Fourth Circuit upholds dismissal under forum-selection clause

In SUCAMPO PHARMACEUTICALS v. ASTELLAS PHARMA, the Fourth Circuit considered the dismissal of an action based on the forum selection clause which called for disputes to be litigated in Japan. The clause appeared in the Basic License Agreement and provided: "any dispute in relation to this agreement or any agreement incidental hereto" be brought in Japan.

Sucampo argued that the dispute was not governed by the clause because the dispute arose under a Safety Agreement, which was not incidental to the Amended Basic License Agreement containing the forum selection clause. The Fourth Circuit rejected this argument under the general principles of contract interpretation. The Safety Agreement explicitly noted that it was executed "under the Basic Agreement," with a term concurrent with the Basic Agreement. The Safety Agreement had no independent validity a part from the continued validity of the Basic Agreement. Moreover, the panel noted that there was no reasonable reading of the word "incidental" in the forum-selection clause that would exclude the Safety Agreement from its coverage. The dismissal was affirmed