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A federal court in Illinois dismissed a party's claim for improper venue because the parties' contract contained an arbitration clause.
In CPL, Inc. v. Fragchem, Corp., No. 06 C 1352, 2007 WL 869483 (N.D. Ill. Mar. 19, 2007), Fragchem and Cadila, wholly owned subsidiary of CPL, entered into an agreement regarding the manufacture and provision of certain chemical compounds.
The parties' agreement contained a clause stating that it was binding on all "parent, subsidiaries, affiliates, successors, and assigns" of the parties. Additionally, the agreement contained a broad arbitration clause.
CPL eventually took over the contract from Cadila. Subsequently, a dispute arose between CPL and Fragchem over payment for a shipment of chemicals, and CPL brought an action for breach of contract.
However, this Court dismissed the complaint for improper venue, noting that "where parties to a contract have agreed to arbitrate disputes arising from [a] contract, dismissal pursuant to [Federal] Rule [of Procedure] 12(b)(3) [lack of proper venue] is appropriate."
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