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Forum Selection Clause Applies To Merged TV Company

By Stan Soocher

The U.S. District Court for the Southern District of New York decided that a forum selection clause in a television broadcast agreement applied to a company within which the original signatory broadcaster later was merged. Metro-Goldwyn-Mayer Studios Inc. v. Canal Distribution S.A.S., 07 Civ. 2918(DAB).

In 1996, MGM entered into an agreement to provide pay-TV rights in movies and TV programs to TPS Societe en Nom Collectif (TPS), a French satellite network. In case of disputes, the agreement's forum selection clause cited New York. The contract's initial five-year term was subsequently extended for an additional five years to Dec. 31, 2006. The extension agreement gave MGM the right to extend the license for yet another five years, if TPS merged with another company. TPS did merge with CanalSatellite S.A. (CANALSAT), its only competitor, into Canal Distribution. The TPS and CanalSatellite owners announced the merger would be completed in November 2006, though it was approved in January 2007. In September 2006, MGM initially notified TPS and then later Canal Distribution that MGM would exercise its license extension option. But the French parties refused to perform, and MGM sued the Canal Distribution owners in New York federal court for breach of contract and tortious interference with contract.

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