. 53-7 at 1.) On October 20, 2008, Plaintiff issued Purchase Order Nos. 3859, 3860, and 3861 for an additional 6,000 tons. (Id.) Plaintiff observes that those standard purchase orders included a choice-of-law provision, which provides that "[a]ll actions or proceedings arising . . . from this contract shall be brought only in the Circuit Court of Cook County in the State of Illinois or in the U.S. District Court for the Northern District of Illinois, Eastern [D]ivision and seller hereby consents and submits to the jurisdiction of such courts for the purpose of such actions or proceedings." (Id. at 2.) Neither party argues that Erdemir signed or otherwise assented to this choice-of-law term. (R. 53; R. 56.)

On November 12, 2008, Corus wired $12,853,009 to Erdemir, which in turn delivered the first 10,000 tons of steel plates to Plaintiff in Turkey on November 21, 2008. (R. 53 at 10; R. 23-1 at 8.) Erdemir delivered the second shipment of 6,000 tons to Plaintiff in Turkey on December 18, 2008. (Id.)

In December 2008, after sending the previously described purchase orders, Corus signed Sales Contracts Nos. 68142 and 68150 ("the Sales Contracts"). (R. 53 at 10; R. 23-1 at 7.) These contracts specified that the parties executed them in Turkey. (R. 23-2 at 21, 33.) The Sales Contracts contained two important provisions. The first is a merger clause, which provided that "[t]he entire agreement between the parties is expressed herein . . . . All previous agreements, promises, proposals, representations, understandings and negotiations between the parties hereto which relate in any way to the subject matter of this agreement are hereby deemed to be null and void." (Id.) The second, entitled "jurisdiction," states that, "[i]n case of any dispute, controversy, claim or argument in connection with this contract, both parties shall make every possible effort to settle such disputes . . . amicably between themselves. If no such amicable agreement can be reached, then such dispute, controversy, claim or argument shall be finally settled by Kdz. Eregli Courts and Enforcement Offices in Kdz. Eregli/Turkey according to the Turkish law." (Id.)

Plaintiff alleges that its customer rejected the steel products provided by Erdemir "due to various alleged defects." (R. 1 at 2.) According to the Complaint, this problem induced the parties to negotiate the proper compensation of Corus by Erdemir. (Id.) The parties entered into an alleged agreement on April 7, 2009 ("the Settlement Agreement"), pursuant to which Erdemir promised to pay Corus $6,914,000 by selling it further steel at reduced prices. (Id.) Plaintiff alleges, however, that Erdemir continuously delayed paying the remaining balance due to improvements in the steel markets in the summer and fall of 2009. (Id. at 3.) This led the parties to engage in a further meeting on November 13, 2009. (Id.) At that meeting Erdemir allegedly agreed to pay the outstanding balance of $4,800,000 in equal quarterly payments, beginning in March 2010. (Id.) The Complaint alleges that, on April 22, 2010, Erdemir rejected Plaintiff's invoice and declared that there was no agreement between the parties. (Id.)

Plaintiff seeks $4,800,000 in damages under breach-of-contract and promissory-estoppel theories. (R. 1 at 4.) On September 24, 2010, Defendant filed the instant motion to dismiss. (R. 23.) It argues, first, that this Court lacks personal jurisdiction over it and, second, that the Sales Contracts' forum-selection clause requires dismissal. (R. 23-1.)

LEGAL STANDARD

It is well established that the due-process test for personal jurisdiction requires that a defendant have minimum contacts with the forum state "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (citations omitted). "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities ...


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