Commercial Division Blog
Court Grants Forum Non Conveniens Motion
On February 28, 2019, Justice Ostrager of the New York County Commercial Division issued a decision in Fernie v. Wincrest Capital Ltd., 2019 NY Slip Op. 30510(U), granting a forum non conveniens dismissal, explaining:
Ordinarily, nonresidents are permitted to enter New York courts to litigate their disputes as a matter of comity. However, the common-law doctrine of forum non conveniens permits a court to stay or dismiss such actions where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere. The burden rests upon the defendant challenging the forum to demonstrate relevant private or public interest factors which militate against accepting the litigation and the court, after considering and balancing the various competing factors, must determine in the exercise of its sound discretion whether to retain jurisdiction or not. Among the factors to be considered are the burden on the New York courts, the potential hardship to the defendant, and the unavailability of an alternative forum in which plaintiff may bring suit. The court may also consider that both parties to the action are nonresidents and that the transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction.
First, the potential hardship on the various Defendants weighs in favor of dismissal. The Directors are all long-time permanent residents of the Bahamas. FJC affirmed in a written affirmation accompanying the motion that travel to New York to defend this lawsuit would impose a personal hardship on him due to a serious medical condition for which he is currently being treated. Thus, there is potential hardship on the Wincrest Defendants in forcing them to litigate this action in New York.
Second, the Bahamas is an available alternative forum in which Plaintiff may bring suit. Plaintiff and the Directors are all domiciled in the Bahamas. Defendant Wincrest is a Bahamian corporation with its principal place of business in the Bahamas. The nexus of the alleged tortious conduct occurred in the Bahamas. Further, Defendants Press Management and HedgePort have expressly consented to be sued in the Bahamas. Thus, the availability of the Bahamas as an alternative forum favors dismissal.
Third, both Plaintiff and the main Defendants in this action are residents of the Bahamas. Five of the seven parties in the action are domiciled in the Bahamas. The claims against the Wincrest Defendants are undoubtedly at the center of this lawsuit, as opposed to the more nominal conspiracy and aiding and abetting causes of action levied against Press Management and HedgePort. Thus, the Bahamian residency of the majority of the parties weighs in favor of dismissal on forum non conveniens grounds.
Fourth, litigation in New York would impose at least a minor burden on the Court due to the applicability of Bahamian law. The applicability of foreign law is an important consideration in determining a forum non conveniens motion and weighs in favor of dismissal.
Finally, this is a case primarily between Bahamian parties involving a dispute over the internal affairs of a Bahamian corporation. This Court, in the interest of comity, defers to the Bahamian interest in resolving that country's own corporate governance issues. For these reasons, the Court grants Defendants' motions to dismiss for forum non conveniens.
(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. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org 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.