Delaware Business Litigation Report

District Court Denied Transfer to Other Venue Pursuant to Service of Suit Clause in Marine Insurance Policy

Ace Capital v. Varadam Foundation, 392 F.Supp.2d 671 (D.Del. 2005). The United Stated District Court for the District of Delaware denied Defendants' Motion to transfer venue, finding that a clause in a marine insurance policy which governed service of suit did not mandate choice of venue. Plaintiff insurer filed suit in the District of Delaware. Defendants moved to transfer venue to the Southern district of Florida. In support of its motion, Defendants argued that a service of suit clause in the insurance contract conferred on it the right to remove the case to the venue of its choice. This case was a variation on the traditional interpretation of service of suit clauses, which, under the law of the Third Circuit, confers on insured the right to choose venue. The variation, in this case, was that the suit was brought by the insurer and not the insureds. The court found that the service of suit clause affected choice of venue where a suit was brought by an insured alone, and that competing public interests and the plain meaning of a competing clause in the insurance contract mitigated in favor of allowing the case to proceed in the District of Delaware. Thus, the District Court denied the motion to transfer. Share