Thursday, August 18, 2016

Case of the Day: Tech Sonic, Inc v. Sonics & Materials, Inc., 2016 U.S. Dist. LEXIS 94979 (D. Conn. July 20, 2016)


Three companies (two Korean and one American) are involved in this action. Third party Tech-Sonic Co. (TSC) entered into a sales agreement with defendant Sonics & Materials, Inc. (SMI). Then TS assigned its right to sue under the agreement to the plaintiff, Tech-Sonic, Inc. (TSI). Based on the assigned right, TSI (a U.S. company) sued SMI. Defendant SMI claims that the assignment from TSC to TSI was invalid under Korean law, because TSC, a Korean company, did not follow proper Korean corporate law procedure to make the assignment. 

After the analysis involving the number of actual shareholders in TSC and the nature of the asset, the court found that the assignment was invalid. Accordingly, the court found that TSI lacked the standing the sue.


This case reads like it came out of the conflict of laws textbook. A right was created in Forum A, to be enforced in Forum B--which means Forum B must adjudicate on the laws of Forum A. Reads like Joseph Beale's dream.

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