Commercial Litigation and Arbitration

More On Forum Non Conveniens and Sinochem

As discussed in the March 5 blog, the Supreme Court recently held in Sinochem Int’l Co. v. Malaysia Int’l Shipping Co., --- U.S. ---, 127 S.Ct. 1184 (2007), that a district court may dismiss a case on forum non conveniens grounds before addressing and resolving ‛jurisdictional issues.“ By ‛jurisdictional issues,“ the Court meant both personal jurisdiction and subject matter jurisdiction(even though the District Court and the Court of Appeals had concluded that Federal subject matter jurisdiction existed in the case, calling into question the necessity of addressing both ‛jurisdictional issues“ in the Supreme Court’s opinion).

The Sinochem opinion highlights, but does not resolve, two important issues:

Conditional dismissals. Courts often condition a forum non conveniens dismissal on the waiver of jurisdictional and limitations defenses in the foreign forum. In Sinochem, the Supreme Court raised, but did not resolve, the question whether such conditional dismissals are appropriately issued by a court that has not resolved its own subject matter jurisdiction and that may not have personal jurisdiction over the defendant. See id. at 1193-94.

Decisions that ‛brush“ with the merits. The Sinochem opinion recognized that forum non conveniens decisions can, and often do, ‛brush“ with merits issues. See id. (‛Of course a court may need to identify the claims presented and the evidence relevant to adjudicating those issues to intelligently rule on a forum non conveniens motion,“ citing examples of other threshold issues that ‛brush with factual and legal issues of the underlying dispute“). This begs the question: if a Federal court’s subject matter jurisdiction was in question, of if the court may not have had personal jurisdiction over the defendant, what preclusive or persuasive force should the court’s rulings that ‛brush“ with the merits have in the foreign forum? Even after dismissal, the foreign forum may need to inquire into and perhaps decide whether the Federal court in fact had personal or subject matter jurisdiction in answering this question. This could at least conceivably lead to the odd circumstance where a foreign court is called upon to resolve thorny U.S. Federal jurisdictional issues, like those at issue in Sinochem itself, when the U.S. court declined to do so (perhaps even in cases where the Federal court addressed forum non conveniens first precisely because of the complexity of the jurisdictional issue, a practice that Sinochem specifically endorsed, see id. at 1194).

Doug Pepe

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