In Namdar v. Fried, C.A. No. 2024-0535-JTL (Del. Ch. June 6, 2025), the Delaware Court of Chancery refused to dismiss a claim seeking damages for breach of a forum selection provision. In so doing, the Court reaffirmed the viability of such a cause of action under the Delaware Supreme Court’s decision in El Paso Natural Gas Co. v. TransAmerican Natural Gas Corp., 669 A.2d 36 (Del. 1995).

Namdar is notable because a recent decision from the Court of Chancery (Vivint Solar) interpreted a post-El Paso Supreme Court decision (Ingres) as overruling El Paso by directing courts to enforce forum selection provisions through injunctive relief, rather than monetary damages. See Vivint Solar, Inc. v. Lundberg, 2024 WL 2755380 (Del. Ch. May 30, 2024); Ingres Corp. v. CA, Inc., 8 A.3d 1143 (Del. 2010). But according to Namdar, “[a]lthough Ingress overruled El Paso on whether the Delaware courts could grant injunctive relief to enforce forum selection clauses, Ingres did not overrule El Paso on a party’s ability to recover damages for breach of a forum selection clause.” Because “[t]he part of El Paso stating that a party can recover damages for breach of a forum selection clause remains good law,” the Namdar decision followed El Paso and refused to dismiss the claim which sought monetary damages for breach of a forum selection provision.

Factual background

The facts underlying Namdar are relatively straightforward. Back in 2021, David Namdar became friends with fellow cryptocurrency entrepreneur Jordan Fried, and Namdar agreed to lead and invest in a company known as Immutable Holdings Inc. (the Company). Later that year, a dispute arose between Namdar and the Company’s Head of Legal (Jeffrey Long). To resolve the dispute, the parties entered into a settlement agreement styled as an employment agreement (the Agreement), which contained a broad release of claims. It also contained a mandatory forum selection provision that designated “the state or federal courts located in the State of Delaware” as the appropriate forum for “[a]ny action or proceeding by [Namdar] to enforce th[e] Agreement.” 

Namdar subsequently challenged the validity of the Agreement by suing the Company and Fried in the Superior Court of San Juan, Puerto Rico (the Puerto Rico Action). The Company and Fried sought and obtained dismissal of the Puerto Rico Action on the basis that Namdar’s claims must be brought in Delaware. In dismissing the Puerto Rico Action, the court held that Namdar’s filing constituted a breach of the Agreement’s forum selection clause. Namdar never appealed this decision (which, consequently, became final).

In 2024, Namdar sued Fried, Long, and the Company in the Delaware Court of Chancery. The Company asserted two counterclaims, including a claim for breach of the Agreement’s forum selection clause which “sought damages measured by the expenses incurred in the Puerto Rico Action.”

The Court of Chancery allows the company to pursue damages for Namdar’s breach of the forum selection provision

The Court of Chancery refused to dismiss the Company’s counterclaim for breach of the Agreement’s forum selection provision, reasoning that damages resulting from Namdar’s initiation of the Puerto Rico Action were recoverable as expectation damages. 

To start, the Court had little trouble finding that the element of breach was satisfied based upon the Puerto Rico court’s final decision as to Namdar’s breach of the forum selection provision. As the Court of Chancery observed, “a foreign judgment entered by a court in the United States “has the same effect … as a judgment of the Superior Court of this State and may be enforced or satisfied in like manner.” The Court next explained that, because the Company’s litigation expenses were recoverable as expectation damages under general principles of contract law, the Company had stated a cognizable claim “[a]s a matter of blackletter law.”

Finally, the Court held that Delaware case law supported the Company’s ability to recover damages for breach of the Agreement’s forum selection clause. Most notably, the Delaware Supreme Court’s controlling decision in El Paso “addresses the scenario presented” in Namdar—i.e., a damages claim in the proper forum following dismissal of claims asserted in a foreclosed forum. A similar scenario was also present in Cornerstone Brands, Inc. v. O’Steen, a Court of Chancery case decided ten years after El Paso which followed its reasoning.  2006 WL 2788414 (Del. Ch. Sept. 20, 2006).

Namdar argued that the Company’s counterclaim should be dismissed, claiming that the Delaware Supreme Court’s decision in Ingres “instructed [the Court of Chancery] to enforce forum selection clauses through injunctive relief… as an exclusive remedy.” But Vice Chancellor Laster rejected Namdar’s overbroad reading of Ingres. As the Vice Chancellor explained, “Ingres did overrule El Paso in part, but only so much as the earlier decision held that the Court of Chancery lacked subject matter jurisdiction to issue an anti-suit injunction …. Ingres disagreed and instructed this court to issue anti-suit injunctions enforcing forum selection clauses.” But nothing in Ingres foreclosed a party’s ability to “also obtain damages measured by the expenses incurred litigating in the foreclosed forum.” 

Interested readers should carefully review Namdar’s exposition of relevant case law—as well as its discussion of the remaining arguments advanced by Namdar. But the bottom line for practitioners is rather simple. You should think twice before breaching a mandatory forum selection provision that designates Delaware as the appropriate forum.