Credit documents in lending transactions commonly contain a choice of forum provision setting forth the agreement of the parties to submit to the jurisdiction of the New York state courts and federal courts sitting in the County, City and State of New York.
Effective as of July 1, 2017, the Uniform Rules for the Supreme and County Courts in the State of New York (the "Rules") were amended to permit contracting parties to expressly consent to the specific designation of the Commercial Division of the New York Supreme Court (the "Commercial Division") as the exclusive or co-exclusive forum with the federal courts in New York state (subject to the jurisdictional and procedural requirements for assignment of a matter to the Commercial Division, as set forth in the Rules prior to this amendment). The Rules, as amended, provide sample clauses relating to forum selection in order to offer contracting parties model language by which to express their selection of the Commercial Division as a forum for resolution of contractual disputes.
Lenders may wish to expressly designate the Commercial Division as a forum in order to streamline the process of having their contractual disputes heard in the Commercial Division rather than in New York state courts generally; judges assigned to the Commercial Division are generally well-versed in commercial law and so are likely to be more familiar with the relevant issues than are judges hearing matters placed on the general calendars in New York state courts, and cases in the Commercial Division are likely to be handled more expeditiously than in New York state courts generally.
The below sample forum selection provisions were appended to the Rules:
For Exclusive Jurisdiction of the Commercial Division:
THE PARTIES AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COMMERCIAL DIVISION, NEW YORK STATE SUPREME COURT, WHICH SHALL HEAR ANY DISPUTE, CLAIM OR CONTROVERSY ARISING IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO THE VALIDITY, BREACH, ENFORCEMENT OR TERMINATION THEREOF.
For Exclusive Jurisdiction of either the Commercial Division or the Federal Courts in New York State:
THE PARTIES AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COMMERCIAL DIVISION, NEW YORK STATE SUPREME COURT, OR THE FEDERAL COURTS IN NEW YORK STATE, WHICH SHALL HEAR ANY DISPUTE, CLAIM OR CONTROVERSY ARISING IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO THE VALIDITY, BREACH,...