Forum non Conveniens

• Author: International Law Group
• Pages: 22-24

Page 22

Petitioner, Sinochem International Co., Ltd., a Chinese state-owned importer, entered into a contract with Triorient, a U.S. corporation not a party here. It provided that Sinochem would buy steel coils from Triorient, the latter to be paid under a letter of credit by producing a valid bill of lading. The bill would certify that Triorient had seen to the loading of the coils for shipment to China on or before April 30, 2003.

Triorient then subchartered a vessel owned by Respondent, Malaysia International Shipping Corporation, a Malaysian company, to transport the coils, and hired a stevedoring company to load the coils in Philadelphia. A bill of lading would trigger payment under the letter of credit.

At some point, Petitioner got the idea that Respondent had falsely backdated the bill of lading. It petitioned the Guangzhou Admiralty Court of China to preserve a maritime claim against Respondent and to arrest the vessel. The Chinese court had the ship arrested, and Petitioner timely filed a complaint in that tribunal. The Chinese admiralty court rejected Respondent's jurisdictional objections to Petitioner's suit and a Chinese appellate court affirmed that ruling.

Shortly after the Chinese admiralty court ordered the vessel's arrest, Respondent filed this U.S. action in the Eastern District of Pennsylvania. It claimed that Petitioner's preservation petition to the Chinese court contained misrepresentations, and asked for damages for losses sustained due to the ship's arrest.

Petitioner moved to dismiss on several grounds, including lack of subject-matter and personal jurisdiction and the doctrine of forum non conveniens. Under the latter, a federal district court may dismiss an action if it appears that a foreign court is the more appropriate and convenient forum for adjudicating the controversy.

The District Court determined (1) that it had subject-matter jurisdiction over the cause, (2) but that it lacked personal jurisdiction over Petitioner under Pennsylvania law (speculating that limited discovery might reveal that it could have personal jurisdiction under Fed. R. Civ. Proc. 4(k)(2)). Ultimately, it dismissed on forum non conveniens grounds, deciding that the Chinese courts could decide the case adequately and more conveniently.

On appeal, a Third Circuit panel reversed over one dissent. The majority agreed that there was subject-matter jurisdiction and that limited discovery was essential to resolve the question of personal...