Forum Non Conveniens Table of Authorities EU LEGISLATION Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the

recognition and enforcement of judgments in civil and commercial matters CONVENTIONS Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Brussels 1968 Lugano Conventions, Lugano 1988 The Hague Proposal of Convention on International Jurisdiction and Foreign Judgements in Civil and Commercial Matters CASES Connelly v RTZ Corp. plc [1998] A.C. 854 Continental Bank N.A. v Aeokos Cia Naviera SA [1994] 1 W.L.R. 588 Drouot Assurances SA v Consolidated Metallurgical Indistries [1998] E.C.R. I-3057 Case c-351/96 Gubisch Maschinenfabrik AG v Palombo [1987] E.C.R. 4861 Case 144/86 Harrods Ltd v Harrods (Buenos Aires) Ltd (No.2) [1992] Ch. 72 Jayaswals Neco v. Union of India, Wp (C) 2177/2007] on 2/7/2007 Kusum Ingots v. Union of India AIR 1994 Delhi 126 Logan v. bank of Scotland [1906] 1 K.B. 141 (C.A.) MacShannon v Rockware Glass Ltd [1987] A.C. 795 Mengatti c. Soc. Metallurgica Nava Stefano e Giuseppina Clunet 1989, 96 Cour d'Appel Paris, 17 November 1987 Spiliada Maritime Corp. v Cansulex Ltd [1987] A.C. 460 The Abidin Daver [1984] A.C. 398

 The Atlantic Star [1974] A.C. 436 The Jalakrishna [1983] 2 Lloyd's Rep. 628 The Tatry [1994] E.C.R. I-5439 Case c-406/92 Turner v Grovit [1999] 3 W.L.R. 794 Voth v Manildra Flour Mills Pty Ltd (1991) 171 C.L.R. 538 Zelger v Salintrini (No. 2) [1984] E.C.R. 2397 Case 129/83 BOOKS KROPHOLLER J.K., Handbuch des Internationalen Zilverfahrensrechst (Tubingen 1982) MCCLEAN David, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) SCHLOSSER P., Praxis des internationalen Privat- und Verfhrensrecht (Munich 1983) SCHRODER J., Internazionale Zustandigkeit (Opladen 1971) ARTICLES FAWCETT J., Trial in England or Abroad: The Underlying Policy Considerations (1989) ) O.J.L.S. 205 KENNET Wendy, Forum non conveniens in Europe [1995] C.L.J. 552 LAGARDE P., Le principe de proximit dans le droit international priv contemporain, Hague Recueil 1986 I 11 ROBERTSON David W., Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103 L.Q.R. 398 RUBINO-SAMMARTANO M., Il giudice nazionale di fronte alla legge straniera, RDIPP 1991, 315 VERHEUL J.P., The forum (non) conveniens in English and Dutch Law and under some international conventions (1986) 35 I.C.L.Q. 413

Introduction Transnational transactions dabbling with more than one body of law, and more than one system of courts, entail a plethora of legal risks that affect the desirability of commercial cooperation. This lacuna has been successfully tended to, by Arbitration, which remains a neutral, confidential and speedy dispute resolution mechanism. Countries world over have entered the ambit of two conventions- the UN Convention on the Recognition and Enforcement of Arbitral Awards, (New York Convention), 1958, and the Geneva Convention, allowing an easier enforcement of international arbitral awards. The doctrine of forum non conveniens (FNC) is known to be the doctrine which allows a court to divest itself of jurisdiction if, for the convenience of the litigants and the witnesses, it appears that the action should proceed in another forum in which the action might also have been properly brought in the first place.1 Basically, because the FNC doctrine allows a court that has jurisdiction over the parties to exercise its discretion not to enforce that jurisdiction, it is implied that the application of the FNC doctrine presumes that the forum court exercising this discretion has first completed the jurisdictional analysis in obtaining proper jurisdiction. The labeling of the doctrine as non conveniens was to distinguish cases involving judicial discretion of the court from cases where the court was bound to dismiss. In addition, the FNC doctrine was said to be introduced to distinguish discretionary authority from the plea of forum non competens where, unlike forum non conveniens, the issue is about power or jurisdiction rather than discretion.2 The forum non conveniens doctrine could also be referred to as a negative doctrine, in the sense that it is invoked to decline jurisdiction, as opposed to the positive doctrine of forum conveniens where a court is invoking jurisdiction because it considers itself an appropriate forum.3 The forum non conveniens doctrine today has been adopted mostly by common law countries.4 This is probably because the doctrine is

1 2

BLACKS LAW DICTIONARY 680 (8th ed. 2004). Robert Braucher, The Inconvenient Federal Forum, 60 HARV. L. REV. 908, 909 (1947); WARREN FREEDMAN, FOREIGN PLAINTIFFS IN PRODUCTS LIABILITY ACTIONS THE DEFENSE OF FORUM NON CONVENIENS 2 (Quorum Books 1988). 3 J.J. FAWCETT, DECLINING JURISDICTION IN PRIVATE INTERNATIONAL LAW 6 (Clarendon Press 1995). 4 See John Fitzpatrick, The Lugano Convention and Western European Integration: A Comparative Analysis of Jurisdiction and Judgments in Europe and the United States, 8 CONN. J. INTL L. 695, 721 (1993); FAWCETT,

rooted completely in common law court decisions, without any evidence of its trace in the Roman law or in continental civil practice, despite its Latin name.5 As such, in major civil law countries, such as those in continental Europe where the Brussels and Lugano Conventions on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters are in place, the doctrine is not permitted. Instead, todays courts in those countries cannot decline jurisdiction based on considerations of convenience and must assume jurisdiction as a matter of law when the applicable jurisdictional rules have found jurisdiction.6 Historical Background: The origin of the FNC doctrine has been described as obscure and murky.7 The doctrine of forum non conveniens originated in Scotland in the nineteenth century but largely developed in United States of America. In America a court, in order to stay an action, must take into account both the private interest of parties and the public interest of the forum State.8 In England, the idea of forum non conveniens was largely limited until 19739 when the House of Lords changed radically its position in The Atlantic Star.10 The case concerned two vessels from Holland that had a collision in Belgian waters. Due to the fact the before 1973 the only way for a court to stay actions was in case of vexatious or oppressive litigation or abuse of process the Court of Appeal refused the stay finding that none of these situations arose.11 Surprisingly the House of Lords redefined the concept of vexatious or oppressive litigation and abuse of process in order to widen the possibility to stay actions in a greater number of cases. Lord Reid accused

supra note 10, at 10 (discussing how the author observed that forum non conveniens was adopted in common law countries but not in civil law countries, except in Japan where a special circumstances doctrine that has resemblance to the forum non conveniens doctrine is adopted). 5 GARY B. BORN, INTERNATIONAL CIVIL LITIGATION IN UNITED STATES COURTS 289 (Kluwer Law International 3d ed., 1996). 6 Alan Reed, To Be or Not to Be: The Forum Non Conveniens Performance Acted Out on Anglo-American Courtroom Stages, 29 GA. J. INTL & COMP. L. 31, 38-39 (2000) (in which the author notes that the central tenet of the Brussels convention is the principle of iudex tenetur impertiri indicum isum by which a court is bound to decide a case over which jurisdiction exists, and this principle is in fundamental opposition to forum non conveniens). See also RICHARD H. KREINDLER, TRANSNATIONAL LITIGATION: A BASIC PRIMER 36 (1997).
7
8 9

BORN, supra note 2 (quoting Edward L. Barrett, Jr., The Doctrine of Forum Non Conveniens, 35 CAL. L. REV. 380, 386 (1947); American Dredging Co. v. Miller, 510 U.S. 443 (1994)).

David McClean, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) at 117-118 Logan v. Bank of Scotland [1906] 1 K.B. 141 (C.A.) 10 The Atlantic Star [1974] A.C. 436 11 The Atlantic Star [1973] Q.B. at 381-382, 384-385, 387-388

the Court of Appeal of parochialism and chauvinism and the rest of the House of Lords12 agreed with such a change in order to achieve the desire outcome.13 Subsequently, the English doctrine of forum non conveniens was been unclear for a relatively short period of time, because The Atlantic Star had simply created a brand-new philosophy useing old vocabulary and conceptual apparatus.14 In 1978, in MacShannon v Rockware Glass Ltd, the House of Lords in the word of Lord Salmon stated: "the real test of [whether to grant a stay] depends upon what the court in its discretion considers that justice demands". This test is preferable to the test of whether the plaintiff has behaved 'vexatiously' or 'oppressively' on a so-called liberal interpretation of those words. With respect, it is extremely difficult to interpret them liberally without emasculating them and completely destroying their true meaning.15 Almost unanimously the House of Lords agreed that the concept had to be

changed. However, English judges tended not to use the new words of forum non conveniens preferring for a more open-minded interpretation of the concept of oppression, vexation and abuse. It was only 1984 when Lord Diplock, in The Abidin Daver, was able to say "My Lords, the essential change in the attitude of the English courts to pending or prospective litigation in foreign jurisdictions that has been achieved step-by-step during the last 10 years as a result of the successive decisions of this HouseI think the time is now ripe to acknowledge frankly it is, in the field of law with which this appeal is concerned, indistinguishable from the Scottish legal doctrine of forum non conveniens.16 In Spiliada Maritime Corp. v Cansulex Ltd17 the House of Lords, through Lord Goff, summarized the English approach to the doctrine of forum non conveniens stating the following rules: a) The English judges will have to decline jurisdiction when a trial is likely to be more suitable elsewhere for the interests of all the parties and for the benefit of justice. Of course the defendant must show to the court that another forum with these characteristics is available.
12

See the judgements of Lord Wilberforce and Lord Kilbrandon in The Atlantic Star [1974] A.C. at 467-469 and 477-478 13 See David W. Robertson Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103 L.Q.R. 398 at 411 14 David W. Robertson Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103 L.Q.R. 398 at 411 15 MacShannon v Rockware Glass Ltd [1987] A.C. 795 at 819 16 The Abidin Daver [1984] A.C. 398 at 411 17 Spiliada Maritime Corp. v Cansulex Ltd [1987] A.C. 460

b) The second issue pointed out by Lord Goff concerns the burden of proof. It is in fact the defendant who must prove that there is a clear or distinctly more appropriate place to handle the trial.18 c) The factors that a court must consider in order to decide which is the more appropriate forum are legion. The weight to be given to these factors is normally discretionary. There is not a complete list of the factors that a court must take into account in deciding the question. However, some of the most important guidelines are the availability of witnesses, the law applicable to the transaction, the residence of the parties or the place where the parties carry on business and the possibility for the plaintiff to obtain justice in the foreign jurisdiction. With reference to this point also the special competence or expertise of a particular court must be taken into account in order to decide whether an alternative forum is more appropriate. The weight to be given to these factors is for the court to decide on case-by-case basis. d) If there is any circumstance by reason of which a claimant could not obtain justice in a foreign country the court will not grant a stay.19 Furthermore, in order to help the claimant to preserve some of the legal advantages of the English forum sometimes it is considered more appropriate to decline English jurisdiction on condition of a security posted by the defendant. For the same reasons the defendant might also be asked by the English court, for instance, to waive applicable limitation periods or to agree to other stipulations. The same Lord Goff, in Connelly v RTZ Corp. plc20, pointed out the following new points: a) The general absence of some kind of legal aid is not a sufficient justification for the refusal of a stay because it should not be forgotten that financial assistance for litigation is not necessarily

18 19

David McClean, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) at 120 For a different point of view see the leading Australian case Voth v Manildra Flour Mills Pty Ltd (1991) 171 C.L.R. 538 20 This particular situation arose in The Jalakrishna [1983] 2 Lloyd's Rep. 628

regarded as essential, even in sophisticated legal systems. It was not widely available in this country until 1949.21 b) The legitimate personal or judicial advantage for the plaintiff in proceeding in England is not considered a decisive factor: a general principle may be derived, which is that, if a clearly more appropriate forum overseas has been identified, generally speaking the plaintiff will have to take that forum as he finds it, even if it is in certain respects less advantageous to him than the English forum. He may, for example, have to accept lower damages, or do without the more generous English system of discovery. The same must apply to court procedure, including the rules of evidence, applicable in the foreign forum. Only if the plaintiff can establish that substantial justice cannot be done in the appropriate forum, will the court refuse to grant a stay.22 Present Day Applicability: It is well established that forum non conveniens has replaced in England the ancient rule of lis alibi pendens. On the other hand, the Brussels and Lugano Conventions and the more recent EC Council Regulation No 44/200123 rely on the rule of lis alibi pendens, so that the set of rules described in Spillada are now subject to a narrow application. It is outside the scope of this essay to explain whether there is still a place for the application of the forum non conveniens rule24 so that it is sufficient to underline that for the judgements between the European Member State most of the time the rule of the Regulation shall prevail. Article 27 of the Regulation which substitutes article 21 of the old Conventions, following the rule of lis alibi pendens, states: 1. Where proceedings involving the same cause of action and betw een the same parties are brought in the courts of different Member States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seized is established. 2. Where the jurisdiction of the court first seized is established, any court other than the court first seized shall decline jurisdiction in favour of that court.

21 22

Connelly v RTZ Corp. plc [1998] A.C. 854 Connelly v RTZ Corp. plc [1998] A.C. 854 at 873. Read also the dissenting opinion of Lord Hoffman at 875-877 23 Connelly v RTZ Corp. plc [1998] A.C. 854 at 872. See also, for instance, Re Harrods (Bueons Aires) Ltd (No. 2) [1992] Ch. 72 24 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters

The interpretation of this article can create problems in establishing whether proceedings involves the same parties, particularly in light of the fact that much international litigation involves big corporations with multiple subsidiaries in different countries. In The Tatry case25 the European Court stated that article 21 applied only in the case where the identity of parties is completely the same but this does not entirely solve the problem.26 It has also been established that the interpretation of the words "the same cause of action" must be independent from any national scheme27 and this interpretation as well may cause difficulties. Another problem concerns when exactly a court can be considered seized and the European Court stated that the case has to be definitely pending.28 On the other hand, article 30 of the new Regulation makes an attempt to solve the problem stating: For the purposes of this Section, a court shall be deemed to be seized: 1. at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or 2. if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the subsequently failed to take the steps he was required to take to with the court. The rule of lis alibi pendens and in particular the above-examined article 27 of the EC Regulation can be readily criticised because it appears to encourage a court-race. The parties can find particularly advantageous to get their forum first in order, for example, to have the case examined from the court of their own countries. Due to article 27, even in a case where England is the natural forum, the trial may be held in a different Member State because the plaintiff goes to court in that state first. It can be argued that there is always a possibility for the defendant to
25

plaintiff

has

not

have the document lodged

See Harrods Ltd v Harrods (Buenos Aires) Ltd (No.2) [1992] Ch. 72. For a complete analysis of the matter with reference to the consequences of the case see Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 561-569 26 Case c-406/92 The Tatry [1994] E.C.R. I-5439 27 See e.g. Case c-351/96 Drouot Assurances SA v Consolidated Metallurgical Indistries [1998] E.C.R. I-3057 and Turner v Grovit [1999] 3 W.L.R. 794 28 See for instance Case 144/86 Gubisch Maschinenfabrik AG v Palombo [1987] E.C.R. [25] 4861

obtain a negative declaration29 but such a remedy does not solve the problem of the race to the court, be the defendant or the claimant to welcome this race. Moreover, article 28 of the EC Regulation, substituting article 22 of the Brussels Convention states: 1. Where related actions are pending in the courts of different Member States, any court other than the court first seized may stay its proceedings. 2. Where these actions are pending at first instance, any court other than the court first seized may also, on the application of one of the parties, decline jurisdiction if the court first seized has jurisdiction over the actions in question and its law permits the consolidation thereof. 3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. Article 28 gives only the possibility to courts to stay their proceedings without giving any explanation about how to use this choice. Of course English court can rely on the principles of forum non conveniens in exercising this choice but the substantial reason why it has been decided to offer a discretion to the court is still obscure and in contrast with the aim of the Regulation. Article 29, which substitutes article 23 of the former Brussels Convention, refers to the rare possibility in which more than one court has exclusive jurisdiction and it also follows the rule of the first come first served assisting again the court-race. The Court of Appeal30 has stated that in case of exclusive jurisdiction of an English court under the rules of the Convention, the English court shall prevail over article old 21 and consequently over new article 29.
29

Case 129/83 Zelger v Salintrini (No. 2) [1984] E.C.R. 2397 David McClean, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) at 127

30

Unfortunately even in this clear case the question whether the exclusive jurisdiction shall prevail is not entirely free from doubt. The reason why the rule of forum non conveniens, seen by English lawyer as an improvement in the rule of jurisdiction, has not been accepted by lawyers from civil law jurisdictions31 is based principally on the main differences between the two systems. It has been argued by civil lawyers that the rule of forum non conveniens does not provide certainty and predictability. It is likely that exactly the opposite is true because in forum non conveniens the defendant will always know that, even if the plaintiff runs to the court first, he still has the chance to see the case handled by the most appropriate court and, even if there is not a list of factors to rely on for the decision, the choice of the court can be predicted in advance. In other words, most of the time it is possible for the defendant to predict which court will be chosen as the most appropriate. More frightening for civil lawyers are the lack of legislations and it has been argued that forum non conveniens can unfortunately lead to arbitrary decisions. Even if the opinion about the predictability of the doctrine can differ, the general structure of forum non conveniens is clear and well-established.32 Unfortunately the Latin words of the principle does not help civil lawyers in understanding the real value of the doctrine because they can create the impression that is only convenient for the court rather than helpful to provide a better decision.33 It has been argued34 that a problem arises where an English court stays its proceedings in favour of another court and the second then declines jurisdiction. This can be considered a false problem and in order to explanation why this is so we can rely on two considerations. First of all, the English court has merely stayed35 its proceedings and has not declined jurisdiction. If it is discovered that an action cannot be brought in the other country there is no longer a more appropriate forum available and, in consequence of this, an application can be made to the English court to continue the proceedings in England. In second instance, the availability of the
31 32

Continental Bank N.A. v Aeokos Cia Naviera SA [1994] 1 W.L.R. 588 See Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 33 Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 555 34 See for instance J.K. Kropholler, Handbuch des Internationalen Zilverfahrensrechst (Tubingen 1982), vol. I, ch. III, p. 282 35 Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 555 citing P. Lagarde, Le principe de proximit dans le droit international priv contemporain, Hague Recueil 1986 I 11 at 154

other court to handle the case has certainly been considered by the English court before the English proceedings were stayed and therefore it is a problem, which is unlikely to arise in practice. It has also been argued by civil lawyers that the English courts act in their own motion in order to decide whether or not to stay their proceedings.36 The court directs the process in civil law systems and there is often some kind of identification with the concept of state sovereignty. On the other, hand, in England but also in United States of America and in most of the common law countries, proceedings are mostly concerned with the interest of the parties and it is quite rare that questions of sovereignty or public interest arise.37 As we have noted, the reasons why forum non coveniens in England is considered a very helpful tool in order to help the needs of justice is not well appreciated by civil lawyers. There are certainly many reasons for this hostility but two considerations must be taken into account: first, the verbal and adversarial structure of the English civil procedure and second, the different role played by English courts in international litigation.38 The use of oral witnesses in England is much more common than in civil law countries and two factors taken strongly into consideration by English court in order to stay an action are the location of witnesses and the location of other evidence. The transportation of witnesses can considerably increase the cost of proceedings and even the inspection of documents in another country can be very expensive.39 Even if frequently, in civil law countries, the cross-examination of the witnesses and experts does not occur, in civil law countries witnesses and expert play an important role and the possibility to use a discretionary tool in deciding which court is better, could be very useful in this context. Another problem arises when it is necessary to consider the content of foreign law. English courts treats the foreign law simply as a question of fact where, even if civil law systems does not use the same approach that use to identify the domestic law, its judge can investigate the content of foreign law by himself. In Germany for example, the judge can identify the content of foreign

36 37

See Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 556 J. Fawcett, Trial in England or Abroad: The Underlying Policy Considerations (1989) ) O.J.L.S. 205 38 See Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 556 39 See for example Re Harrods (Bueons Aires) Ltd (No. 2) [1992] Ch. 72

law asking an opinion from an institute of comparative studies and in Italy the judge can investigate the content of the foreign law by himself with or without the help of experts.40 However, even if the practical reasons that lead to the introduction of the doctrine of forum non conveniens are mainly reduced in civil law countries, where there is a less rigorous use of oral witnesses, it can be argued that a more discretional approach could be welcome even in this very different background. A further matter concerns the differences between the way cases are treated by English courts and by most of the other jurisdictions. In England and Wales, large international disputes are mostly handled by London courts or go to arbitration where in most other countries the international claims are smaller and, more often than not, there are only two parties involved. Nevertheless, this is changing relatively fast. If years ago international litigation on a large scale was a prerogative of the English courts, these days big international transactions not involving the courts of London are becoming much more common all around the world. Due to this, even if explicit references to the forum non conveniens doctrine are relatively rare in civil law countries, some more discretional techniques of interpretation have been developed. In Germany, for example, although the general approach to forum non conveniens was generally hostile,41 a couple of monographs relatively favourable to the new doctrine have appeared since 1960s.42 In France, occasionally courts have declined jurisdiction because the case could be handled in a more suitable forum43 and still in France there are a few advocates of the new doctrine. In the Netherlands there is a situation where one may speak of forum non conveniens: second paragraph of article 429 the Dutch code of civil procedure, in fact, states that the court has no jurisdiction if the petition has insufficient connection with the Netherlands. Moreover it has been said that Dutch law has nowadays adopted the doctrine of forum non convieniens lock, stock and barrel44 so that even the deletion of article 429 (2) would not change anything.

40 41

M. Rubino-Sammartano, Il giudice nazionale di fronte alla legge straniera, RDIPP 1991, 315 See for example P. Schlosser, Praxis des internationalen Privat- und Verfhrensrecht (Munich 1983) at 285 42 See for example J. Schroder, Internazionale Zustandigkeit (Opladen 1971) 43 Cour d'Appel Paris, 17 November 1987 Mengatti c. Soc. Metallurgica Nava Stefano e Giuseppina Clunet 1989, 96 44 See J.P. Verheul, The forum (non) conveniens in English and Dutch Law and under some international conventions (1986) 35 I.C.L.Q. 413 at 417

The great advantage of the doctrine of forum non conveniens is the possibility to give to the courts a discretionary power in order to prevent the situation in which a case is not handled in the most appropriate or so called natural court. This discretionary power prevents the waste of money due to transportation of witnesses and to the examination of foreign documents and also tends to prevent injustices sometimes created by the rule of the first seized court. Unfortunately it is exactly the idea of a discretionary power that scares more civil lawyers for whom the choice of jurisdiction is an expression of public power and it does not easily fit with a discretionary stay of proceedings. Another objection made by civil lawyers is based on the fundamental right of the plaintiff to access to the court individuated by the legal system and the exercise of a discretional power in order to decide whether or not to stay proceedings is considered detestable.45 However, things may well change and a different approach can be noted in The Hague Convention on International Jurisdiction and Foreign Judgements in Civil and Commercial Matters. Article 21 (1) of the draft states, apparently repeating the Brussels Convention and the EC Regulation states that when the same parties are engaged in proceedings in courts of different Contracting States and when such proceedings are based on the same causes of action, irrespective of the relief sought, the court second seized shall suspend the proceedings The title of the article is Lis pendens and it might seem clear that the approach of the new Convention repeats the rules of the EC Regulation. However, following undoubtedly a very different approach article 22 (1) provides that in exceptional circumstances the court may, on application by a party, suspend its proceedings if in that case it is clearly inappropriate for that court to exercise jurisdiction and if a court of another State has jurisdiction and is clearly more appropriate to resolve the dispute. Such application must be made no later than at the time of the first defence of the merits. Paragraph 2 of article 22, recalling the English doctrine and in particular Lord Goff in Spiliada continues: The court shall take into account, in particular: a) any inconvenience to the parties in view of their habitual residence; b) the nature and location of the evidence, including documents and witnesses, and the procedures for obtaining such evidence;
45

Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 560

c) applicable limitation or prescription periods; d) the possibility of obtaining recognition and enforcement of any decision on the merits. Paragraph 4 deals with the possibility for the first court seized to ask some form of security as we have seen in Spiliada and paragraph 5 provides that when the court has suspended its proceedings under paragraph 1, a) It shall decline to exercise jurisdiction if the court of the other State exercises jurisdiction, or if the plaintiff does not bring the proceedings in that State within the time specified by the court; or b) It shall proceed with the case if the court of the other State decides not to exercise jurisdiction. The Preliminary Document No 18 of February 200246 underlines that The Convention as currently drafted does not allow for the possibility of applying forum non conveniens in situations in which there exists an exclusive choice of court clause because the special rules do not apply when the jurisdiction of the court seized is not founded on an exclusive choice of court agreement.47 Even if the rules of the proposal are stricter than the English rules it can be definitely assumed that the doctrine of forum non conveniens is hopefully going to be accepted even by civil law jurisdictions. Application in the American Context: On a generic note, in the United States of America, the defendant may move an action seeking to dismiss an action on the ground of Forum Non Conveniens. Invoking this doctrine usually means that though the plaintiff properly invoked the jurisdiction of the court, it is inconvenient for the court and the defendant to have a trial in the original jurisdiction. The court must balance convenience against the plaintiffs choice of forum. In other words, if the plaintiffs choice of forum was reasonable, the defendant must show a compelling reason to change jurisdiction. If a transfer would simply shift the inconvenience from one party to the other, the plaintiffs choice of forum should not be disturbed.

46 47

See The Preliminary Document No 18 of February 2002 submitted by Avril D. Haines See article 22(1) of the Draft of the Hague Convention on International Jurisdiction and Foreign Judgements in Civil and Commercial Matters

Generally, a corporation sued in the jurisdiction of its headquarters is not entitled to seek a Forum Non Conveniens dismissal. Thus if an American corporation is sued in an area where it only transacts business but not where it has its headquarters, and the court dismisses based upon FNC, the plaintiff may file the action once more, in the jurisdiction of the corporations headquarters. In deciding whether to grant the motion, the court considers certain relevant points: The location of potential witnesses. The defendant must make a full and candid indication, naming the potential witnesses for the defence, and enumerating details as to their location, as to what their testimony may be and how crucial it is for the defence, and setting forth how exactly they may be inconvenienced by having to testify in the court chosen by plaintiff. The location of relevant evidence and records. The defendant must identify the records; explain details of those in charge of the records; address issues of necessity, language, and translation problems; volume of such records; the law governing these records; and rule out the existence of duplicate records in the jurisdiction chosen by the plaintiff. The mere fact that records need to be translated is not sufficient grounds to invoke FNC. Possible undue hardship for the defendant. The defendant must explain what the hardship is and how material the costs are. If there are costs involved, they need to be spelled out in astute detail. If there is a difficulty in getting witnesses out of a foreign court and into the original court, this needs to be revealed to the court. The defendant must explain why the use of Letters Rogatory or other judicial reciprocity tools are not sufficient and cannot replace actual transfer of the case. The standard that the defendant must meet is overwhelming hardship if they are required to litigate in the forums State. Availability of adequate alternative forums for the plaintiff. Merely pointing out that the plaintiff could have sued somewhere else is not sufficient to succeed on an FNC motion. The expeditious use of judicial resources. In practice, this is just boilerplate language that comes along with the application, often utilised purely out of a perfunctory requirement in order to show concern for the judiciary. However, sometimes the court chosen by the plaintiff may be logistically or administratively unfit or illequipped for the case; for example, a case may involve a large number of torts.

The choice of law applicable to the dispute. If all other factors weigh in favour of keeping the case in the jurisdiction where it was filed, then the court may choose between application of local law (lex fori) or relevant foreign law. Thus, the mere fact that foreign law may apply to the event, circumstances, accident, or occurrence is not a strong reason to dismiss the case on FNC grounds.

Questions of public policy. In analyzing the factors, the subject matter of the complaint may touch on a sensitive issue that is important to the laws of either the original jurisdiction or the alternative forum. Those public policy issues must be pinpointed, analyzed and briefed in a way that makes it clear why this issue overrides the other factors. For example, an employee suing a foreign corporation in a state of employment, may enjoy the public policy to protect local employees from foreign abusers. See the Federal Employers Liability Act (FELA) for further reference.

The location where the cause of action arose. In most states, defendant must usually show that the cause of action arose outside of the jurisdiction. The identities of the parties. Who is suing whom? Is the plaintiff suing an individual defendant or a small company without financial means as a method to oppress the defendant with financial and legal costs by litigating in a remote court? Is the defendant a conglomerate making the FNC application simply to force the plaintiff to bear expensive costs of travel and retainer of foreign lawyers? A plaintiff who is a resident in the state where action was filed is normally entitled to have his case heard in his home state.

Vexatious motive. Where there is no evidence that the plaintiff had improper intent in bringing the case specifically in a particular forum, courts usually deny the FNC motion. Jurisprudential development and political conditions at the foreign forum. Is the court going to send the plaintiff to a land where the law is underdeveloped, uncivilized, or where there is no equal protection or due process? Is the court going to send the plaintiff to another court in a country where violence is rampant or in the middle of a war? A suit will not be dismissed if the foreign court does not permit litigation of the subject matter of the complaint, no live testimony of the plaintiff is required by appearance, or if the foreign law is otherwise deficient in its protocols or procedures.

The determination of the court may not be arbitrary or abusive as this is a drastic remedy to be applied with caution and restraint. As for the transfer of a trial to a jurisdiction outside of the U.S., courts will only grant the transfer if a foreign court is more appropriate, and there may be a real opportunity to obtain justice there. In New York, for example, there is a strong presumption in favor of the plaintiffs choice of forum.48 A defendant must show compelling evidence in order to disturb the choice of forum. The burden of proof is entirely on the defendant.49 The court must also consider the defendants vast resources compared with the plaintiffs limited resources as an aggrieved individual.50 In 2006, the 2nd Circuit Federal Court in New York issued a decision in the famous Coca Cola case. Coca Cola took over assets of Jews expelled from Egypt in the 1950s and was sued in New York.51 In that case, the plaintiffs were Canadians and nonresidents of New York. The court denied Coca Colas FNC motion and the U.S. Supreme Court denied certiorari. The 2nd Circuit stated that the fact that the New York court would need to apply modest application of Egyptian law was not a problem because courts of this Circuit are regularly called upon to interpret foreign law without thereby offending the principles of international comity. Also, the fact that there were witnesses abroad was not a problem either. They could be flown into the U.S. or Letters Rogatory could be issued to the Egyptian courts to collect their testimony. Further, it was held that in an FNC scenario, a court applies the balance of conveniences, but preference (and weight) must be given to the fact that plaintiffs chose this particular forum for legitimate reasons. The fact that plaintiffs could sue in Canada was not relevant because Coca Cola was a U.S. company and it was perfectly reasonable to sue in the US. There have been efforts by State legislatures to limit the availability of the doctrine to make local

48

Gulf Oil v. Gilbert, 330 U.S. 501, 508 (1947); R. Maganlal & Co., 942 F.2d 164, 167 (2nd Cir. 1991); WIWA v. Royal Dutch Petroleum Co., 226 F.3d 88, 101 (2d Cir. 2000); and Maran Coal Corp. V. Societe Generale de Surveillance S.A., No. 92 CIV 8728, 1993 US.Dist. LEXIS 12160 at *6 (S.D.N.Y. September 2, 1993). 49 Strategic Value Master Fund, Ltd. v. Cargill Fin. Serv. Corp., 421 F.2d 741, 754 (S.D.N.Y. 2006). 50 See Guidi v. Inter Continental Hotels Corp., 95 CIV 9006, 2003 U.S.Dist. LEXIS 85972 (S.D.N.Y. November 29, 2009), and WIWA: defendants have not demonstrated that these costs [of shipping documents and witnesses] are excessively burdensome, especially in view of defendants vast resources. Also, Presbyterian Church of Sudan v. Talisman Energy, Inc., 244 F.Supp.2d 289 (S.D.N.Y. 2003) at 341: A countervailing factor is the relative means of the parties. 51 Bigio v. Coca Cola Company, 448 F.3d 176 (2d Cir. 2006), certiorari to Sup. Ct.

jurisdictions more plaintifffriendly. In Texas, for example, parties in product liability cases may not invoke the rule. Application in the British Context: In England, the concept of forum conveniens has always been a relevant factor in the exercise of the discretion, in order to grant permission to serve out of the jurisdiction under their Order 11 Rule (1) (1) i.e. Rule 27 of the Civil Procedure Rules, 1998, but until 1984, the English courts refused to accept that the jurisdiction to stay actions commenced against defendants who are sued in England as of right could be based on forum non conveniens grounds. In England, the idea of forum non conveniens was largely limited until the decision of the House of Lords in 1973 in The Atlantic Star52 which radically changed its position. A defendant who sought a stay of English proceedings had a very heavy burden on his shoulders. The case concerned two vessels from Holland that collided in Belgian waters. Due to the fact that before 1973 the only way for a court to stay actions was in case of vexatious or oppressive litigation or abuse of process, the Court of Appeal refused the stay finding that none of these situations arose. Surprisingly, the House of Lords redefined the concept of vexatious or oppressive litigation and abuse of process in order to widen the possibility to stay actions in a greater number of cases. Lord Reid blamed the Court of Appeal of parochialism and chauvinism and the rest of the House of Lords agreed with such a change in order to achieve the desire outcome. Later, the English doctrine of forum non conveniens had been unclear for a relatively short period of time, because The Atlantic Star had created a brand-new philosophy using old vocabulary and conceptual apparatus. In the process of development of modern English private international law, the year 1978 stands out as a particularly significant milestone. In January of that year, a differently constituted House of Lords decided the case of MacShannon v Rockware Glass Ltd53 just four years after unanimously rejecting an invitation to import the Scottish legal doctrine of forum non conveniens into English law in The Atlantic Star.

52 53

[1974] A.C. 436 [1978] A.C. 795.

The House of Lords went considerably further when all, except Lord Keith of Kinkel, were in favour of discontinuing the use of the words oppressive and vexatious altogether. Lord Diplock restated that governing principle as being that, in order to justify a stay, two conditions had to be satisfied, one positive and one negative: (a) the defendant had to satisfy the court that there is another forum to whose jurisdiction he is amenable in which justice could be done between the parties at substantially less inconvenience or expense, and (b) the stay was not to deprive the claimant of a legitimate or juridical advantage which would be available to him if he invoked the jurisdiction of the English Court. In The Atlantic Star and MacShannon, the House of Lords declined to adopt the doctrine of forum non conveniens as part of English law preferring a more open-minded interpretation of the concept of oppression, vexation and abuse. In fact, in the words of Lord Salmon, he said the real test of [whether to grant a stay or not] depends upon what the court in its discretion considers that justice demands. But by 1984, when The Abidin Daver54 was decided, Lord Diplock was able to say forcefully that the essential change in the attitude of the English courts to pending or prospective litigation in foreign jurisdictions that has been achieved step-by-step during the last ten years as a consequence of the successive decisions of the House of Lords commencing with The Atlantic Star: judicial chauvinism has been replaced by judicial comity to an extent which I think the time is now right to acknowledge frankly is, in the field of law with which this appeal is concerned, indistinguishable from the Scottish legal doctrine of forum non conveniens. Ultimately, in Spiliada Maritime Corp v Consulex Ltd.,55 the House of Lords summarized the English approach to the doctrine of forum non conveniens very aptly, stating that the basic principle is that a stay will only be granted on the grounds of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.

54 55

[1984] A.C. 398. [1987] A.C. 460.

In Connelly v RTZ Corp, Plc.56, the House of Lords had to resolve a motion for a stay in favour of Namibia. The claimant, a former worker injured at a Namibian uranium mine, responded with the submission that, unless the case could be brought in England on legal aid, it could not be brought at all. The majority of the House of Lords (reversing the court below) found that, although all other factors pointed to Namibia as the appropriate forum, the availability of legal aid could be a relevant factor in an exceptional case justifying deciding a stay, given the factors that accumulated in favour of the claimant of such legal aid. In the meantime, a much larger and potentially more significant set of proceedings had been commenced in England in Cape Plc v The Lubbe.57 The litigation was concerned with redress for asbestosis contracted during the operations of the Cape Group in mining asbestos in South Africa during the apartheid era. The case therefore had a fundamentally different complexion to Connelly. It has been common ground in Connelly that Namibia was an available forum to the plaintiff since the company which had employed him was incorporated there and continued to operate. In Lubbe, however, this was not so. Thus, the availability of an alternative forum depended solely upon the facts that, after writs had been issued in England, Cape had given undertakings that it would submit to the jurisdiction of the South African courts. Indeed, Cape practically explored whether a public interest law centre in Johannesburg might be prepared to take up the case on behalf of the claimants. The approach was rejected. The first English writ was issued on behalf of Mrs. Lubbe and four other claimants only. The case was stayed at first instance, but the Court of Appeal allowed the appeal emphasizing that the South African forum was only available as a result of Capes undertakings. Leave to appeal to the House of Lords was refused. Then, in December 1998, writs were issued by some 3,000 claimants on the same legal theory. Cape then commenced a second round of forum non conveniens objections. This time, both at first instance and in the Court of Appeal, it was decided that South Africa was the more appropriate forum and that a stay should be granted. The Court of Appeal found no exceptional circumstances of the kind required by the House of Lords in Connelly were present in Lubbe. The claimants appealed to the House of Lords. On the appeal, the Republic of South Africa itself intervened. It did so in favour of the claimants, arguing that it
56 57

[1998] A.C. 854 at 873. [2000] UKHL 41

saw no public interest in requiring its courts to adjudicate in a dispute which arises from the alleged acts of an English company with the laws of the old South Africa. The House of Lords decided the forum issue in favour of the claimants. Lord Bingham of Cornell held: In the special and unusual circumstances of these proceedings, lack of the means in South Africa, to prosecute these claims to a conclusion, provides compelling grounds, at the second stage of the Spiliada test for refusing to stay the proceedings here. A trial date was fixed in England for April 2002. On 21 December 2001, the (by now) 7,500 claimants agreed a settlement with Cape. After protracted further negotiations, the total amount of the settlement was revised in March 2003 to 10.7 million. Application in the Indian Context: Within the domestic system, the principle is applied in cases where the judicial structure is federal and not unified in structure. The debate assumes importance given the expansions in jurisdiction under certain legislations which allow the plaintiff a choice to file a suit in his place of residence, as opposed to the principle in the Code of Civil Procedure which requires filing of suits in the defendants place of residence. Now, if a Court does have the jurisdiction under either the CPC or under the specific provisions such as S. 62(2) Copyrights Act or S. 134(2) Trademarks Act, can it refuse to hear the case on the ground that a more alternative forum is available? Does the private international law principle of forum non conveniens extend to the jurisdiction of Courts within India in a solely domestic context? The Delhi High Court decision in St. Ives Laboratories v. Arif Perfumers,58 suggests that it does. The case involved allegations of trademark infringement. It was not the case of the plaintiff that it resided in Delhi. Thus, for the purposes of the case, the special jurisdictional sections were irrelevant. The question had to be decided in accordance with the rules of the Civil Procedure Code. In particular, the issue was whether part of the cause of action arose in Delhi, so that the Delhi Courts could assume jurisdiction. There was a clear allegation in the plaint that the defendants were surreptitiously and clandestinely trading their goods under the impugned trademark and labels in Delhi and in other parts of the country. The trademark was registered in Delhi, and the plaintiff alleged that it was
58

CS (OS) No. 78/2009, decided by Justice S.N. Dhingra

suffering losses in Delhi too. In deciding jurisdiction, a Court usually satisfies itself with the averments made in the plaint. In the facts of the case, those averments indicated that part of the cause of action did arise in Delhi. It was argued that in view of this, Delhi Courts would have jurisdiction under Section 20(c) of the CPC.The Court held: Looking at the entire plaint, it only seems that the plaintiff had filed this suit at Delhi only as a device of harassment calculated to force the defendant to come to Delhi, engage a Counsel at enormous expense and contest litigation. The plaintiff, who was resident of USA could have easily filed this suit at Courts at Bombay/Maharashtra and pursued the matter. Filing of suit in Delhi on the basis of vague allegations that the goods of defendants were being sold clandestinely throughout the country including Delhi makes no sense. No cause of action can be said to have arisen in Delhi. Such allegations of clandestine sale can be made against any person without any foundation and the plaintiff even during trial can always escape giving proof of such clandestine sale saying that he has stated in the plaint that the sale was clandestine and no bills were being issued. The Court cannot be used as a tool to put such a burden on the defendant that the defendant is unable to even defend the suit. The plaintiff cannot be given absolute liberty to choose the place of suing a defendant out of entire country on the basis of unfounded and vague allegations. In such a case CPC provisions regarding jurisdiction stand rendered useless. Now, it might well be possible to hold that the Court had concluded that no part of the cause of action arose in Delhi. There are at least three reasons, however, for believing that the Court was in fact applying the doctrine of forum non conveniens. First, on the averments made in the plaint, it was not possible to say that no part of the cause of action arose in Delhi. The veracity of those averments cannot be gone into for the purposes of determining jurisdiction. Secondly, if indeed no part of the cause of action arose in Delhi, there was no reason to make observations concerning the hardship and burden faced by the defendant. Thirdly, in its reasoning, the Court referred to a Supreme Court decision Kusum Ingots v. Union of India59 holding that a Court is not bound to entertain a plaint if a small part of the cause of action arose within its jurisdiction. This indicates that the Court was holding that even though a part of the cause of action arose in Delhi, the Delhi Courts were not the most appropriate forum for adjudication. The judgment in Kusum Ingots itself appears to accept the forum non conveniens principle. That case was concerned not with private law disputes but with the public law question regarding the appropriate High Court in cases of writ jurisdiction under Article 226 of the
59

AIR 1994 Delhi 126

Constitution. Nonetheless, it was held that the CPC principles of jurisdiction were equally applicable to writ proceedings. The Supreme Court went on to say that indisputably even if a small fraction of the cause of action arises within the jurisdiction of a particular Court, that Court shall have jurisdiction in the matter. Yet, on appropriate cases, the Court could refuse to exercise that jurisdiction on the ground of forum non conveniens. Thus, the Court recognised the distinction between the existence of jurisdiction and the exercise of jurisdiction. The principle of Kusum Ingots has been followed subsequently. In Jayaswals Neco v. Union of India,60 the decision was analysed in depth; and was held to be authority for the proposition that when a cause of action arises partly in one jurisdiction and partly in the other, it is ordinarily for the petitioner to choose his forum. Yet, in appropriate cases the Court concerned may refuse to hear the matter because of forum non conveniens. The Delhi High Court decision in St. Ives seems to now settle the issue that the doctrine would also apply outside writ jurisdiction to an ordinary civil suit between two private parties. Application in Other Countries: The doctrine of forum non conveniens has, to a greater or lesser extent, been adopted in several common law countries, for example, New Zealand,61 Hong Kong,62 Singapore63 and India.64 In 1990, in Australia, the High Court in the case of Voth v Manildra Flour Mills Pty Ltd.,65 propounded a new principle governing the stay of Australian proceedings in transnational cases. Henceforth, an Australian court would only a stay of its proceedings where the court considered itself a clearly inappropriate forum. In proposing this test, the High Court consciously departed from the principles established in England by the House of Lords in Spiliada. Briefly stated, this test requires that local proceedings be stayed where there exists a more appropriate court for trial. Although the High Court claimed in Voth that the difference between the clearly inappropriate and the more appropriate tests was slight, critics warned that the effect of the

60

Wp (C) 2177/2007] on 2/7/2007

61 62

McConnell Dowell Construction Ltd v Lloyds Syndicate 396 [1988] 2 N.Z. L.R. 257. The Adhigina Meranti [1988] 1 Lloyds Rep. 384 (H.K.C.A.). 63 Oriental Insurance Co. Ltd. V Bhavani Stores Pte. Ltd. [1998] 1 Sing. L.R. 253, C.A. 64 Airbus Industrie G.I.E. v Patel [1999] 1 A.C. 119. 65 (1990) 171 CLP 538

High Court decision may be to encourage Australian courts to exercise jurisdiction over matters which have very little connection with Australia. Conclusion: As we have seen the mechanistic rules of lis alibi pendens give priority to the court first seized without accepting the major degree of discretion offered by the theory of forum non conveniens. The rules of the latter doctrine permit the better establishment of the needs of justice by choosing the most appropriate forum in relation to different cases where there is of course the possibility of choice between more than one appropriate court. Some of the practical reasons why it is undoubtedly better to offer the defendant a tool as to resist to the choice of jurisdiction of the plaintiff has been well describe by David W. Robertson and his words bear repetition " First a defendant may be subjected to grave injustice by being sued in a court far from the defendant's domicile, from the situs of the events that gave rise to the dispute, or from the sources of the evidence necessary to resolve the dispute. Second, the absence of a check on a transnational plaintiffs' initial forum choices could cause certain courts to become overcrowded, with corresponding detriment to domestic litigants' need for speedy justice, to the resources of the country where the court sits, and arguably to the judges themselves. Third, when a court in Country X decides a case which is more intimately connected with Country Y, Country Y's public policies may be thwarted or its sovereignty offended". 66 It can be also useful to remark again that the doctrine of forum non conveniens did not originate in England and that English law adopted it quite recently for practical exigencies. This change has been welcomed in England by the major part of the judges and by many writers. For the same reason it could be considered an improvement under the civil law jurisdictions giving them a possibility to find a more flexible approach without destroying their exigency of certainty and predictability. For these reasons it is to be hoped that the new rules of article 22 of the draft of The Hague Convention will become the new standard international law in relation to the choice of jurisdiction in civil and commercial matters and that this will also lead to the introduction of a remarkable common law doctrine in civil law jurisdictions.

66

David W. Robertson Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103 L.Q.R. 398