Credit Francais International v. Sociedad Financiera de Comercio

Credit Francais International, S.A. (CFI) (plaintiff) was a French bank with headquarters in France. CFI participated in an international consortium of banks, none based in New York, that, in 1980, collectively lent $25 million to Sociedad Financiera de Comercio, C.A. (Sociedad) (defendant), a Venezuelan financial institution. CFI contributed $3 million to the loan. The loan agreement and related documents were either negotiated or drafted in New York, loan-related meetings took place in New York, and Sociedad was to repay the loan to the New York-based Marine Midland Bank (Marine), which was to serve as the loan agent. The loan agreement stated that it was to be governed by New York law and designated New York courts as a permissible forum to resolve any disputes under the agreement. Moreover, per the agreement, Sociedad waived any objection to venue in New York and waived any right to require that litigation be conducted in Venezuela. Finally, Sociedad appointed a New York agent to accept service of process and agreed to submit to personal jurisdiction in New York. Sociedad made its first two loan payments. However, in early 1983, the Venezuelan government prohibited Venezuelan financial institutions from repaying any loan principals until 1986. Thereafter, Sociedad continued to make interest payments for the loan but stopped repaying any principal. CFI sued Sociedad in New York state court, alleging, among other things, that Sociedad breached the loan agreement and seeking repayment of the past-due principal. CFI moved for partial summary judgment on that claim. Sociedad responded by cross-moving for summary judgment on forum non conveniens grounds, arguing that the lack of a New York-based party and the asserted need to interpret and apply Venezuelan law made New York an inconvenient forum.