David Benrimon Fine Art LLC v. Durazzo, No. 17-cv-6382 (S.D.N.Y. Oct. 26, 2017) [click for opinion]

Plaintiff, a New York art dealer, entered into an agreement with Defendant Durazzo, a French citizen and the chairman of Defendant Torrelione, to sell Torrelione a piece of artwork for approximately $350,000. Defendants failed to wire the funds by the deadline set forth in their agreement, but they wired the funds a few days later. Plaintiff rejected Defendants' wire transfer as untimely and declared the parties' contract terminated. Torrelione then filed a breach of contract claim against Plaintiff in Paris Commercial Court. One month later, Plaintiff filed a suit in federal district court in New York seeking a declaratory judgment that it did not breach the contract. Plaintiff also moved for an anti-suit injunction barring Defendants from maintaining their action in Paris.

The court acknowledged that it has the power to enjoin a party from pursuing litigation in a foreign jurisdiction, but denied Plaintiff's motion. According to the court, a plaintiff must satisfy two threshold requirements to obtain an anti-suit injunction: (i) the parties must be the same in both proceedings; and (ii) resolution of the case before the enjoining court would be dispositive of the action to be enjoined. If the threshold factors are satisfied, then courts weigh the five additional China Trade factors: (i) the threat to the enjoining court's jurisdiction posed by the foreign action; (ii) the potential frustration of strong public policies in the enjoining forum; (iii) the vexatiousness of the foreign litigation; (iv) the possibility of delay, inconvenience, expense, inconsistency, or a race to judgment; and (v) other equitable considerations.

The court ruled that Plaintiff satisfied the two threshold requirements but that the China Trade factors weighed against its motion for multiple reasons. First, the French lawsuit did not pose a threat to the court's jurisdiction because the French court was not attempting to "carve out exclusive jurisdiction over the action." Second, although the French court asserted jurisdiction over Plaintiff based on a legal doctrine that is not available in the United States, there was no evidence that Torrelione filed its suit in Paris in an attempt to evade the US Constitution's notions of due process; furthermore Plaintiff had contacts in Paris through its transaction with Defendants. In addition, public policy of a court in New York interpreting New York law was inapplicable because the parties never agreed that New York law would govern any disputes between them. And, finally, Defendants' suit was not "vexatious" because Defendants filed suit in Paris before Plaintiff filed its suit and their agreement did not contain a forum selection clause.

For all these reasons, the court denied Plaintiff's motion for an anti-suit injunction.

Michael Bloom of the Chicago office contributed to this summary.