Two things stand out in the Bernie Madoff spin-off case.  The first is that everyone involved has been determined to be a wrongdoer, and the second is that the case should have taken place in the Netherlands.

In New Greenwich Litig. Trustee, LLC v Citco Fund Servs. (Europe) B.V.  2016 NY Slip Op 06796  Decided on October 18, 2016  Appellate Division, First Department  Tom, J. we see how the Netherlands gets involved.  “The forum selection clause in PWC Netherlands’s contract with the funds provides that [*7]”[u]nless the parties expressly agree otherwise in writing, all disputes between the Client and the Contractor relating to this Contract will be referred to the competent District Court of Amsterdam.” Plaintiff argues that this forum selection clause is permissive, not mandatory; is not binding on the Trustee, since the funds’ manager is the “Client” who commissioned the engagement; PWC Netherlands waived its rights under the forum selection clause by actively litigating in New York; and litigating in Amsterdam would be unreasonable.

These arguments are unavailing. First, the language in the clause requiring a written agreement in order to litigate in a forum other than Amsterdam is unequivocal and indicative of the mandatory nature of the parties’ agreement (see Boss v American Express Fin. Advisors, Inc., 6 NY3d 242, 246 [2006]). Moreover, plaintiff does not allege that the parties so agreed in writing. Second, the Trustee is bound by the clause, because it stands in the shoes of the funds. Third, PWC Netherlands did not unreasonably delay in seeking dismissal under the forum selection clauses. Finally, plaintiff cites no compelling reason why litigation in Amsterdam would be unreasonable, particularly given that related litigation is already pending there against PWC Netherlands. Therefore, the claims by plaintiff against PWC Netherlands were properly directed to be heard in Amsterdam.”

As to in pari delicto:  “In this appeal, we are asked to decide whether New York law, rather than Delaware law, applies to this corporate litigation resulting from the never ending saga of Bernard L. Madoff’s Ponzi scheme. This appeal also raises issues concerning whether plaintiff’s claims are precluded by the doctrine of in pari delicto;[FN1] whether the court correctly dismissed the claims of implied and contractual indemnification; and whether the forum selection clause in defendant PricewaterhouseCoopers Accountants, N.V.’s (PWC Netherlands) agreement with plaintiff’s predecessors in interest is mandatory.”

“The in pari delicto doctrine “mandates that the courts will not intercede to resolve a dispute between two wrongdoers” (Kirschner v KPMG LLP, 15 NY3d 446, 464 [2010]). ”

“Thus, since Delaware law clearly does not apply here, we apply New York law to these actions. Under New York law, we conclude that application of the in pari delicto doctrine mandates dismissal of all the causes of action save the claims for contribution, which fail on separate grounds not raised before this Court. As the Court of Appeals has explained, “[t]he doctrine of in pari delicto mandates that the courts will not intercede to resolve a dispute between two wrongdoers” (Kirschner v KPMG LLP, 15 NY3d at 464). This doctrine “serves important [*4]public policy purposes,” including “denying judicial relief to an admitted wrongdoer” which “deters illegality,” and avoiding “entangling courts in disputes between wrongdoers” (id).

Significantly, under the doctrine, the acts of a corporation’s authorized agents, such as its officers, are imputed to the corporation “even if [the] particular acts were unauthorized” (id. at 465). “Agency law presumes imputation even where the agent acts less than admirably, exhibits poor business judgment, or commits fraud” (id.). Further, “the principle that a wrongdoer should not profit from his own misconduct is so strong in New York that . . . the defense applies even in difficult cases and should not be weakened by exceptions” (id. at 464 [internal quotation marks omitted]).”