Forum Non Conveniens

• Author: International Law Group

On January 17, 2005 Ingenium Technologies, Corp. (plaintiff) filed this action against McGraw-Hill Companies, Inc. (defendant) in the British Columbia Supreme Court. A month later, defendant filed a complaint against plaintiff in a New York federal court.

Plaintiff applied for a summary dismissal of the New York action on jurisdictional grounds. It also applied for a declaration that the British Columbia Supreme Court had jurisdiction over the dispute. The New York court denied plaintiff's motion for summary dismissal. The B. C. lower court then heard and granted the application for a declaration in respect of jurisdiction.

Plaintiff explained why it had gotten this declaration by pointing out that, while it accepted that the New York court would end up trying defendant's complaint, plaintiff preferred to seek the same relief through the B. C. action. In granting the declaration, the lower court judge ruled that B. C. has jurisdiction simpliciter [not challenged on appeal] and also was the forum conveniens proper to resolve the dispute.

Defendant appealed and the B. C. Court of Appeal, in a divided opinion, allowed the appeal. The agreement between plaintiff and defendant as to the latter's distribution and promotion of plaintiff's web-based software stated that the courts should interpret it under B. C. and Canadian law and should look upon it as a "B.C. contract." Substantially all of plaintiff's services under the contract took place in B. C., although the present site of the servers that customers used to access data is in New York.

The agreement was to expire at the end of the month, but the parties could not agree on which party had control of the relationship with customers who had bought and used the software.

"The lower court judge was correct in concluding that the existence of parallel proceedings did not trump all other factors in determining the more appropriate forum for the litigation of a dispute. Rather, it must be considered in accordance with the principle of comity. She concluded, rightly in my view, that the existence of parallel proceedings ... must be considered in accordance with the principle of comity and that there will necessarily be cases where parallel proceedings will not carry the day."

"But ... the lower court judge erred in...