BONGARDS'CREAMERIES v. Alfa-Laval, Inc., CX-82-1564.

• Decision Date: 04 November 1983
• Docket Number: No. CX-82-1564.,CX-82-1564.
• Citation: 339 NW 2d 561
• Parties: BONGARDS' CREAMERIES, Plaintiff, v. ALFA-LAVAL, INC., f.k.a. The DeLaval Separator Company, defendant and third-party plaintiff, Respondent, v. Gebrs H.J. SCHEFFERS N.V., third-party defendant, Appellant.
• Court: Minnesota Supreme Court

339 N.W.2d 561 (1983)

BONGARDS' CREAMERIES, Plaintiff, v. ALFA-LAVAL, INC., f.k.a. The DeLaval Separator Company, defendant and third-party plaintiff, Respondent, v. Gebrs H.J. SCHEFFERS N.V., third-party defendant, Appellant.

No. CX-82-1564.

Supreme Court of Minnesota.

November 4, 1983.

Brian E. Palmer, Daniel P. O'Keefe, Minneapolis, for appellant.

Steven R. Anderson and Kari L. Anderson, Minneapolis, for respondent.

Heard, considered, and decided by the court en banc.

YETKA, Justice.

This is an appeal by Gebrs H.J. Scheffers, N.V. from an order of the Carver County District Court denying Scheffers' motion to dismiss respondent Alfa-Laval's third-party action against it.

Bongards' Creameries, a Minnesota corporation, commenced this lawsuit against Alfa-Laval, Inc., a New Jersey corporation, to recover damages sustained as the result of the purchase of allegedly defective equipment. Alfa-Laval subsequently served a third-party complaint for indemnity against Scheffers, a Dutch corporation. Scheffers moved to dismiss the third-party action for lack of personal jurisdiction and because the dispute was subject to an arbitration agreement. Apparently this was also a motion to compel arbitration. The district court denied the motion in all respects. Scheffers then appealed this denial of its motion. After the appeal was filed, Bongards and Alfa-Laval settled their claims.

The issue in this case is whether a Minnesota court should continue to exercise jurisdiction over this action or whether the court below should dismiss on the ground that there is a more convenient forum in which to litigate. The district court did not reach this issue, and the parties did not raise it below or on appeal. However, since there is now no longer a Minnesota party involved in any aspect of this litigation, we believe that dismissal on forum non conveniens grounds is appropriate.

In 1971, Scheffers, a Dutch manufacturer of dairy processing equipment, granted Alfa-Laval an exclusive license to sell Scheffers' products throughout the United States. The agreement provides for arbitration as follows:

Any disputes arising from a contract to which the present Conditions of Delivery apply in full or in part, or arising from further agreements proceeding from such contract, shall be settled to the exclusion of the ordinary courts, by a Board of Arbitration. This Board of Arbitration shall be appointed in accordance with the Regulations of the "Stichting Raad van Arbitrage voor Metallnijverheid on-Handel" at The Hague, and shall make its award with due observance of the Regulations of the said Council.

The article containing the arbitration clause also provides that New York law will govern the interpretation and execution of the agreement. At oral argument, the parties stated that arbitration would proceed in New York in accordance with the Hague regulations.

In 1973, Alfa-Laval negotiated the sale of a Scheffers' "falling film evaporator" to Bongards for use in Bongards' Minnesota cheese processing operation. Even though Alfa-Laval made the actual sale to Bongards, Scheffers' employees participated in sales efforts in Minnesota, designed and manufactured the evaporator for Bongards, and installed the evaporator at Bongards' plant.

Even though forum non conveniens was not raised below, dismissal on that ground is appropriate. Under the doctrine of forum non conveniens, a court "may decline jurisdiction over transitory causes of action brought by non-resident citizens or non-citizens of this state when it fairly appears that it would be more equitable...