Opinion
No. 05-05-01256-CV
Opinion Filed August 8, 2006.
On Appeal from the 160th Judicial District Court, Dallas County, Texas, Trial Court Cause No. 04-02686.
Affirm.
Before Justices WRIGHT, LANG, and LANG-MIERS.
OPINION
This is an accelerated, interlocutory appeal from the denial of a special appearance. The dispute centers on the effect of a forum selection clause in a contract that designates Texas as the venue and exclusive jurisdiction for lawsuits. We are asked to determine whether this clause is valid and enforceable against entities that did not sign the contract but, because of multiple transfers, assignments and acquisitions, have interests in the contract. We conclude the forum-selection clause is valid and enforceable and affirm the order of the trial court denying the special appearance.
Background
To determine whether the forum selection clause is enforceable against these parties we must first analyze their relationships to each other and to the contract.
Area of Mutual Interest Provision
In 1968, Independent Indonesian American Petroleum Company (IIAPCO) and P.N. Pertambangan Minjak Dan Gas Bumi Nasional (Pertamina) entered into a production-sharing agreement to explore and develop potential petroleum resources in the territorial waters off the southeast coast of Sumatra and the north coast of Java. This agreement became known as the Pertamina Contract.
On that same day, IIAPCO assigned part of its interest in the Pertamina Contract to Warrior International Company and Carver-Dodge International Company. The agreement setting out the rights and duties of IIAPCO, Warrior, and Carver-Dodge became known as the 1968 Operating Agreement. Section 12 of the 1968 Operating Agreement, entitled "Area of Mutual Interest" (AMI), provided that if any party to the agreement acquired a petroleum exploration interest in another part of Indonesia, that party would notify the other parties in writing and offer them the option to participate in the interest pursuant to the terms of their agreement. The AMI clause is the subject of the current lawsuit.
The 1986 Settlement Agreement
In 1986, a dispute arose between Warrior and IIAPCO over whether the AMI applied to petroleum interests acquired by an affiliate of a party to the 1968 Operating Agreement. Warrior claimed that Diamond Shamrock, IIAPCO's affiliate, violated the AMI when it acquired oil and gas interests in the Indonesian regions of Aru and Arafuru without giving Warrior the option to participate. Warrior filed a lawsuit against Diamond Shamrock in Dallas County, Texas, and the lawsuit settled in 1986. The 1986 Settlement Agreement provided that "venue and exclusive jurisdiction for claims arising pursuant to this Agreement or other provisions of Section 12 [the AMI] shall lie in Texas." This clause is the subject of the special appearance. It also provided that those provisions apply to Diamond Shamrock, as an affiliate of IIAPCO, as well as its affiliates and Warrior's affiliates. They agreed that the settlement agreement would remain in effect as long as Warrior and Shamrock were parties to the Operating Agreement as defined in section 17 of the Operating Agreement.
Around 1988, three companies affiliated with the Spanish national oil company, YPF, acquired IIAPCO's working interest in the 1968 Operating Agreement. One of these companies, YPF Maxus Southeast Sumatra B.V. (YPF Maxus) acquired the working interest owned by Diamond Shamrock. Several years later, in 1999, Paladin Resources (Sunda) Limited, a corporation organized under the laws of the British Virgin Islands, acquired Warrior's working interest in the 1968 Operating Agreement.
2001 Lawsuit and Settlement
In 2001, Paladin, which had acquired Warrior's working interest, filed a lawsuit against YPF Maxus and YPF Indonesia Ltd., an affiliate of YPF Maxus, which had acquired Diamond Shamrock's working interest, alleging that YPF Indonesia violated the AMI by acquiring a petroleum exploration interest in the Jambi Merang Project in Indonesia without giving Paladin the option to participate.
The defendants filed a special appearance contesting jurisdiction which the trial court overruled.
While the lawsuit was pending, CNOOC Southeast Asia Ltd. (SAL), an affiliate of China National Offshore Oil Corporation, the Chinese state oil company, acquired the shares of several YPF companies, one of which owned the shares of YPF Maxus which had acquired Diamond Shamrock's working interest. While the lawsuit between Paladin and YPF Maxus was pending, SAL changed the name of YPF Maxus to CNOOC Southeast Sumatra B.V. The lawsuit settled, and, at some point, SAL transferred all of the working interests in the 1968 Operating Agreement that had been owned by the YPF companies it acquired to CNOOC SES Ltd. (SES), a subsidiary of SAL.
This Lawsuit
In 2004, Paladin filed this lawsuit in Dallas County, Texas, against SAL, SES, CNOOC Ltd., CNOOC International Limited, and CNOOC Muturi Limited, alleging CNOOC International and CNOOC Muturi acquired exploration rights in the Tangguh Project in Indonesia without giving Paladin the option to participate. The CNOOC entities collectively filed a special appearance, arguing the court lacked personal jurisdiction because they are foreign entities and have no contacts with Texas.
Paladin responded, alleging the CNOOC entities consented to jurisdiction in Texas through the forum-selection clause in the 1986 Settlement Agreement between Warrior and Diamond Shamrock because that agreement was binding on them as successor working interest owners and on their affiliates.
The CNOOC entities argued they did not consent to jurisdiction in Texas because they did not sign the 1986 Settlement Agreement containing the forum-selection clause, and because the 1986 Settlement Agreement expired when Warrior and Diamond Shamrock ceased to be parties to the 1968 Operating Agreement. Alternatively, the CNOOC entities argued the clause is ambiguous because it is subject to more than one interpretation of who is bound by the clause. The CNOOC entities also attached affidavits stating enforcement of the forum-selection clause would be unreasonable and unjust. The trial court denied the special appearance following a hearing.
Standard of Review
When we review a trial court's order denying a special appearance, we review the court's factual findings for legal and factual sufficiency and its legal conclusions de novo. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793-94 (Tex. 2002); AJ Printing, Inc. v. DSP Enters., L.L.C., 153 S.W.3d 676, 680 (Tex.App.-Dallas 2004, no pet.). When a trial court does not issue findings of fact and conclusions of law, we must imply all findings of fact necessary to support the judgment if they are supported by the evidence. BMC Software, 83 S.W.3d at 795.
Here, the trial court did not issue findings of fact and conclusions of law. Consequently, by denying the special appearance, the court impliedly found that the forum-selection clause in the 1986 Settlement Agreement was valid and enforceable. We review the validity and enforceability of a forum-selection clause under an abuse of discretion standard. My Café-CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860, 864 (Tex.App.-Dallas 2003, no pet.); Phoenix Network Techs. v. Neon Sys., 177 S.W.3d 605, 610 (Tex.App.-Houston [1st Dist.] 2005, no pet.). We review the trial court's interpretation of a contract containing a forum-selection clause de novo. Phoenix, 177 S.W.3d at 610.
Applicable Law
Personal jurisdiction concerns the power of the court to bind a particular person or party. CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996) (orig. proceeding). A defendant who claims he is not amenable to process in Texas must file a special appearance to challenge the trial court's exercise of jurisdiction. See TEX. R. CIV. P. 120a. Personal jurisdiction is a waivable right. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n. 14 (1985); Tri-State Bldg Specialties, Inc. v. NCI Bldg. Sys., L.P., 184 S.W.3d 242, 248 (Tex.App.-Houston [1st Dist.] 2005, no pet.). One of the ways a party may waive personal jurisdiction and thereby consent to personal jurisdiction in a particular forum is by signing a contract containing a forum-selection clause. Tri-State, 184 S.W.3d at 248. A forum-selection clause obtained through freely negotiated agreements does not offend due process provided it is not unreasonable and unjust. Burger King, 471 U.S. at 472 n. 14; Tri-State, 184 S.W.3d at 248.
In Texas, forum-selection clauses are prima facie valid. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 793 (Tex. 2005). The enforcement of a forum-selection clause is mandatory unless the party opposing enforcement shows it would be unreasonable and unjust to enforce the clause or that the clause was invalid for reasons such as fraud or overreaching. Id. (citing In re Automated Collection Techs., Inc., 156 S.W.3d 557, 559 (Tex. 2004)); see also In re AIU Ins. Co., 148 S.W.3d 109, 112 (Tex. 2004) (orig. proceeding). The party opposing enforcement of a forum-selection clause carries a "heavy burden" of showing the clause should not be enforced. Michiana Easy Livin' Country, Inc., 168 S.W.3d at 793; Tri-State, 184 S.W.3d at 248. A party carries this burden by showing (1) the clause was the product of fraud or overreaching, (2) the agreed forum is so inconvenient that it deprives the litigant of his day in court, or (3) enforcement would contravene a strong public policy of the forum in which the suit is brought. Tri-State, 184 S.W.3d at 249 (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972) and Abacan Technical Servs. Ltd. v. Global Marine Int'l Servs. Corp., 994 S.W.2d 839, 844 (Tex.App.-Houston [1st Dist.] 1999, no pet.)).
We construe a contract containing a forum-selection clause as we do any contract, according to its plain language. See Phoenix, 177 S.W.3d at 615. If a contract is worded so that it can be given a certain or definite legal meaning or interpretation, we will construe the contract as a matter of law. Enter. Leasing Co. v. Barrios, 156 S.W.3d 547, 549 (Tex. 2004); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). We presume the parties intended every contractual provision to have meaning. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 180 (Tex. 1997). We examine the entire contract in an attempt to harmonize its provisions, and we give effect to all of its provisions so that none will be rendered meaningless. Frost Nat'l Bank v. LF Dist., Ltd., 165 S.W.3d 310, 311-12 (Tex. 2005); Coker, 650 S.W.2d at 393.
Whether a contract is ambiguous is a question of law for the court. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). A contract is not ambiguous if it can be given a definite or certain legal meaning. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). However, a contract is ambiguous when its meaning is uncertain and doubtful or when it is reasonably susceptible to more than one meaning. Coker, 650 S.W.2d at 393. When the provisions of a contract appear to conflict, we will attempt to harmonize the two provisions and assume the parties intended every provision to have some effect. See Edlund v. Bounds, 842 S.W.2d 719, 726 (Tex.App.-Dallas 1992, writ denied) (when provisions of contract appear to conflict, they should be harmonized if possible to reflect intentions of parties, so entire agreement can be given effect). If we are unable to harmonize the provisions and give effect to all clauses, and the contract is susceptible to more than one reasonable interpretation, we will find the contract is ambiguous. Royal Maccabees Life Ins. Co. v. James, 146 S.W.3d 340, 347 (Tex.App.-Dallas 2004, pet. denied).
When a contract contains an ambiguity, the interpretation of the instrument becomes a fact issue. Coker, 650 S.W.2d at 394; Harris v. Rowe, 593 S.W.2d 303, 306 (Tex. 1980). A court may conclude that a contract is ambiguous even in the absence of such a pleading by either party. Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993); see Coker, 650 S.W.2d at 392-94 (although both parties asserted property settlement agreement was unambiguous and moved for summary judgment, supreme court concluded ambiguity existed).
Analysis
The issues we must resolve are whether the 1986 Settlement Agreement between Warrior and Diamond Shamrock expired and, if not, whether its forum-selection clause binds the CNOOC entities.
A. Has the Settlement Agreement Expired?
The 1986 Settlement Agreement provides that it "shall remain in full force and effect so long as Diamond Shamrock [and Warrior are parties] to the Operating Agreement, as defined in Section 17 of the Operating Agreement." The CNOOC entities argue this is a self-imposed limit on the life of the 1986 Settlement Agreement and that it expired by its own terms when Diamond Shamrock and Warrior each ceased to be a "party."
But the plain language in section 17 of the 1968 Operating Agreement includes as a "party" "each successor to any or all of the working interest of a Party in the Pertamina Contract." Paladin argues it is a successor to Warrior and SES is a successor to Diamond Shamrock. Accordingly, Paladin argues, Paladin and SES are each a "party" as defined in the 1968 Operating Agreement, keeping the 1986 Settlement Agreement and the forum selection clause alive.
Section 17 of the 1968 Operating Agreement defined "Party" as:
[E]ach original signatory to this Agreement so long as it has a working interest in the Pertamina Contract and each successor to any or all of the working interest of a Party in the Pertamina Contract. All of the terms of this Agreement shall inure to the benefit of and be binding upon the lawful successors and assigns of the Parties.
Appellants ask us to rely on Farm Home Savings Association v. Strauss, 671 S.W.2d 682 (Tex.App.-Dallas 1984, no writ) (op. on reh'g) for the meaning on the word "successor." In that case a provision in the parties' contract stated, "This Contract shall be binding upon and inure to the benefit of Seller and Purchaser, and their respective heirs, personal representatives, successors and permitted assigns." Id. at 684. Strauss filed a suit for declaratory judgment to determine whether this provision bound purchasers of property from Farm Home. Strauss claimed a purchaser of Farm Home's property would be a "successor" within the meaning of the contractual provision. We disagreed. We concluded that when used to refer to corporations or stock savings associations such as Farm Home, the term "successor" "is a term of art which does not encompass third party purchasers of a parcel of land from a corporation." Id. at 685. We based our conclusion on the meaning of "successor" as found in International Association of Machinists v. Falstaff Brewing Corp., 328 S.W.2d 778, 781 (Tex.Civ.App.-Houston [1st Dist.] 1959, no writ), where the court reasoned:
Appellee was not legally "a successor." The term "successor" in common parlance has many meanings. Broadly speaking, when the term successor is used in common parlance it means anyone who follows. However, when used as a legal term applying to corporations, it has a more restricted meaning. As applied to corporations "successor" does not ordinarily connote an assignee, but is normally used in respect to corporate entities, including corporations becoming invested with the rights and assuming the burdens of another corporation by amalgamation, consolidation, or duly authorized legal succession, and does not contemplate acquisition by ordinary purchase from another corporation . . .
Id. at 685.
The CNOOC entities contend Paladin is not a "successor" within this meaning and, as a result, Warrior ceased to be a party to the 1968 Operating Agreement when its interest was acquired by Paladin and the 1986 agreement expired at that time. CNOOC contends that the parties did not intend for the agreement to continue in perpetuity and intended for it to expire when either of them was no longer a party.
Paladin argues the CNOOC entities did not preserve this issue for review because they did not raise it in their written pleadings. However, the CNOOC entities argued this point to the trial court during the hearing on the special appearance. The trial court's order stated it considered the arguments of counsel. As a result, we conclude the issue was preserved. See Tex.R.App.P. 33.1(a); see also Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830, 836 n. 11 (Tex.App.-Houston [1st] Dist. 2002, no pet.).
But by expressly incorporating paragraph 17, they demonstrated their intent that the agreement would continue to bind parties succeeding to their working interests. Significantly, the language in paragraph 17 that was incorporated into the 1986 Settlement Agreement refers to "each successor to any or all of the working interests of a Party in this [1968] Pertamina Contract," not to a successor to a party, as was the case with language in Farm Home. As a result, the parties agreed that the 1986 Settlement Agreement would remain in full force and effect so long as Warrior, Diamond Shamrock, or an original signatory to the Operating Agreement has a working interest in the contract, or so long as a successor to any or all of the working interests of a party to the 1968 Operating Agreement has a working interest. Even if Paladin is not a successor to Warrior in the sense decided in Farm Home, it is a successor to the working interests of Warrior under the Pertamina Contract. Since Paladin is a successor to any or all of Warrior's working interests and CNOOC SES is a successor to any or all of Diamond Shamrock's working interests, we conclude the evidence supports the trial court's implied finding that the 1986 Settlement Agreement has not expired. As a result, we conclude that the forum selection clause is enforceable against SES. See Phoenix Network Techs. (Eur.) Ltd., 177 S.W.3d at 620.
In its pleadings, Paladin stated it acquired Warrior's stock in October 1999, changed its name to Paladin, and "succeeded to all of Warrior's contractual rights and obligations." The CNOOC entities claim it was Paladin's burden to prove it was a successor at the special appearance hearing and that it did not do so. We do not reach this issue because we conclude the definition in Farm Home does not apply to the issue of whether the 1986 Settlement Agreement has expired.
B. Does the Forum Selection Clause Apply to Affiliates of SES?
The CNOOC entities argue that even if the 1986 Settlement Agreement has not expired, it cannot be interpreted to bind SES's affiliates. They argue the 1986 Settlement Agreement bound only affiliates of Diamond Shamrock and Warrior that were affiliates at the time the agreement was signed. Alternatively, they argue that "affiliates" is ambiguous because it is subject to two interpretations.
But we do not decide the ultimate question of whether the 1986 Settlement Agreement binds SES's affiliates. Rather, the question we decide is whether the CNOOC entities are subject to jurisdiction in Texas because of the forum selection clause in the 1986 Settlement Agreement.
The forum selection clause provides:
10. It is understood and agreed that this Agreement shall be governed by, construed and enforced in accordance with, and subject to, the laws of the State of Texas and that venue and exclusive jurisdiction for claims arising pursuant to this Agreement or other provisions of Section 12 shall lie in Texas.
By its plain terms, the forum selection clause requires that claims arising under the 1986 Settlement Agreement shall be filed in Texas and that Texas has exclusive jurisdiction. We conclude the forum selection clause is not ambiguous and we interpret it using its plain language. See Phoenix Network Techs. (Eur.) Ltd., 177 S.W.3d at 615. We previously concluded that the 1986 Settlement Agreement has not expired because, as defined in the agreement, Paladin and CNOOC SES are successors to the working interests of Warrior and Diamond Shamrock, respectively, in the Pertamina Contract. We now turn to whether the forum selection clause is enforceable against SES's affiliates. The 1986 Settlement Agreement stated it was entered into by
WARRIOR OIL COMPANY . . . and DIAMOND SHAMROCK CORPORATION, its affiliates, successors, heirs, representatives and assigns, including, but not limited to Diamond Shamrock International Energy Company, Diamond Shamrock International Petroleum Company, Natomas Company, Natomas Energy Company, Diamond Shamrock Aru Petroleum Limited, Diamond Shamrock Coal Company, Falcon Seaboard, Inc., Diamond Shamrock Netherlands Petroleum, B.V., IIAPCO, Inc., their respective heirs, representatives, assigns, successors and affiliates (hereinafter referred to collectively as "DIAMOND SHAMROCK").
Diamond Shamrock and Warrior agreed the AMI applied to the affiliates of Warrior and IIAPCO, including Diamond Shamrock:
1. Diamond Shamrock and Warrior agree that the provisions of Section 12 of the Operating Agreement shall apply, bind, obligate and inure to the benefit of the affiliates of IIAPCO, including, but not limited to Diamond Shamrock, as well as to the affiliates of Warrior.
The agreement defined "affiliates" as:
[I]n addition to Diamond Shamrock itself, (a) any corporation, company, partnership or other entity of any kind which is the direct or indirect subsidiary of either Warrior or Diamond Shamrock; (b) any corporation, company, partnership or other entity of any kind of which either Warrior or Diamond Shamrock is a direct subsidiary; (c) any corporation, company, partnership or other entity of any kind which is a direct or indirect subsidiary of a corporation or company of which Warrior or Diamond Shamrock is a direct or indirect subsidiary; and (d) any corporation, company, partnership or other business entity of any kind which is owned or controlled directly or indirectly by Warrior or Diamond Shamrock.
The CNOOC entities argue these provisions are ambiguous because they are subject to two interpretations. They argue the quoted language could be interpreted to bind (1) Diamond Shamrock and its affiliates, successors, heirs, representatives, and assigns or (2) only Diamond Shamrock's affiliates on the date of the Settlement Agreement and any future affiliate acting on Diamond Shamrock's behalf. On the other hand, Paladin argues that "shall apply, bind, obligate and inure to the benefit of the affiliates of . . . Diamond Shamrock" clearly means that the AMI binds affiliates of Diamond Shamrock's successors.
The trial court could have concluded that the contract was ambiguous because the term "affiliates" is subject to more than one reasonable interpretation. And when a contract is ambiguous, the trial court may consider extrinsic evidence to guide its interpretation of the parties' intent.
The evidence showed that SAL agreed to be bound by the 1986 Settlement Agreement when SAL purchased the shares of the YPF companies that indirectly held the IIAPCO/Diamond Shamrock working interests. In the share purchase agreement between SAL and YPF, the parties included the 1986 Settlement Agreement between Warrior and Diamond Shamrock as one of their "Operating Documents." The agreement defined "Operating Documents" as "those agreements under which the joint operation of the Assets is agreed with other companies holding a working interest in the Asset Documents." The share purchase agreement also stated that the "Operating Documents" "are currently in force as far as [YPF is] aware." We conclude this evidence supports the trial court's implied finding of fact that SAL expressly agreed to be bound by the 1986 Settlement Agreement when it acquired the YPF companies. The evidence also showed that each of the CNOOC entities was a direct or indirect affiliate of SES, with SAL being SES's parent corporation.
The trial court also heard evidence and argument of the litigation history surrounding the AMI clause and the 1986 Settlement Agreement that supports his implied finding of fact that SES's affiliates are subject to the forum selection clause. When Warrior sued IIAPCO, it alleged that IIAPCO's affiliate, Diamond Shamrock, violated the AMI when it did not give Warrior the option to participate in the oil and gas interests in the Indonesian regions of Aru and Arafuru. That lawsuit settled, resulting in the 1986 Settlement Agreement at dispute in this case. And when Paladin sued YPF Maxus, it alleged that YPF Maxus's affiliate, YPF Indonesia, violated the AMI and the 1986 Settlement Agreement when it did not give Paladin the option to participate in the petroleum exploration interest in the Jambi Merang Project in Indonesia. Paladin argued that the basis for the 1986 Settlement Agreement was to make clear that the AMI applied to affiliates of owners of working interests in the 1968 Operating Agreement.
Because the 1986 Settlement Agreement is ambiguous as to whether it applies to affiliates of the successors to the working interests of Diamond Shamrock and Warrior, we conclude the extrinsic evidence supports the trial court's implied finding of fact that the forum selection clause is enforceable against SES's affiliates.
C. Would Enforcement of Forum Selection Clause be Unreasonable and Unjust?
The enforcement of a valid forum selection clause is mandatory unless the party opposing enforcement shows it would be unreasonable and unjust to enforce the clause or that the clause was invalid for reasons such as fraud or overreaching. Michiana Easy Livin' Country, Inc., 168 S.W.3d at 793. We now turn to whether the CNOOC entities proved that, even if the forum selection clause is valid and enforceable, the court nevertheless should decline to enforce it because it is unreasonable and unjust.
CNOOC does not argue that the forum selection clause is invalid because of fraud or overreaching.
The CNOOC entities argue that requiring five foreign defendants to defend against a foreign plaintiff's claims in the Texas courts would be burdensome. They also argue that Texas has no interest in providing a forum for the resolution of their dispute because the claims are based on conduct that occurred in Indonesia, none of the witnesses or evidence is in Texas, no resident of Texas is involved in the lawsuit, and no resident of Texas has been harmed.
At the hearing, the CNOOC entities offered the testimony of Fang Zhi, President of SES and CNOOC Southeast Asia, who stated in his affidavit that enforcement of the forum selection clause would be unreasonable because (1) after the Texas litigation is concluded, they would have to relitigate their dispute in Indonesian courts, depriving the parties of an expeditious resolution to this dispute; (2) the Indonesian government fact witnesses live in Indonesia; (3) their expert in Indonesian law lives in Indonesia; (4) the current visa process may not allow these witnesses multi-entry access to the United States; (5) most of the witnesses do not speak English; (5) no relevant documents are located in Texas; (6) no employees or potential witnesses reside in Texas; (7) exercise of jurisdiction in this case could potentially subject them to jurisdiction in Texas on "a myriad of other actions brought by other plaintiffs" that have nothing to do with Texas; (8) the Republic of Indonesia vigorously exercises and enforces its rights in any private party disputes involving its strategic minerals; and (9) enforcing the forum selection clause could negatively impact the United States government's foreign relations policies with China and Indonesia. Zhang Gouhua, Senior Vice President of CNOOC Ltd. and Director of CNOOC International; and Chen Xiang, Director of CNOOC Muturi Ltd., both testified by affidavit that they agreed with Fang's statements explaining why enforcement of the forum selection clause would be unreasonable and unjust.
Many of these same arguments were made by the party opposing enforcement of a forum selection clause in In re AIU Insurance Company and were rejected by the Texas Supreme Court. See In re AIU Ins. Co., 148 S.W.3d at 112-13. Although this evidence supports CNOOC's argument that a trial in Texas would be inconvenient, inconvenience in litigating in the chosen forum may be foreseeable at the time of contracting. When that is the case, a party must show that litigating this dispute in Texas would "be so gravely difficult and inconvenient that [they] will for all practical purposes be deprived of [their] day in court." Id. (quoting M/S Bremen, 407 U.S. at 18). The evidence showed that SAL agreed to be bound by the 1986 Settlement Agreement when it acquired the working interests from YPF. And when SAL transferred the working interests to SES, it was foreseeable that the forum selection clause would apply to SES and its affiliates. See id.
We conclude the evidence supports the trial court's implied finding of fact that the CNOOC entities did not carry their burden of showing enforcement of the forum selection clause would be unreasonable and unjust.
Conclusion
In summary, we conclude the evidence supports the trial court's denial of the special appearance. Accordingly, we overrule the CNOOC entities' sole issue and affirm the order of the trial court.