Summary
The North Carolina Business Court denies Buss ChemTech AG’s motion to transfer, stay, or dismiss an action arising from an engineering, procurement, and field-support agreement for an anhydrous hydrogen fluoride plant. The court holds that the agreement concerns the improvement of real property in North Carolina or the provision of materials for that improvement, making its New York choice-of-law and forum-selection clauses void under N.C. Gen. Stat. § 22B-2. The court leaves Buss’s Rule 12(b)(6) arguments for a separate order.
Topics
Practice areas
Questions Presented
- Whether the contractual New York choice-of-law and forum-selection clauses were void and unenforceable under N.C. Gen. Stat. § 22B-2 because the agreement concerned the improvement of North Carolina real property or the provision of materials for that improvement.
- Whether the North Carolina court could transfer the action to the United States District Court for the Southern District of New York under Rule 12(b)(3), or whether dismissal without prejudice would be the appropriate mechanism for seeking litigation in another state or federal court.
- Whether the action should be dismissed or otherwise transferred under forum non conveniens in favor of the Southern District of New York.
Holdings
- The agreement was a contract for at least the provision of materials for the improvement of real property in North Carolina, so N.C. Gen. Stat. § 22B-2 applied. The clauses selecting New York law and New York forums were therefore void and unenforceable.
- A North Carolina state court cannot transfer an action to a federal court in another state. Although transfer is the appropriate Rule 12(b)(3) mechanism for moving an action between North Carolina judicial districts, dismissal without prejudice is the appropriate mechanism for seeking litigation in another state or federal court.
- The court denied dismissal or transfer under forum non conveniens because the relevant factors overwhelmingly favored retaining the case in North Carolina.
Key quotations
“A provision in any contract, subcontract, or purchase order for the improvement of real property in this State, or the providing of materials therefor, is void and against public policy if it makes the contract, subcontract, or purchase order subject to the laws of another state, or provides that the exclusive forum for any litigation, arbitration, or other dispute resolution process is located in another state.” (¶ 35)
“Accordingly, the Clauses contained in § 21(b) and § 29 of the agreement are void and unenforceable under N.C. Gen. Stat. § 22B–2 and do not provide a valid basis upon which Buss may seek to have this action transferred or New York law applied to this dispute.” (¶ 56)
“Therefore, in the exercise of its discretion, the Court DENIES Buss’s motion to transfer, stay, or otherwise dismiss this action under Rule 12(b)(3), N.C. Gen. Stat. § 7A–258, and the doctrine of forum non conveniens.” (¶ 72)
Factual background
PCS Phosphate, a Delaware corporation headquartered in North Carolina, was constructing an anhydrous hydrogen fluoride plant in Beaufort County, North Carolina. PCS Phosphate and Swiss corporation Buss ChemTech AG entered an Engineering, Procurement and Field Support Agreement under which Buss would provide engineering, process technology, equipment, materials, installation assistance, supervision, training, commissioning, and testing services for the plant. The agreement contained clauses selecting New York law and requiring disputes to be resolved in New York or the Southern District of New York. Plaintiffs alleged that Buss breached the agreement and asserted claims for breach of contract, breach of warranty, negligent misrepresentation, and professional negligence.
Procedural history
PCS Phosphate Company, Inc. and PCS Administration (USA), Inc. filed the original complaint on February 28, 2025, and an amended complaint on June 20, 2025, asserting claims against Buss and Jacobs Engineering Group, Inc. The case was designated a mandatory complex business case and assigned to the North Carolina Business Court. Buss filed the motion on July 21, 2025; after briefing and a hearing, the court addressed only the Rule 12(b)(3), statutory venue, and forum non conveniens issues, reserving Rule 12(b)(6) issues for a later order.