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Forum Non conveniens-Which is the most suitable Forum?

Suppose A enters into a contract with B for supply of certain goods. A is a company incorporated in Mauritius and B is a company incorporated in India. B fails to make the payment on time and consequently A rescinds the contract. B files a suit in their home country against A.

A tries to resist the suit on the basis of forum non coneveniens. In such a case where both the forums have jurisdiction to decide the matter, where should the matter be decided? This paper aims to compare and analyse how the courts of United States, India and Australia have decided the motions on forum non conveniens in different situations.

It compares the factors that are taken into consideration while deciding whether a suit should be dismissed in favour of an alternate forum or not. It also discusses whether the rules of International comity are in line with the purpose of this doctrine or not. Broadly, this paper tries to answer which is the most suitable approach for deciding a motion of forum non conveniens.

Historical Origin
Forum non conveniens, a common law doctrine was introduced in Scotland. Before such a doctrine came into being, the principle of determining the appropriate venue of trial was widely contested. [1] Once a plaintiff was vested with the power of determining venue of the trial, the power started getting widely abused. [2]

While the power was being abused by the plaintiffs, the defendants started to file motions for changing the venue of the trial as it caused undue hardship and burden on them. This clearly meant that there was uncertainty as to which was an appropriate forum to file a suit from where adequate relief could be obtained.

The courts, as a consequence of this uncertainty, came up with the idea of Forum non competens which meant that the court lacked jurisdictional competence in cases where the court possessed the jurisdiction to try a case, but the trial seemed inconvenient.[3] Soon, when the courts recognized that convenience and expediency must also be taken into consideration and merely factoring Jurisdictional competence was not enough, the doctrine of Forum non conveniens came into being.[4]

Forum Non Conveniens in the United States of America

The Forum non conveniens doctrine gives discretionary powers to the US courts to dismiss a suit when there is a more appropriate and convenient forum. Prior to the publishing of a law review article, the phrase forum non conveniens was hardly in use in the United states judicial system.[5]

After the article was published, the doctrine started getting used in many United states federal court decisions by the Judges and counsels alike. Initially the doctrine of Forum non conveniens was used in Admiralty cases. [6] In most of these cases, the plaintiffs were non residents and initiated the suits while their ships were docked at the American ports. However, the supreme court in the case of Canadian Malting co. V Paterson Steamship held that:
Courts of equity and of law also occasionally decline, in the interest of justice, to exercise jurisdiction, where the suit is between aliens or non-residents, or where for kindred reasons the litigation can more appropriately be conducted in a foreign tribunal. [7] Also, in the case of Broderick V Rosner, the court said that the court may, in appropriate cases, apply the doctrine of forum non conveniens. [8]

Thus, it is evident from the early application of this doctrine that it was not only used in Admiralty cases where the plaintiffs were non residents of the United states but also between two resident parties and wherever it was appropriate to use it as the main objective was to meet the ends of justice.

The landmark judgement that is responsible for the foundation of this doctrine in the United States is Gulf Oil Corporation V. Gilbert.[9] This was a case in which an action was brought in the federal court of New York for a tort committed in Lynchburg, Virginia. A suit was filed by the plaintiff whose warehouse was destroyed as result of defendant's negligence in delivering gasoline. The plaintiff was a resident of Virginia and the defendant was doing business in Virginia and New York.

The Plaintiff, instead of filling the suit in Virginia where most of the witnesses lived and the place where the tort occurred, filed the suit in New York, thinking that the New York Jury would award better amount of damages than a Virginia Jury.

The Supreme court upheld the decision of the district court that Virginia is a more appropriate forum and listed two set of factors that must be balanced when ruling on a such a motion.[10] The first set consists of private factors like Access to evidence, transportation costs and availability of subpoenas in securing witnesses and similar problems of expense and fairness.[11]

The second set consists of factors that pertain to Public Interests. These include questions like do the parties abdicate some rules of the court by filling a suit there or whether the dockets of that forum are being unnecessarily burdened which is causing hardship to the local plaintiffs?
Essentially what the court in Gulf Oil Corporation V. Gilbert[12] tried to do is balance the Public and Private factors when deciding a motion based on Forum non Conveniens. Subsequently in Koster V. Lumbermens, the US court held that in applying the doctrine of forum non conveniens, the ultimate inquiry is where trial will serve the convenience of the parties and meet the ends of justice.[13]

However, post the Gilbert decision, the application of this doctrine has been narrowed down by the legislative action of enacting the 1404(a) of Judicial code[14]. This code requires the case to be transferred and not dismissed when the alterative forum is another federal court. This meant removing the application of forum non conveniens in domestic matters.

In another landmark decision of Piper Aircraft Co. V. Reyno[15], the United States Supreme Court tried to address two questions which asks the relevance of the change in the substantive law and the weight to be given to plaintiff's residence.[16] The plaintiffs filed a suit in America claiming damages out of an air-crash that took place in Scotland, killing all the Scottish passengers. The district court dismissed the suit in favour of the Scottish forum.

The Supreme court held that a foreign plaintiff's choice of forum deserves less deference because foreign plaintiff's choice is less likely to be convenient for the defendant.[17] So, it upheld the decision of the district court and sent the case back to the Scottish forum.

Indian Application of Forum Non Conveniens

The concept of forum non conveniens as explained by the Indian courts is the discretionary power of the court to not exercise jurisdiction in a matter because there exists a more appropriate forum to try the matter and conversely, an anti-suit injunction is granted by the court to stop the parties from instituting a suit in another competent court.[18] But the principle stands that in order for the court to apply the principle of Forum non-conveniens, the other more appropriate forum should be a court of competent Jurisdiction. [19]

This doctrine is not used in domestic matters as the subsequent suit is barred by section 10 of Civil procedure code but the principles thereof can be invoked by the High courts under its writ jurisdiction as an exercise of their discretionary power.

This principle was clarified by the Delhi High Court when the defendant pleaded that the forum in Delhi is an inappropriate forum and the suit shall be better decided in a more appropriate forum which was the Bombay High Court.

The learned single judge sent the matter back to the Bombay HC on the principles of Forum non conveniens under section 151 of the code. This position was later reviewed by the same court in Horlicks V. Heinz[20] and it was held that:
The principle of forum non conveniens applies to foreign forums and Indian courts can apply the said principle vis--vis foreign forums or while exercising discretionary jurisdiction under Article 226 of the Constitution of India.[21]

The court also held that the said doctrine does not apply to civil suits in India which are governed by the Civil Procedure code.

In the Landmark case of Modi Entertainment V. WSG Cricket[22], the Supreme court of India has laid down the principles for this doctrine which are in use till date. Although the matter pertained to grant of an anti-suit injunction against the party initiating an action outside the country of Natural Jurisdiction, the same principles apply when a court in India is deciding a motion on Forum non conveniens.[23]

The parties had a contract under which the party in India obtained a license to broadcast the ICC knockout tournament that was being organised in Kenya. Soon after the commencement of the telecast, the broadcaster noticed that the satellite transmission had a spill-over effect to the Middle East and threatened the party in India that they might rescind the contract.

The Indian party filed a suit in India fearing loss of advertisement revenue. Consequently, as per the non-exclusive jurisdiction clause in the contract, the broadcaster brought an action in Queens bench, England. The Indian party asked the court in India to grant an anti-suit injunction.

The court while denying the relief asked for by the party, laid down certain conditions to be fulfilled when granting an anti-suit injunction

  1. The defendant against whom an anti-suit injunction is sought, is amenable to the personal jurisdiction of the court.
     
  2. If injunction is declined, ends of justice will be defeated and injustice will be perpetuated. The principle of comity must be borne in mind which stipulates that sovereignty of a court from which continuance of a proceeding is sought to be restrained to decide the matter must be respected.
     
  3. In a case where more than one forum is available, the court in exercise of it's discretion to grant an anti-suit injunction will examine as to which is the more appropriate forum to decide the matter giving weightage to convenience of the parties and whether the present forum will be oppressive and vexatious for the defendant

The above-mentioned principles were also applied by the Supreme Court in Krishna Nigam V. Harish Nigam while deciding Jurisdiction and it held that this doctrine can also be applied in matrimonial proceedings. It noticed that under the said doctrine, the court exercises it's inherent jurisdiction to stay the proceedings when it is not considered to be a convenient forum and there is a more convenient and appropriate forum that should decide the matter in the interests of all parties and meeting the ends of justice. [24]

This doctrine was also invoked in the case of Anuradha V. Divyanshu Gautam in which the court, while denying to grant an anti-suit injunction said:
While deciding appropriateness of forum, It is necessary to see where justice can be done at substantially less inconvenience and expense and where the action had most real and substantial connection such as availability of witnesses and the law governing the relevant transaction and the places where the parties respectively reside or carry on business. And unless the balance is strongly in favour of party seeking injunction, the choice of forum of opponent party should rarely be disturbed.[25]

Even in the case of India Tv Independent V. India Broadcast Live Inc. it was stated that for determining whether a more appropriate forum exists, factors such as convenience of parties, expenses involved and law governing the relevant transaction need to be looked into.[26]

The Australian Approach
The landmark Judgement of the Australian High court which laid down the test to apply this doctrine in the courts of Australia is Oceanic Sunline Special Shipping Co. Inc. V. Fay.[27] The facts of the case pertain to a contract between Fay (plaintiff) and Oceanic Sunshine Shipping Co. (defendant). The plaintiff booked a cruise of the Greek islands on a ship owned by the defendant. Fay could not read the terms and conditions of the tickets as he didn't have them for inspection.

One of the clauses in the ticket mentioned that any action against the defendant must be brought in the court of Athens and Jurisdiction of any other court was excluded. Fay suffered injuries on the voyage and then sued the defendant in the New South Wales Supreme Court.

While the defendant argued that the Australian court is not the appropriate forum to decide the matter and pleaded for a Forum non conveniens dismissal, Dean J. suggested that the test to be applied is the Clearly inappropriate forum test which follows from Maritime Insurance Co.[28]

What is to be proved is not that whether there is a more appropriate forum to decide the matter that has been brought in front of the court but that the local forum is a clearly inappropriate one. [29] Dean J. rightly held that just because there is a more suitable forum to decide the matter doesn't mean that the local jurisdiction is a clearly inappropriate one. [30]

But the position of this doctrine remained unclear and the underlying principles of this doctrine was clarified in Voth V. Manildra Flour mills Pvt Ltd.[31] According to the court, the clearly inappropriate forum test consists of two stages.

Firstly, defendant will have to give reasons as to why the local forum is a clearly inappropriate one. While deciding this, the majority accepted the discussion in Spilada[32] that:
the factors that will be taken into consideration are factors affecting expense, law governing the relevant transaction and the places where the parties reside or carry on business. [33]

Secondly, the plaintiff has to show the advantages of continuing the proceeding in the local forum.

Factors such as damages, costs and limitation periods of the local forum is to be taken into account. This clearly means that in order for the court to consider these factors, it has to compare them with factors of the courts abroad.

The principles settled in Voth[34] are to be applied in the Australian courts when the issue of forum non conveniens arises. The above-mentioned principles were recently applied in the case of CMA CGM SA V. The Ship Chou Shan[35] wherein the court applied the clearly inappropriate forum test and stayed the proceeding in federal court.

The Discussion
The test laid down in Gilbert and Piper aircraft requires weighing the Private and Public interests along with considering whether the trial will serve the convenience of the parties and meet the ends of justice.

The Indian doctrine of Forum non convenience lays down a similar test. It sees whether the defendant is amenable to the personal jurisdiction of the court and if jurisdiction is denied, whether it will meet the ends of justice. After weighing all the factors, whichever is the most suitable forum, it dismisses the case in favour of that forum. The Australian doctrine while considering the same factors, takes a rather different approach in concluding whether the doctrine must be applied or not.

Factors such as Expense of the litigation, defendant's place of carrying on business, and the relevant law of that transaction are taken into account. The plaintiff has to discharge the onus of showing the advantages of continuing the suit in the same forum. The Australian courts also weigh the factors of the alternate forum such as limitation period, the damages that might be offered, and the cost of litigation.

While the courts in US might dismiss a case in favour of an alternate forum if there is a more suitable forum which is available and considering other factors like transportation cost of witnesses, evidence, subject matter of the suit, meeting the ends of justice, the courts in India take a similar approach and sum it up by considering whether the plaintiff has instituted the suit in order to cause vexation or oppression to the defendant.

In such cases, if the alternate forum meets the ends of justice, then the courts will readily provide forum non conveniens dismissal, but it will do so only if it thinks it is necessary to do so. Australian courts will only dismiss a case in favour of an alternate forum if the forum where the suit has been instituted is a clearly inappropriate one.

Like US and India, it does not consider whether there exists a more suitable forum where the case can be decided. Even if the witnesses are present in a different forum and the subject matter of the suit lies elsewhere, it will still not dismiss a suit if the local forum has some connection with the determination of the case. It places a onerous threshold on the party applying for a stay.

Private factors such as access to evidence, cost and transportation of witnesses and subject matter of the suit might be the same in case of US and India. It is the Public interest factors on the basis of which a distinction can be made.

The United states has a legal environment which is favourable to non-residents as compared to forums in other countries because of various factors. These factors include better amount of compensation, favourability for plaintiffs, the American rule according to which a plaintiff who has lost need not pay the defendant's attorney.[36] On the other hand, it is quite evident from the 188th Law commission report that most cases do not get dismissed in favour of the Indian forum as there is a general assumption that it can take as long as 25 years for disposal a case. [37]

So, in general foreign plaintiffs do not prefer to institute suits in India as dismissal of a case can take years and the amount of compensation/damages awarded is below the reasonable amount. The Australian courts on the other hand witness foreign plaintiffs instituting suits in order to get the adequate relief even if the subject matter of the suit is outside Australia.[38] They do so because if an Australian national/resident has done any wrong, then the Australian courts deem it to be liability of that national/resident or company under the country's local law.[39]

As the situation in US stands, the US Supreme court has stated in Sinochem[40] that the plaintiff need not be amenable to the jurisdiction of the court in which the case has been instituted in order to be granted a Forum non conveniens dismissal. The US supreme court seem to have taken a departure from the principles of Gilbert which mandated that the forum in which case is instituted must have jurisdiction of the matter.

In India, the Delhi HC as recently as in 2019 has reiterated the decision of the Supreme Court[41] that in order for the court to grant a forum non conveniens dismissal, the parties must be amenable to the jurisdiction of the forum where the suit is instituted.[42] Since the basic requirement of this doctrine is that two forums must be competent is exercising jurisdiction, the courts in US seem to have taken a departure from that principle.

However, it cannot be denied that by dismissing cases in favour of some other forum in a foreign country, the United States is condoning the wrongful harm done by the MNC's in other nations whose nationals later ask for damages as a consequence of the injuries suffered from these activities.[43]

These Multinational giants, knowing that they won't be liable under the laws of their home state, set up high-risk industries which sometimes cause a lot of damage to the nationals of those states. One of the prime examples of this will be the Union Carbide case[44] in which most of the injured plaintiffs filed a suit against the Union Carbide Corporation Limited, the parent company of Union carbide India limited which caused injuries to the habitants as well as the environment following a leak of methyl isocyanate from their plant in Bhopal, India.

The suit was filed in southern district of New York but after weighing in the factors of the doctrine, the court dismissed the suit in favour of Indian Courts stating that the subject matter of the Suit lies in India and most of the witnesses were also in India. This is how a United States incorporated MNC escaped the law of its home country. Such is not the case in India and Australia. The Indian courts have also from time to time dismissed the plea of anti-suit injunction, saying that if granting the anti-suit injunction is causing vexation or oppression to the defendant, then it will not do so and try to comply with the rules of International comity[45]

The same principle from the Supreme court case has been reiterated and all the factors are ultimately weighed in so the ends of justice can be met. Amongst these forums, the Australian forum is the most suitable one as the courts do not dismiss a suit unless the local forum is a clearly inappropriate one. The Australian courts have adopted an approach which is distinct from the one used in United States courts and the Indian courts.

It's application of Forum non conveniens has provoked criticism from certain scholars who have outrightly said that the western model of Forum non conveniens is the most appropriate one [46] These legal scholars and advocates of International comity have criticized the manner in which Australian Courts have declined to stay a proceeding instituted under its jurisdiction and said that the Australian courts have failed to comply with the practices of International commercial standards.

As evident from the decisions in Oceanic[47] and Voth[48] that the court made a departure from the most suitable forum and provided the plaintiffs with adequate relief when it was necessary. The Australian courts noticed how the doctrine was being used ironically in United States to promote chauvinistic outcomes.

If the Unites States intended on following the rules of comity, then it should have taken cognizance of cases like Piper[49] and Bhopal[50] and ensured that the local MNC's don't have the chance of escaping from liability of US courts.[51] It will not be wrong to say that the factors taken into account by US like where are the witnesses, evidences, place where the event happened have been adopted by the US courts so that MNC's can escape from liability of US law.[52]

Conclusion
As ironic as it might sound, it can rightly be said that the Australian approach of applying the doctrine of Forum non Conveniens is the Most Suitable approach. The suitability of this approach is with respect to the foreign plaintiffs who are trying to get the adequate relief or the local defendants who try to escape the liability of their local courts. The rationale with the plaintiffs choice of forum being that even if a court has one reason to exercise jurisdiction in a case, then denying the request if forum non conveniens will meet the ends of justice as a court's power to exercise jurisdiction should always be upheld.

As Oliver Wendell Holmes rightly stated in his essay The Path of law, The Social end which is aimed at by a rule of law is obscured and only partially attained in consequence of the fact that the rule owes its form to a gradual historical development, instead of being reshaped as a whole, with conscious articulate reference to the end in view.[53]

Therefore, it is high time the United States of America and Indian does not lay down a hard and fast rule to give effect to the principles of comity. The doctrine as it stands should be applied on a case to case basis and sovereignty of a court, even if there exists some connection with the subject matter or the parties to the suit, should always be upheld. The ultimate factor should be to ensure that ends of Justice is met.

End-Notes:

  1. John Bies Conditioning ForumNonConveniens 2 CLR 489 493 (2000)
  2. Ibid
  3. Ibid
  4. Christopher Whytock ForumNonConveniens and EnforcementofForeignJudgements (2011)
  5. Paxton Blair The Doctrine of ForumNonConveniens in Anglo-AmericanLaw 1 CLR 1 (1929)
  6. John Bies Conditioning ForumNonConveniens 2 489 496 (2000)
  7. 285 US 413 (2932)
  8. 294 US 629 (1935)
  9. 330 US 501 (1947)
  10. Ibid
  11. Ibid
  12. Ibid
  13. 330 US 518 (1947
  14. 28 US 1404
  15. 454 US 235 (1981
  16. John Bies Conditioning ForumNonConveniens 2 CLR 489 (2000)
  17. ibid
  18. Modi Entertainment Network V. WSG Cricket (2003) 4 SCC 341 (India)
  19. Glaxosmithkline Consumer Healthcare Limited V. Heinz Pvt Ltd. MANU/DE/0011/2009 (India)
  20. (2009) SCC OnLine Del 9 (India)
  21. Article 226 Constitution of India, 1950
  22. Ibid at 18
  23. Krishna Veni Nigam V. Harish Nigam (2017) 4 SCC 150 (India)
  24. Ibid at 23
  25. (2016) SDC 564 (India)
  26. 2007 SCC OnLine Del 960 (India)
  27. (1988) 165 CLR 197 (Austl.)
  28. Maritime Insurance Co. Ltd. V. Geelong Harbour Trust Commissioners (1908) 6 CLR 194 (Austl.)
  29. Ibid at 27
  30. Ibid at 27
  31. Voth V. Manildra flours Mills Pty. Ltd. (1990) 171 CLR 538 (Austl.)
  32. Spilada Maritime Corp. V. Cansulex Ltd. (1987) A.C. 460 (H.L.)
  33. Ibid at 32
  34. Ibid at 31
  35. (2014) FCA 74 (Austl.)
  36. John Bies Conditioning ForumNonConveniens 2 CLR 489 (2000)
  37. Law Commission of India Report no. 188 (2003)
  38. Peter Prince Bhopal, Bougainville and OK Tedi: Why Australia's Forum Non Conveniens Approach Is Better 3 TICLQ 573 (1998)
  39. Ibid at 37
  40. Sinochem International Co. V. Malaysia International Shipping Corp. 549 US 422 (2007)
  41. Ibid at 18
  42. Ibid at 19
  43. Jacqueline Duval-Major One-way Ticket Home: The Federal Doctrine of Forum Non Conveniens and the International Plaintiff 77 CLR 650 673 (1992)
  44. In Re: Union Carbide Corp. Gas Plant Disaster 634 F. Supp. 842 (S.D.N.Y. 1986)
  45. India bulls Real Estate Ltd. v Geeta Anand MANU/DE/0445/2019 (India)
  46. Ibid at 37
  47. Ibid at 27
  48. Ibid at 31
  49. Ibid at 15
  50. Ibid at 43
  51. Ibid at 37
  52. Ibid at 37
  53. Oliver Wendell Holmes Jr. The Path of Law 10 HLR 457 (1897)

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