Publications

Warding Off Uncle Sam

July 2006
Hedge Funds Review

In our previous article (Hedge Funds Review, March, pp32-36), we examined the increased willingness of US Courts to assert jurisdiction over offshore service providers, despite what may seem like only a tenuous connection to the US.

This month, we explore how offshore hedge funds, their managers and their offshore service providers can try to reduce the risk of getting sucked into the vortex of litigation in the U.S. by including forum selection and choice of law provisions in the key agreement governing their rights and obligations to each other and to the fund's investors. A properly drawn and enforceable forum-selection clause requires that any litigation arising between the contracting parties can be resolved only in the forum specified in the contract. A choice of law provision selects the law of a specific jurisdiction that must be applied to any dispute arising from the parties' agreement, regardless of the forum in which the dispute is to be resolved.