Fighting Forum: Where Forum Selection Clauses Fall Short

Forum selection clauses are frequently used in commercial contracts, especially in cases where the parties to the contracts are based in different jurisdictions. These clauses allow the parties to choose which jurisdiction their disputes will be resolved in. However, a recent decision of the Saskatchewan Court of Queen's Bench cautions about the use of forum selection clauses and their enforceability. This decision emphasizes the importance of ensuring that a forum selection clause is drafted clearly and properly serves the intention of the party wishing to include the clause.

In Yara Belle Plaine Inc v Ingersoll-Rand Company, 2014 SKQB 254, the plaintiff company, Yara Belle Plaine Inc ("Yara") owned and operated a nitrogen fertilizer plant, in Belle Plaine, Saskatchewan. Beginning in 2004, Yara entered into a series of contracts with the defendant, Ingersoll-Rand Company ("Ingersoll"), based out of the United States, for the disassembly, repair and reassembly of two rotors (Rotor 'A' and 'B') used in a nitric acid expander.

The contracts were all primarily drafted by Ingersoll. The 2004 contract did not include a forum selection clause. The rotors operated without incident from 2004 to 2009. In 2009, the parties entered into two further agreements, both of which incorporated a forum selection clause. In...