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Posted: April 13, 2018

New York Not Inconvenient Forum Despite Dispute Having Much Stronger Connection to China

On April 5, 2018, the First Department issued a decision in Pacific Alliance Asia Opportunity Fund L.P. v. Kwok Ho Wan, 2018 NY Slip Op. 02415, holding that an action should not have been dismissed on forum non conveniens grounds despite its having a much stronger connection of China, explaining:

Defendant failed to meet the heavy burden of establishing that New York is an inconvenient forum and that there is no substantial nexus between New York and this action. It is true that the agreements at issue in this breach of contract action concern a Chinese real estate development project and that most (although not all) of them were negotiated and executed in Hong Kong or China. However, while defendant is a Chinese citizen, he has resided in New York for the past two years and is seeking asylum here. Moreover, although Hong Kong is a potential alternative forum, it is not a suitable or adequate alternative, because defendant cannot return there due to his pending asylum claim and fugitive status.

Defendant has not shown that it will be a hardship for him to litigate in New York. He lives here, has brought suit against others here, and has invited others to sue him here. The agreements at issue, which are written in English, are available here, and, although plaintiff is a foreign corporation, its employees are willing to travel here at no expense to defendant. While defendant alleges broadly that his former employees and relevant documents are located in Hong Kong or China, he has not identified any specific witnesses or documents that will be necessary. He does not purport to know the witnesses’ whereabouts with certainty, and he has not made any showing with respect to their materiality.

The fact that Hong Kong law governs the instant dispute, pursuant to the choice of law provisions in the agreements, is not dispositive, since our courts are frequently called upon to apply the laws of foreign jurisdictions, and there has been no showing that it is in dispute.

(Internal quotations and citations omitted).

Disputes regarding commercial contracts involving international parties end up being heard in New York courts. Even if the court has the power to assert jurisdiction of the parties, it can, under the forum non conveniens doctrine discussed above, dismiss the dispute so it can be heard in a forum that is more convenient for the parties. As this decision shows, however, the bar for dismissal on forum non conveniens grounds is a high one. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure whether New York is the appropriate forum in which a dispute should be heard.

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