Forum non conveniens

Scholars and jurists seem to find a Scottish origin prior to the first American use of the concept.[6][7][8][9] Some writers see the doctrine of FNC as having developed from an earlier doctrine of forum non competens ("non-competent forum"). Many early cases in the U.S. and Scotland involving FNC were cases under admiralty law. FNC thus may ultimately have a civil law origin, as has been asserted by several writers, since admiralty law is based in civil law concepts.

The doctrine of FNC originated in the United States in Willendson v. Forsoket [29 Fed Cas 1283 (DC Pa 1801)] (No 17,682) where a federal district court in Pennsylvania declined to exercise jurisdiction over a Danish sea captain who was being sued for back wages by a Danish seaman, stating that "[i]f any differences should hereafter arise, it must be settled by a Danish tribunal." In Scotland, the concept is first recorded in MacMaster v. MacMaster (Judgment of 7 June 1833, Sess, Scot 11 Sess Cas, First Series 685.)

The doctrine has limited application in most civil law jurisdictions which prefer lis alibi pendens, although the principle behind FNC is acknowledged. As a member of the European Union, the United Kingdom signed the Brussels Convention. The Civil Jurisdiction and Judgments Act (1982) as amended by the Civil Jurisdiction and Judgments Act (1991) states:

Nothing in this Act shall prevent any court in the UK from staying, sisting [staying or stopping a process, or summoning a party[10]], striking out or dismissing any proceedings before it on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 1968 [Brussels] Convention or, as the case may be, the Lugano Convention.

The case of Owusu v Jackson and Others[11] before the European Court of Justice, was concerned with the relationship between Article 2 of the Brussels Convention and the scope of FNC within the European Community. In Owusu, the English Court of Appeal asked the ECJ whether it could stay a matter brought to it under Article 2 Brussels Convention pursuant to the English FNC rules. The Court held that the Brussels Convention was a mandatory set of rules designed to harmonise and so produce a predictable system throughout the EU. If states were able to derogate from the Convention using their domestic rules of civil procedure, this would deny a uniform result to proceedings based on forum selection. Hence, at 46. the ECJ held:

the Brussels Convention precludes a court of a Contracting State from declining the jurisdiction conferred on it by Article 2 of that convention on the ground that a court of a non-Contracting State would be a more appropriate forum for the trial of the action even if the jurisdiction of no other Contracting State is in issue or the proceedings have no connecting factors to any other Contracting State.[12]

However, some UK commentators argue that the FNC rules may still apply to cases where the other proceedings are not in a Member state but this remains uncertain. What is certain is that a Scottish Court may sist its proceedings in favour of the Courts of England or Northern Ireland on the ground of FNC, since this is settling intra-UK jurisdiction.[13]

In the jurisdictions where the FNC rule survives, a court will usually dismiss a case when the judge determines that the dispute would be better adjudicated in a different forum. Courts have been split in their applications of the rule. In Oceanic Sun Line Special Shipping Co v Fay (1988) 165 CLR 197 and Voth v Manildra Flour Mills (1990) 171 CLR 538 the High Court of Australia refused to adopt the "most suitable forum" approach and instead devised its own "clearly inappropriate forum" test. Nevertheless, the Australian courts balanced the foreign and local factors, and a dismissal would only be granted if the defendant could show that he was "oppressed" or "harassed" by the plaintiff's choice of Australia for legal action. This retained the rationale of the traditional doctrine, making it impossible for Australian defendants to obtain a dismissal from their own courts on FNC grounds. In Regie National des Usines Renault SA v Zhang (2002) 210 CLR 491, the High Court affirmed the "clearly inappropriate forum" test as Australian law, while stating that even where the law of a foreign country had to be applied to decide a case, Australia would not be a "clearly inappropriate" forum for hearing the matter.[14]

The doctrine of FNC in Canada was considered in Amchem Products Inc. v. British Columbia Worker's Compensation Board, [1993] 1 S.C.R. 897. The Court held that the test for striking out a claim for FNC is where "there is another forum that is clearly more appropriate than the domestic forum." If the forums are both found to be equally convenient, the domestic forum will always win out.

Convenience is weighed, using a multi-factored test that includes elements such as: the connection between the plaintiff's claim and the forum, the connection between the defendant and the forum, unfairness to the defendant by choosing the forum, unfairness to the plaintiff in not choosing the forum, involvement of other parties to the suit (i.e. location of witnesses), and issues of comity such as reciprocity and standard of adjudication.

The Supreme Court has underlined that FNC inquiries are similar to but distinct from the Real and Substantial connection" test used in challenges to jurisdiction. The most important difference is that applying FNC is a discretionary choice between two forums, each of which could legally hear the issue.

The law of the province of Quebec, Canada is slightly different. The Quebec Civil Code 1994, at art. 3135 c.c.q., provides:

Even though a Quebec authority has jurisdiction to hear a dispute, it may exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another country are in a better position to decide.

The practical effects are identical to any other jurisdiction but the wording used by the code is different. For decisions applying art. 3135 c.c.q., see H.L. Boulton & Co. S.C.C.A. v. Banque Royale du Canada (1995) R.J.Q. 213 (Quebec. Supr. Ct.); Lamborghini (Canada) Inc. v. Automobili Lamborghini S.P.A. (1997) R.J.Q. 58 (Quebec. C.A.); Spar Aerospace v. American Mobile Satellite (2002) 4 S.C.R. 205, and Grecon Dimter Inc. v. J.R. Normand Inc. (2004) R.J.Q. 88 (Quebec. C.A.)

The defendant may move to dismiss an action on the ground of FNC. Invoking this doctrine usually means that the plaintiff properly invoked the jurisdiction of the court, but it is inconvenient for the court and the defendant to have a trial in the original jurisdiction. The court must balance convenience against the plaintiff's choice of forum. In other words, if the plaintiff's 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 plaintiff's choice of forum should not be disturbed.

Generally, a corporation sued in the jurisdiction of its headquarters is not entitled to seek an FNC 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 refile the action in the jurisdiction of the corporation's headquarters.

In deciding whether to grant the motion, the court considers:

• The location of potential witnesses. The defendant must make a full and candid showing, naming the potential witnesses for the defense, specifying their location, specifying what their testimony may be and how crucial it is for the defense, 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 who is in charge of the records; address necessity, language, and translation problems; address the volume of such records; address 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. 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 forum's 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. However, sometimes the court chosen by the plaintiff may be logistically or administratively unfit or ill‐equipped 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 favor 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.

Additional factors include:

• 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 plaintiff's choice of forum. See 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). A defendant must show compelling evidence in order to disturb the choice of forum. The burden of proof is on the defendant: Strategic Value Master Fund, Ltd. v. Cargill Fin. Serv. Corp., 421 F.2d 741, 754 (S.D.N.Y. 2006). The court must also consider the defendant's vast resources compared with the plaintiff's limited resources as an aggrieved individual: See Wiwa at 107: “defendants have not demonstrated that these costs [of shipping documents and witnesses] are excessively burdensome, especially in view of defendant’s 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”.

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. Bigio v. Coca-Cola Company, 448 F.3d 176 (2d Cir. 2006), certiorari to Sup. Ct. denied. In that case, the plaintiffs were Canadians and non‐residents of New York. The court denied Coca-Cola's 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”.