## Facts

- A Swiss corporation contracted with a French shipping company under a written charter party to transport vinyl chloride monomer (VCM) from the United States to Europe.
- The Swiss corporation alleged the French company breached the charter party and then breached an extended arrangement after the Swiss corporation exercised an asserted “irrevocable option” to extend on the same terms.
- In a related action, the Swiss corporation alleged the French company and affiliated entities violated federal antitrust laws by monopolizing VCM transportation and conspiring to fix transportation charges.
- The French company moved pre-answer to dismiss both actions under Rule 12(b), arguing a 1869 France–Switzerland convention required the Swiss plaintiff to sue only in France and therefore lacked capacity to sue in U.S. courts.
- The French company also sought, as to the charter party action, a stay pending arbitration based on an arbitration clause.

## Issues

1. Whether a bilateral France–Switzerland convention on jurisdiction and enforcement of judgments deprived a Swiss plaintiff of capacity to sue a French defendant in a U.S. federal court, requiring dismissal for lack of subject-matter jurisdiction.
2. Whether the charter party action should be stayed pending arbitration based on the contract’s arbitration clause.

## Decision

- The court denied the motion to dismiss in both actions.
- The court held the France–Switzerland convention regulated jurisdiction as between French and Swiss courts and did not exclude courts of non-party nations from hearing disputes between French and Swiss nationals.
- The court rejected characterizing the treaty argument as a “capacity to sue” defect in U.S. federal court.
- The court denied the alternative motion to stay the charter party action pending arbitration on the record presented.

## Legal Principles

- A bilateral treaty allocating jurisdiction between the courts of the contracting states will not be read to bar litigation in third-country courts absent clear language showing that intent.
- A party’s capacity to sue in federal court is not negated by a foreign jurisdiction-allocation treaty unless the treaty clearly applies to and restricts proceedings in U.S. courts.
- Clauses or instruments claimed to displace a court’s ability to proceed (including asserted jurisdictional limits or arbitration provisions) are construed narrowly; displacement requires a clear and sufficient showing.

## Conclusion

The court allowed both the contract and antitrust actions to proceed in federal court, ruling that the France–Switzerland jurisdiction convention did not restrict litigation in the United States and that a stay for arbitration was not warranted on the motion presented.


Joseph Muller Corp. Zurich v. Societe Anonyme de Gerance et d’Armement, 314 F. Supp. 439 (S.D.N.Y. 1970)