Exclusive Forum Provisions Become Mainstream

In June 2013, the Delaware Chancery Court upheld the validity of a bylaw adopted by Chevron's board of directors that designated the Delaware courts as the sole and exclusive forum for the adjudication of certain disputes, including M&A litigation and other shareholder strike suits. Although the Delaware Supreme Court has not yet considered the validity of these bylaws, we expect that it would uphold the Chevron decision.¹ Even despite the lack of Supreme Court review, the overwhelming view of corporate law experts is that exclusive forum provisions are valid and enforceable under Delaware law.²

Since the Chancery Court published the Chevron decision, more than 150 companies have implemented exclusive forum bylaws, often coupled with a consent to jurisdiction clause. While these provisions do not guarantee that all claims will be heard in Delaware, recent cases suggest that non-Delaware courts may be willing to enforce these provisions. Moreover, the use of