Summary:
BAE Systems and the Republic of Korea entered into a dispute regarding Korea's upgrade of fighter jets. After having been sued in the Korean courts, BAE filed suit in the federal court in Maryland for a declaratory judgment that it did not violate any obligation, and for an anti-suit injunction against Korea. The district court issued a declaratory judgment, but did not issue an anti-suit injunction. Parties cross-appealed.
The Fourth Circuit Court of Appeals initially held that the forum selection clause, which designated Seoul Central District Court as the forum, was a permissive one that did not exclude other potential forum. In case of a permissive forum selection clause, the standard forum non conveniens analysis applies, but Korea made no attempt to argue the Seoul court was a more convenient forum. The court also denied Korea's sovereign immunity defense, because Korea did not raise sovereign immunity as a defense in its initial motion to dismiss and therefore waived it. Then the court affirmed the district court judgment, finding that holding BAE liable would undermine the U.S. defense contracting schema, despite the amicus brief by the U.S. government to the contrary.
Takeaway:
The more I follow this case, the more jaw-dropping this gets. First there is the staggeringly bad lawyering on the part of Korea's counsel. Why let the foreign sovereign immunity defense go to waste, when it should be the first line of defense if your client is a foreign government? Why no attempt to argue in the alternative and make a forum non conveniens argument, when U.S. courts are been exceedingly willing to get cases out of their docket?
Then there is the merits. Unlike the lower court, now we have the U.S. government's amicus curie brief stating there would be no subversion of the national defense procurement system even if Korea prevailed--which the court simply ignored to rule otherwise. This is a very strange case.
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