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Forum Non Conveniens
Table of Authorities
EU LEGISLATION
Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters
CONVENTIONS
Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters, Brussels 1968
Lugano Conventions, Lugano 1988
The Hague Proposal of Convention on International Jurisdiction and Foreign Judgements
in Civil and Commercial Matters
CASES
Connelly v RTZ Corp. plc [1998] A.C. 854
Continental Bank N.A. v Aeokos Cia Naviera SA [1994] 1 W.L.R. 588
Drouot Assurances SA v Consolidated Metallurgical Indistries [1998] E.C.R. I-3057
Case c-351/96
Gubisch Maschinenfabrik AG v Palombo [1987] E.C.R. 4861 Case 144/86
Harrods Ltd v Harrods (Buenos Aires) Ltd (No.2) [1992] Ch. 72
Jayaswals Neco v. Union of India, Wp (C) 2177/2007] on 2/7/2007
Kusum Ingots v. Union of India AIR 1994 Delhi 126
Logan v. bank of Scotland [1906] 1 K.B. 141 (C.A.)
MacShannon v Rockware Glass Ltd [1987] A.C. 795
Mengatti c. Soc. Metallurgica Nava Stefano e Giuseppina Clunet 1989, 96 Cour d'Appel
Paris, 17 November 1987
Spiliada Maritime Corp. v Cansulex Ltd [1987] A.C. 460
The Abidin Daver [1984] A.C. 398
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The Atlantic Star [1974] A.C. 436
The Jalakrishna [1983] 2 Lloyd's Rep. 628
The Tatry [1994] E.C.R. I-5439 Case c-406/92
Turner v Grovit [1999] 3 W.L.R. 794
Voth v Manildra Flour Mills Pty Ltd (1991) 171 C.L.R. 538
Zelger v Salintrini (No. 2) [1984] E.C.R. 2397 Case 129/83
BOOKS
KROPHOLLER J.K., Handbuch des Internationalen Zilverfahrensrechst (Tubingen
1982)
MCCLEAN David, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000)
SCHLOSSER P., Praxis des internationalen Privat- und Verfhrensrecht (Munich 1983)
SCHRODER J., Internazionale Zustandigkeit (Opladen 1971)
ARTICLES
FAWCETT J., Trial in England or Abroad: The Underlying Policy Considerations (1989)
) O.J.L.S. 205
KENNET Wendy, Forum non conveniens in Europe [1995] C.L.J. 552
LAGARDE P., Le principe de proximit dans le droit international priv contemporain,
Hague Recueil 1986 I 11
ROBERTSON David W., Forum non conveniens in America and England: 'A rather
fantastic fiction' (1987) 103 L.Q.R. 398
RUBINO-SAMMARTANO M., Il giudice nazionale di fronte alla legge straniera, RDIPP
1991, 315
VERHEUL J.P., The forum (non) conveniens in English and Dutch Law and under some
international conventions (1986) 35 I.C.L.Q. 413
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Introduction
Transnational transactions dabbling with more than one body of law, and more than one
system of courts, entail a plethora of legal risks that affect the desirability of commercial
cooperation. This lacuna has been successfully tended to, by Arbitration, which remains a
neutral, confidential and speedy dispute resolution mechanism. Countries world over have
entered the ambit of two conventions- the UN Convention on the Recognition and Enforcement
of Arbitral Awards, (New York Convention), 1958, and the Geneva Convention, allowing an
easier enforcement of international arbitral awards.
The doctrine of forum non conveniens (FNC) is known to be the doctrine which allows
a court to divest itself of jurisdiction if, for the convenience of the litigants and the witnesses, it
appears that the action should proceed in another forum in which the action might also have been
properly brought in the first place.1 Basically, because the FNC doctrine allows a court that has
jurisdiction over the parties to exercise its discretion not to enforce that jurisdiction, it is implied
that the application of the FNC doctrine presumes that the forum court exercising this discretion
has first completed the jurisdictional analysis in obtaining proper jurisdiction. The labeling of the
doctrine as non conveniens was to distinguish cases involving judicial discretion of the court
from cases where the court was bound to dismiss.
In addition, the FNC doctrine was said to be introduced to distinguish discretionary
authority from the plea of forum non competens where, unlike forum non conveniens, the issue is
about power or jurisdiction rather than discretion.2 The forum non conveniens doctrine could
also be referred to as a negative doctrine, in the sense that it is invoked to decline jurisdiction, as
opposed to the positive doctrine of forum conveniens where a court is invoking jurisdiction
because it considers itself an appropriate forum.3 The forum non conveniens doctrine today
has been adopted mostly by common law countries.4 This is probably because the doctrine is
1 BLACKS LAW DICTIONARY 680 (8th ed. 2004).
2 Robert Braucher, The Inconvenient Federal Forum, 60 HARV. L. REV. 908, 909 (1947); WARREN
FREEDMAN, FOREIGN PLAINTIFFS IN PRODUCTS LIABILITY ACTIONS THE DEFENSE OF FORUM NON CONVENIENS 2 (Quorum Books 1988). 3 J.J. FAWCETT, DECLINING JURISDICTION IN PRIVATE INTERNATIONAL LAW 6
(Clarendon Press 1995). 4 See John Fitzpatrick, The Lugano Convention and Western European Integration: A Comparative Analysis of
Jurisdiction and Judgments in Europe and the United States, 8 CONN. J. INTL L. 695, 721 (1993); FAWCETT,
-
rooted completely in common law court decisions, without any evidence of its trace in the
Roman law or in continental civil practice, despite its Latin name.5 As such, in major civil law
countries, such as those in continental Europe where the Brussels and Lugano Conventions on
Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters are in place, the
doctrine is not permitted. Instead, todays courts in those countries cannot decline jurisdiction
based on considerations of convenience and must assume jurisdiction as a matter of law when
the applicable jurisdictional rules have found jurisdiction.6
Historical Background:
The origin of the FNC doctrine has been described as obscure and murky.7 The doctrine
of forum non conveniens originated in Scotland in the nineteenth century but largely developed
in United States of America. In America a court, in order to stay an action, must take into
account both the private interest of parties and the public interest of the forum State.8 In England,
the idea of forum non conveniens was largely limited until 19739 when the House of Lords
changed radically its position in The Atlantic Star.10
The case concerned two vessels from
Holland that had a collision in Belgian waters. Due to the fact the before 1973 the only way for a
court to stay actions was in case of vexatious or oppressive litigation or abuse of process the
Court of Appeal refused the stay finding that none of these situations arose.11
Surprisingly the
House of Lords redefined the concept of vexatious or oppressive litigation and abuse of process
in order to widen the possibility to stay actions in a greater number of cases. Lord Reid accused
supra note 10, at 10 (discussing how the author observed that forum non conveniens was adopted in common law
countries but not in civil law countries, except in Japan where a special circumstances doctrine that has resemblance to the forum non conveniens doctrine is adopted). 5 GARY B. BORN, INTERNATIONAL CIVIL LITIGATION IN UNITED STATES COURTS 289
(Kluwer Law International 3d ed., 1996). 6 Alan Reed, To Be or Not to Be: The Forum Non Conveniens Performance Acted Out on Anglo-American
Courtroom Stages, 29 GA. J. INTL & COMP. L. 31, 38-39 (2000) (in which the author notes that the central tenet of the Brussels convention is the principle of iudex tenetur impertiri indicum isum by which a court is bound to
decide a case over which jurisdiction exists, and this principle is in fundamental opposition to forum non conveniens). See also RICHARD H. KREINDLER, TRANSNATIONAL LITIGATION: A BASIC PRIMER 36 (1997). 7 BORN, supra note 2 (quoting Edward L. Barrett, Jr., The Doctrine of Forum Non Conveniens, 35 CAL. L. REV. 380, 386 (1947); American Dredging Co. v. Miller, 510 U.S. 443 (1994)). 8 David McClean, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) at 117-118
9 Logan v. Bank of Scotland [1906] 1 K.B. 141 (C.A.)
10 The Atlantic Star [1974] A.C. 436
11 The Atlantic Star [1973] Q.B. at 381-382, 384-385, 387-388
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the Court of Appeal of parochialism and chauvinism and the rest of the House of Lords12
agreed
with such a change in order to achieve the desire outcome.13
Subsequently, the English doctrine of forum non conveniens was been unclear for a
relatively short period of time, because The Atlantic Star had simply created a brand-new
philosophy useing old vocabulary and conceptual apparatus.14
In 1978, in MacShannon v
Rockware Glass Ltd, the House of Lords in the word of Lord Salmon stated: "the real test of
[whether to grant a stay] depends upon what the court in its discretion considers that justice
demands". This test is preferable to the test of whether the plaintiff has behaved 'vexatiously' or
'oppressively' on a so-called liberal interpretation of those words. With respect, it is extremely
difficult to interpret them liberally without emasculating them and completely destroying their
true meaning.15
Almost unanimously the House of Lords agreed that the concept had to be
changed. However, English judges tended not to use the new words of forum non conveniens
preferring for a more open-minded interpretation of the concept of oppression, vexation and
abuse. It was only 1984 when Lord Diplock, in The Abidin Daver, was able to say "My Lords,
the essential change in the attitude of the English courts to pending or prospective litigation in
foreign jurisdictions that has been achieved step-by-step during the last 10 years as a result of the
successive decisions of this HouseI think the time is now ripe to acknowledge frankly it is, in
the field of law with which this appeal is concerned, indistinguishable from the Scottish legal
doctrine of forum non conveniens.16 In Spiliada Maritime Corp. v Cansulex Ltd17 the House of
Lords, through Lord Goff, summarized the English approach to the doctrine of forum non
conveniens stating the following rules:
a) The English judges will have to decline jurisdiction when a trial is likely to be more
suitable elsewhere for the interests of all the parties and for the benefit of justice. Of
course the defendant must show to the court that another forum with these characteristics
is available.
12
See the judgements of Lord Wilberforce and Lord Kilbrandon in The Atlantic Star [1974] A.C. at 467-469 and
477-478 13
See David W. Robertson Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103
L.Q.R. 398 at 411 14
David W. Robertson Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103
L.Q.R. 398 at 411 15
MacShannon v Rockware Glass Ltd [1987] A.C. 795 at 819 16
The Abidin Daver [1984] A.C. 398 at 411 17
Spiliada Maritime Corp. v Cansulex Ltd [1987] A.C. 460
-
b) The second issue pointed out by Lord Goff concerns the burden of proof. It is in fact
the defendant who must prove that there is a clear or distinctly more appropriate place to
handle the trial.18
c) The factors that a court must consider in order to decide which is the more appropriate
forum are legion. The weight to be given to these factors is normally discretionary. There
is not a complete list of the factors that a court must take into account in deciding the
question. However, some of the most important guidelines are the availability of
witnesses, the law applicable to the transaction, the residence of the parties or the place
where the parties carry on business and the possibility for the plaintiff to obtain justice in
the foreign jurisdiction. With reference to this point also the special competence or
expertise of a particular court must be taken into account in order to decide whether an
alternative forum is more appropriate. The weight to be given to these factors is for the
court to decide on case-by-case basis.
d) If there is any circumstance by reason of which a claimant could not obtain justice in a
foreign country the court will not grant a stay.19
Furthermore, in order to help the
claimant to preserve some of the legal advantages of the English forum sometimes it is
considered more appropriate to decline English jurisdiction on condition of a security
posted by the defendant. For the same reasons the defendant might also be asked by the
English court, for instance, to waive applicable limitation periods or to agree to other
stipulations.
The same Lord Goff, in Connelly v RTZ Corp. plc20
, pointed out the following new
points:
a) The general absence of some kind of legal aid is not a sufficient justification for the refusal of a
stay because it should not be forgotten that financial assistance for litigation is not necessarily
18
David McClean, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) at 120 19
For a different point of view see the leading Australian case Voth v Manildra Flour Mills Pty Ltd (1991) 171
C.L.R. 538 20
This particular situation arose in The Jalakrishna [1983] 2 Lloyd's Rep. 628
-
regarded as essential, even in sophisticated legal systems. It was not widely available in this
country until 1949.21
b) The legitimate personal or judicial advantage for the plaintiff in proceeding in England is not
considered a decisive factor: a general principle may be derived, which is that, if a clearly more
appropriate forum overseas has been identified, generally speaking the plaintiff will have to take
that forum as he finds it, even if it is in certain respects less advantageous to him than the English
forum. He may, for example, have to accept lower damages, or do without the more generous
English system of discovery. The same must apply to court procedure, including the rules of
evidence, applicable in the foreign forum. Only if the plaintiff can establish that substantial
justice cannot be done in the appropriate forum, will the court refuse to grant a stay.22
Present Day Applicability:
It is well established that forum non conveniens has replaced in England the ancient rule
of lis alibi pendens. On the other hand, the Brussels and Lugano Conventions and the more
recent EC Council Regulation No 44/200123
rely on the rule of lis alibi pendens, so that the set of
rules described in Spillada are now subject to a narrow application. It is outside the scope of this
essay to explain whether there is still a place for the application of the forum non conveniens
rule24
so that it is sufficient to underline that for the judgements between the European Member
State most of the time the rule of the Regulation shall prevail. Article 27 of the Regulation which
substitutes article 21 of the old Conventions, following the rule of lis alibi pendens, states:
1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than
the court first seized shall of its own motion stay its proceedings until such time
as the jurisdiction of the court first seized is established.
2. Where the jurisdiction of the court first seized is established, any court other
than the court first seized shall decline jurisdiction in favour of that court.
21
Connelly v RTZ Corp. plc [1998] A.C. 854 22
Connelly v RTZ Corp. plc [1998] A.C. 854 at 873. Read also the dissenting opinion of Lord Hoffman at 875-877 23
Connelly v RTZ Corp. plc [1998] A.C. 854 at 872. See also, for instance, Re Harrods (Bueons Aires) Ltd (No. 2)
[1992] Ch. 72 24
Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement
of judgments in civil and commercial matters
-
The interpretation of this article can create problems in establishing whether proceedings
involves the same parties, particularly in light of the fact that much international litigation
involves big corporations with multiple subsidiaries in different countries.
In The Tatry case25
the European Court stated that article 21 applied only in the case
where the identity of parties is completely the same but this does not entirely solve the
problem.26
It has also been established that the interpretation of the words "the same cause of
action" must be independent from any national scheme27
and this interpretation as well may
cause difficulties. Another problem concerns when exactly a court can be considered seized and
the European Court stated that the case has to be definitely pending.28
On the other hand, article
30 of the new Regulation makes an attempt to solve the problem stating: For the purposes of
this Section, a court shall be deemed to be seized:
1. at the time when the document instituting the proceedings or an equivalent
document is lodged with the court, provided that the plaintiff has not subsequently
failed to take the steps he was required to take to have service effected on the
defendant, or
2. if the document has to be served before being lodged with the court, at the time when it
is received by the authority responsible for service, provided that the plaintiff has not
subsequently failed to take the steps he was required to take to have the document lodged
with the court.
The rule of lis alibi pendens and in particular the above-examined article 27 of the EC
Regulation can be readily criticised because it appears to encourage a court-race. The parties can
find particularly advantageous to get their forum first in order, for example, to have the case
examined from the court of their own countries. Due to article 27, even in a case where England
is the natural forum, the trial may be held in a different Member State because the plaintiff goes
to court in that state first. It can be argued that there is always a possibility for the defendant to
25
See Harrods Ltd v Harrods (Buenos Aires) Ltd (No.2) [1992] Ch. 72. For a complete analysis of the matter with
reference to the consequences of the case see Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at
561-569 26
Case c-406/92 The Tatry [1994] E.C.R. I-5439 27
See e.g. Case c-351/96 Drouot Assurances SA v Consolidated Metallurgical Indistries [1998] E.C.R. I-3057 and
Turner v Grovit [1999] 3 W.L.R. 794 28
See for instance Case 144/86 Gubisch Maschinenfabrik AG v Palombo [1987] E.C.R. [25] 4861
-
obtain a negative declaration29
but such a remedy does not solve the problem of the race to the
court, be the defendant or the claimant to welcome this race.
Moreover, article 28 of the EC Regulation, substituting article 22 of the Brussels
Convention states:
1. Where related actions are pending in the courts of different
Member States, any court other than the court first seized may stay
its proceedings.
2. Where these actions are pending at first instance, any court other
than the court first seized may also, on the application of one of the
parties, decline jurisdiction if the court first seized has jurisdiction
over the actions in question and its law permits the consolidation
thereof.
3. For the purposes of this Article, actions are deemed to be related
where they are so closely connected that it is expedient to hear and
determine them together to avoid the risk of irreconcilable
judgments resulting from separate proceedings.
Article 28 gives only the possibility to courts to stay their proceedings without giving any
explanation about how to use this choice. Of course English court can rely on the principles of
forum non conveniens in exercising this choice but the substantial reason why it has been
decided to offer a discretion to the court is still obscure and in contrast with the aim of the
Regulation.
Article 29, which substitutes article 23 of the former Brussels Convention, refers to the
rare possibility in which more than one court has exclusive jurisdiction and it also follows the
rule of the first come first served assisting again the court-race. The Court of Appeal30 has
stated that in case of exclusive jurisdiction of an English court under the rules of the Convention,
the English court shall prevail over article old 21 and consequently over new article 29.
29
Case 129/83 Zelger v Salintrini (No. 2) [1984] E.C.R. 2397
30
David McClean, Morris: The Conflict of Laws (London, Sweet & Maxwell Ltd, 2000) at 127
-
Unfortunately even in this clear case the question whether the exclusive jurisdiction shall prevail
is not entirely free from doubt.
The reason why the rule of forum non conveniens, seen by English lawyer as an
improvement in the rule of jurisdiction, has not been accepted by lawyers from civil law
jurisdictions31
is based principally on the main differences between the two systems. It has been
argued by civil lawyers that the rule of forum non conveniens does not provide certainty and
predictability. It is likely that exactly the opposite is true because in forum non conveniens the
defendant will always know that, even if the plaintiff runs to the court first, he still has the
chance to see the case handled by the most appropriate court and, even if there is not a list of
factors to rely on for the decision, the choice of the court can be predicted in advance. In other
words, most of the time it is possible for the defendant to predict which court will be chosen as
the most appropriate.
More frightening for civil lawyers are the lack of legislations and it has been argued that
forum non conveniens can unfortunately lead to arbitrary decisions. Even if the opinion about the
predictability of the doctrine can differ, the general structure of forum non conveniens is clear
and well-established.32
Unfortunately the Latin words of the principle does not help civil lawyers
in understanding the real value of the doctrine because they can create the impression that is only
convenient for the court rather than helpful to provide a better decision.33
It has been argued34
that a problem arises where an English court stays its proceedings in
favour of another court and the second then declines jurisdiction. This can be considered a false
problem and in order to explanation why this is so we can rely on two considerations. First of all,
the English court has merely stayed35
its proceedings and has not declined jurisdiction. If it is
discovered that an action cannot be brought in the other country there is no longer a more
appropriate forum available and, in consequence of this, an application can be made to the
English court to continue the proceedings in England. In second instance, the availability of the
31
Continental Bank N.A. v Aeokos Cia Naviera SA [1994] 1 W.L.R. 588 32
See Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 33
Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 555 34
See for instance J.K. Kropholler, Handbuch des Internationalen Zilverfahrensrechst (Tubingen 1982), vol. I, ch.
III, p. 282 35
Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 555 citing P. Lagarde, Le principe de
proximit dans le droit international priv contemporain, Hague Recueil 1986 I 11 at 154
-
other court to handle the case has certainly been considered by the English court before the
English proceedings were stayed and therefore it is a problem, which is unlikely to arise in
practice.
It has also been argued by civil lawyers that the English courts act in their own motion in
order to decide whether or not to stay their proceedings.36
The court directs the process in civil
law systems and there is often some kind of identification with the concept of state sovereignty.
On the other, hand, in England but also in United States of America and in most of the common
law countries, proceedings are mostly concerned with the interest of the parties and it is quite
rare that questions of sovereignty or public interest arise.37
As we have noted, the reasons why forum non coveniens in England is considered a very
helpful tool in order to help the needs of justice is not well appreciated by civil lawyers. There
are certainly many reasons for this hostility but two considerations must be taken into account:
first, the verbal and adversarial structure of the English civil procedure and second, the different
role played by English courts in international litigation.38
The use of oral witnesses in England is
much more common than in civil law countries and two factors taken strongly into consideration
by English court in order to stay an action are the location of witnesses and the location of other
evidence. The transportation of witnesses can considerably increase the cost of proceedings and
even the inspection of documents in another country can be very expensive.39
Even if frequently,
in civil law countries, the cross-examination of the witnesses and experts does not occur, in civil
law countries witnesses and expert play an important role and the possibility to use a
discretionary tool in deciding which court is better, could be very useful in this context. Another
problem arises when it is necessary to consider the content of foreign law. English courts treats
the foreign law simply as a question of fact where, even if civil law systems does not use the
same approach that use to identify the domestic law, its judge can investigate the content of
foreign law by himself. In Germany for example, the judge can identify the content of foreign
36
See Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 556 37
J. Fawcett, Trial in England or Abroad: The Underlying Policy Considerations (1989) ) O.J.L.S. 205 38
See Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 556 39
See for example Re Harrods (Bueons Aires) Ltd (No. 2) [1992] Ch. 72
-
law asking an opinion from an institute of comparative studies and in Italy the judge can
investigate the content of the foreign law by himself with or without the help of experts.40
However, even if the practical reasons that lead to the introduction of the doctrine of
forum non conveniens are mainly reduced in civil law countries, where there is a less rigorous
use of oral witnesses, it can be argued that a more discretional approach could be welcome even
in this very different background. A further matter concerns the differences between the way
cases are treated by English courts and by most of the other jurisdictions. In England and Wales,
large international disputes are mostly handled by London courts or go to arbitration where in
most other countries the international claims are smaller and, more often than not, there are only
two parties involved. Nevertheless, this is changing relatively fast. If years ago international
litigation on a large scale was a prerogative of the English courts, these days big international
transactions not involving the courts of London are becoming much more common all around the
world.
Due to this, even if explicit references to the forum non conveniens doctrine are relatively
rare in civil law countries, some more discretional techniques of interpretation have been
developed. In Germany, for example, although the general approach to forum non conveniens
was generally hostile,41
a couple of monographs relatively favourable to the new doctrine have
appeared since 1960s.42
In France, occasionally courts have declined jurisdiction because the
case could be handled in a more suitable forum43
and still in France there are a few advocates of
the new doctrine. In the Netherlands there is a situation where one may speak of forum non
conveniens: second paragraph of article 429 the Dutch code of civil procedure, in fact, states that
the court has no jurisdiction if the petition has insufficient connection with the Netherlands.
Moreover it has been said that Dutch law has nowadays adopted the doctrine of forum non
convieniens lock, stock and barrel44
so that even the deletion of article 429 (2) would not change
anything.
40
M. Rubino-Sammartano, Il giudice nazionale di fronte alla legge straniera, RDIPP 1991, 315 41
See for example P. Schlosser, Praxis des internationalen Privat- und Verfhrensrecht (Munich 1983) at 285 42
See for example J. Schroder, Internazionale Zustandigkeit (Opladen 1971) 43
Cour d'Appel Paris, 17 November 1987 Mengatti c. Soc. Metallurgica Nava Stefano e Giuseppina Clunet 1989, 96 44
See J.P. Verheul, The forum (non) conveniens in English and Dutch Law and under some international
conventions (1986) 35 I.C.L.Q. 413 at 417
-
The great advantage of the doctrine of forum non conveniens is the possibility to give to
the courts a discretionary power in order to prevent the situation in which a case is not handled in
the most appropriate or so called natural court. This discretionary power prevents the waste of
money due to transportation of witnesses and to the examination of foreign documents and also
tends to prevent injustices sometimes created by the rule of the first seized court. Unfortunately it
is exactly the idea of a discretionary power that scares more civil lawyers for whom the choice of
jurisdiction is an expression of public power and it does not easily fit with a discretionary stay of
proceedings. Another objection made by civil lawyers is based on the fundamental right of the
plaintiff to access to the court individuated by the legal system and the exercise of a discretional
power in order to decide whether or not to stay proceedings is considered detestable.45
However, things may well change and a different approach can be noted in The Hague
Convention on International Jurisdiction and Foreign Judgements in Civil and Commercial
Matters.
Article 21 (1) of the draft states, apparently repeating the Brussels Convention and the
EC Regulation states that when the same parties are engaged in proceedings in courts of different
Contracting States and when such proceedings are based on the same causes of action,
irrespective of the relief sought, the court second seized shall suspend the proceedings The title
of the article is Lis pendens and it might seem clear that the approach of the new Convention
repeats the rules of the EC Regulation. However, following undoubtedly a very different
approach article 22 (1) provides that in exceptional circumstances the court may, on application
by a party, suspend its proceedings if in that case it is clearly inappropriate for that court to
exercise jurisdiction and if a court of another State has jurisdiction and is clearly more
appropriate to resolve the dispute. Such application must be made no later than at the time of the
first defence of the merits. Paragraph 2 of article 22, recalling the English doctrine and in
particular Lord Goff in Spiliada continues: The court shall take into account, in particular:
a) any inconvenience to the parties in view of their habitual
residence;
b) the nature and location of the evidence, including documents
and witnesses, and the procedures for obtaining such evidence;
45
Wendy Kennett Forum non conveniens in Europe [1995] C.L.J. 552 at 560
-
c) applicable limitation or prescription periods;
d) the possibility of obtaining recognition and enforcement of any
decision on the merits.
Paragraph 4 deals with the possibility for the first court seized to ask some form of
security as we have seen in Spiliada and paragraph 5 provides that when the court has suspended
its proceedings under paragraph 1,
a) It shall decline to exercise jurisdiction if the court of the other
State exercises jurisdiction, or if the plaintiff does not bring the
proceedings in that State within the time specified by the court; or
b) It shall proceed with the case if the court of the other State
decides not to exercise jurisdiction.
The Preliminary Document No 18 of February 200246
underlines that The Convention as
currently drafted does not allow for the possibility of applying forum non conveniens in
situations in which there exists an exclusive choice of court clause because the special rules do
not apply when the jurisdiction of the court seized is not founded on an exclusive choice of court
agreement.47
Even if the rules of the proposal are stricter than the English rules it can be
definitely assumed that the doctrine of forum non conveniens is hopefully going to be accepted
even by civil law jurisdictions.
Application in the American Context:
On a generic note, in the United States of America, the defendant may move an action
seeking to dismiss an action on the ground of Forum Non Conveniens. Invoking this doctrine
usually means that though the plaintiff properly invoked the jurisdiction of the court, it is
inconvenient for the court and the defendant to have a trial in the original jurisdiction. The court
must balance convenience against the plaintiffs choice of forum. In other words, if the plaintiffs
choice of forum was reasonable, the defendant must show a compelling reason to change
jurisdiction. If a transfer would simply shift the inconvenience from one party to the other, the
plaintiffs choice of forum should not be disturbed.
46
See The Preliminary Document No 18 of February 2002 submitted by Avril D. Haines 47
See article 22(1) of the Draft of the Hague Convention on International Jurisdiction and Foreign Judgements in
Civil and Commercial Matters
-
Generally, a corporation sued in the jurisdiction of its headquarters is not entitled to seek
a Forum Non Conveniens dismissal. Thus if an American corporation is sued in an area where it
only transacts business but not where it has its headquarters, and the court dismisses based upon
FNC, the plaintiff may file the action once more, in the jurisdiction of the corporations
headquarters. In deciding whether to grant the motion, the court considers certain relevant points:
The location of potential witnesses. The defendant must make a full and candid
indication, naming the potential witnesses for the defence, and enumerating details as to
their location, as to what their testimony may be and how crucial it is for the defence, and
setting forth how exactly they may be inconvenienced by having to testify in the court
chosen by plaintiff.
The location of relevant evidence and records. The defendant must identify the records;
explain details of those in charge of the records; address issues of necessity, language,
and translation problems; volume of such records; the law governing these records; and
rule out the existence of duplicate records in the jurisdiction chosen by the plaintiff. The
mere fact that records need to be translated is not sufficient grounds to invoke FNC.
Possible undue hardship for the defendant. The defendant must explain what the hardship
is and how material the costs are. If there are costs involved, they need to be spelled out
in astute detail. If there is a difficulty in getting witnesses out of a foreign court and into
the original court, this needs to be revealed to the court. The defendant must explain why
the use of Letters Rogatory or other judicial reciprocity tools are not sufficient and cannot
replace actual transfer of the case. The standard that the defendant must meet is
overwhelming hardship if they are required to litigate in the forums State.
Availability of adequate alternative forums for the plaintiff. Merely pointing out that the
plaintiff could have sued somewhere else is not sufficient to succeed on an FNC motion.
The expeditious use of judicial resources. In practice, this is just boilerplate language that
comes along with the application, often utilised purely out of a perfunctory requirement
in order to show concern for the judiciary. However, sometimes the court chosen by the
plaintiff may be logistically or administratively unfit or illequipped for the case; for
example, a case may involve a large number of torts.
-
The choice of law applicable to the dispute. If all other factors weigh in favour of keeping
the case in the jurisdiction where it was filed, then the court may choose between
application of local law (lex fori) or relevant foreign law. Thus, the mere fact that foreign
law may apply to the event, circumstances, accident, or occurrence is not a strong reason
to dismiss the case on FNC grounds.
Questions of public policy. In analyzing the factors, the subject matter of the complaint
may touch on a sensitive issue that is important to the laws of either the original
jurisdiction or the alternative forum. Those public policy issues must be pinpointed,
analyzed and briefed in a way that makes it clear why this issue overrides the other
factors. For example, an employee suing a foreign corporation in a state of employment,
may enjoy the public policy to protect local employees from foreign abusers. See the
Federal Employers Liability Act (FELA) for further reference.
The location where the cause of action arose. In most states, defendant must usually show
that the cause of action arose outside of the jurisdiction.
The identities of the parties. Who is suing whom? Is the plaintiff suing an individual
defendant or a small company without financial means as a method to oppress the
defendant with financial and legal costs by litigating in a remote court? Is the defendant a
conglomerate making the FNC application simply to force the plaintiff to bear expensive
costs of travel and retainer of foreign lawyers? A plaintiff who is a resident in the state
where action was filed is normally entitled to have his case heard in his home state.
Vexatious motive. Where there is no evidence that the plaintiff had improper intent in
bringing the case specifically in a particular forum, courts usually deny the FNC motion.
Jurisprudential development and political conditions at the foreign forum. Is the court
going to send the plaintiff to a land where the law is underdeveloped, uncivilized, or
where there is no equal protection or due process? Is the court going to send the plaintiff
to another court in a country where violence is rampant or in the middle of a war? A suit
will not be dismissed if the foreign court does not permit litigation of the subject matter
of the complaint, no live testimony of the plaintiff is required by appearance, or if the
foreign law is otherwise deficient in its protocols or procedures.
-
The determination of the court may not be arbitrary or abusive as this is a drastic remedy to be
applied with caution and restraint. As for the transfer of a trial to a jurisdiction outside of the
U.S., courts will only grant the transfer if a foreign court is more appropriate, and there may be
a real opportunity to obtain justice there.
In New York, for example, there is a strong presumption in favor of the plaintiffs choice
of forum.48
A defendant must show compelling evidence in order to disturb the choice of forum.
The burden of proof is entirely on the defendant.49
The court must also consider the defendants
vast resources compared with the plaintiffs limited resources as an aggrieved individual.50
In 2006, the 2nd Circuit Federal Court in New York issued a decision in the famous Coca
Cola case. Coca Cola took over assets of Jews expelled from Egypt in the 1950s and was sued in
New York.51
In that case, the plaintiffs were Canadians and nonresidents of New York. The
court denied Coca Colas FNC motion and the U.S. Supreme Court denied certiorari. The 2nd
Circuit stated that the fact that the New York court would need to apply modest application of
Egyptian law was not a problem because courts of this Circuit are regularly called upon to
interpret foreign law without thereby offending the principles of international comity. Also, the
fact that there were witnesses abroad was not a problem either. They could be flown into the U.S.
or Letters Rogatory could be issued to the Egyptian courts to collect their testimony.
Further, it was held that in an FNC scenario, a court applies the balance of conveniences,
but preference (and weight) must be given to the fact that plaintiffs chose this particular forum
for legitimate reasons. The fact that plaintiffs could sue in Canada was not relevant because
Coca Cola was a U.S. company and it was perfectly reasonable to sue in the US. There have
been efforts by State legislatures to limit the availability of the doctrine to make local
48
Gulf Oil v. Gilbert, 330 U.S. 501, 508 (1947); R. Maganlal & Co., 942 F.2d 164, 167 (2nd Cir. 1991); WIWA v.
Royal Dutch Petroleum Co., 226 F.3d 88, 101 (2d Cir. 2000); and Maran Coal Corp. V. Societe Generale de
Surveillance S.A., No. 92 CIV 8728, 1993 US.Dist. LEXIS 12160 at *6 (S.D.N.Y. September 2, 1993). 49
Strategic Value Master Fund, Ltd. v. Cargill Fin. Serv. Corp., 421 F.2d 741, 754 (S.D.N.Y. 2006). 50
See Guidi v. Inter Continental Hotels Corp., 95 CIV 9006, 2003 U.S.Dist. LEXIS 85972 (S.D.N.Y. November 29,
2009), and WIWA: defendants have not demonstrated that these costs [of shipping documents and witnesses] are excessively burdensome, especially in view of defendants vast resources. Also, Presbyterian Church of Sudan v. Talisman Energy, Inc., 244 F.Supp.2d 289 (S.D.N.Y. 2003) at 341: A countervailing factor is the relative means of the parties. 51
Bigio v. Coca Cola Company, 448 F.3d 176 (2d Cir. 2006), certiorari to Sup. Ct.
-
jurisdictions more plaintifffriendly. In Texas, for example, parties in product liability cases may
not invoke the rule.
Application in the British Context:
In England, the concept of forum conveniens has always been a relevant factor in the
exercise of the discretion, in order to grant permission to serve out of the jurisdiction under their
Order 11 Rule (1) (1) i.e. Rule 27 of the Civil Procedure Rules, 1998, but until 1984, the English
courts refused to accept that the jurisdiction to stay actions commenced against defendants who
are sued in England as of right could be based on forum non conveniens grounds.
In England, the idea of forum non conveniens was largely limited until the decision of the
House of Lords in 1973 in The Atlantic Star52
which radically changed its position. A defendant
who sought a stay of English proceedings had a very heavy burden on his shoulders. The case
concerned two vessels from Holland that collided in Belgian waters. Due to the fact that before
1973 the only way for a court to stay actions was in case of vexatious or oppressive litigation or
abuse of process, the Court of Appeal refused the stay finding that none of these situations arose.
Surprisingly, the House of Lords redefined the concept of vexatious or oppressive litigation and
abuse of process in order to widen the possibility to stay actions in a greater number of cases.
Lord Reid blamed the Court of Appeal of parochialism and chauvinism and the rest of the House
of Lords agreed with such a change in order to achieve the desire outcome.
Later, the English doctrine of forum non conveniens had been unclear for a relatively
short period of time, because The Atlantic Star had created a brand-new philosophy using old
vocabulary and conceptual apparatus. In the process of development of modern English private
international law, the year 1978 stands out as a particularly significant milestone. In January of
that year, a differently constituted House of Lords decided the case of MacShannon v Rockware
Glass Ltd53
just four years after unanimously rejecting an invitation to import the Scottish legal
doctrine of forum non conveniens into English law in The Atlantic Star.
52
[1974] A.C. 436 53
[1978] A.C. 795.
-
The House of Lords went considerably further when all, except Lord Keith of Kinkel,
were in favour of discontinuing the use of the words oppressive and vexatious altogether. Lord
Diplock restated that governing principle as being that, in order to justify a stay, two conditions
had to be satisfied, one positive and one negative: (a) the defendant had to satisfy the court that
there is another forum to whose jurisdiction he is amenable in which justice could be done
between the parties at substantially less inconvenience or expense, and (b) the stay was not to
deprive the claimant of a legitimate or juridical advantage which would be available to him if he
invoked the jurisdiction of the English Court.
In The Atlantic Star and MacShannon, the House of Lords declined to adopt the
doctrine of forum non conveniens as part of English law preferring a more open-minded
interpretation of the concept of oppression, vexation and abuse. In fact, in the words of Lord
Salmon, he said the real test of [whether to grant a stay or not] depends upon what the court in
its discretion considers that justice demands.
But by 1984, when The Abidin Daver54
was decided, Lord Diplock was able to say
forcefully that the essential change in the attitude of the English courts to pending or prospective
litigation in foreign jurisdictions that has been achieved step-by-step during the last ten years as a
consequence of the successive decisions of the House of Lords commencing with The Atlantic
Star: judicial chauvinism has been replaced by judicial comity to an extent which I think the
time is now right to acknowledge frankly is, in the field of law with which this appeal is
concerned, indistinguishable from the Scottish legal doctrine of forum non conveniens.
Ultimately, in Spiliada Maritime Corp v Consulex Ltd.,55
the House of Lords
summarized the English approach to the doctrine of forum non conveniens very aptly, stating that
the basic principle is that a stay will only be granted on the grounds of forum non conveniens
where the court is satisfied that there is some other available forum, having competent
jurisdiction, which is the appropriate forum for the trial of the action i.e. in which the case may
be tried more suitably for the interests of all the parties and the ends of justice.
54
[1984] A.C. 398. 55
[1987] A.C. 460.
-
In Connelly v RTZ Corp, Plc.56
, the House of Lords had to resolve a motion for a stay in
favour of Namibia. The claimant, a former worker injured at a Namibian uranium mine,
responded with the submission that, unless the case could be brought in England on legal aid, it
could not be brought at all. The majority of the House of Lords (reversing the court below) found
that, although all other factors pointed to Namibia as the appropriate forum, the availability of
legal aid could be a relevant factor in an exceptional case justifying deciding a stay, given the
factors that accumulated in favour of the claimant of such legal aid.
In the meantime, a much larger and potentially more significant set of proceedings had
been commenced in England in Cape Plc v The Lubbe.57
The litigation was concerned with
redress for asbestosis contracted during the operations of the Cape Group in mining asbestos in
South Africa during the apartheid era. The case therefore had a fundamentally different
complexion to Connelly. It has been common ground in Connelly that Namibia was an available
forum to the plaintiff since the company which had employed him was incorporated there and
continued to operate. In Lubbe, however, this was not so. Thus, the availability of an alternative
forum depended solely upon the facts that, after writs had been issued in England, Cape had
given undertakings that it would submit to the jurisdiction of the South African courts. Indeed,
Cape practically explored whether a public interest law centre in Johannesburg might be
prepared to take up the case on behalf of the claimants. The approach was rejected.
The first English writ was issued on behalf of Mrs. Lubbe and four other claimants only.
The case was stayed at first instance, but the Court of Appeal allowed the appeal emphasizing
that the South African forum was only available as a result of Capes undertakings. Leave to
appeal to the House of Lords was refused. Then, in December 1998, writs were issued by some
3,000 claimants on the same legal theory. Cape then commenced a second round of forum non
conveniens objections. This time, both at first instance and in the Court of Appeal, it was decided
that South Africa was the more appropriate forum and that a stay should be granted. The Court of
Appeal found no exceptional circumstances of the kind required by the House of Lords in
Connelly were present in Lubbe. The claimants appealed to the House of Lords. On the appeal,
the Republic of South Africa itself intervened. It did so in favour of the claimants, arguing that it
56
[1998] A.C. 854 at 873. 57
[2000] UKHL 41
-
saw no public interest in requiring its courts to adjudicate in a dispute which arises from the
alleged acts of an English company with the laws of the old South Africa. The House of Lords
decided the forum issue in favour of the claimants. Lord Bingham of Cornell held:
In the special and unusual circumstances of these proceedings, lack of the means in
South Africa, to prosecute these claims to a conclusion, provides compelling grounds, at the
second stage of the Spiliada test for refusing to stay the proceedings here.
A trial date was fixed in England for April 2002. On 21 December 2001, the (by now)
7,500 claimants agreed a settlement with Cape. After protracted further negotiations, the total
amount of the settlement was revised in March 2003 to 10.7 million.
Application in the Indian Context:
Within the domestic system, the principle is applied in cases where the judicial structure
is federal and not unified in structure. The debate assumes importance given the expansions in
jurisdiction under certain legislations which allow the plaintiff a choice to file a suit in his place
of residence, as opposed to the principle in the Code of Civil Procedure which requires filing of
suits in the defendants place of residence. Now, if a Court does have the jurisdiction under
either the CPC or under the specific provisions such as S. 62(2) Copyrights Act or S. 134(2)
Trademarks Act, can it refuse to hear the case on the ground that a more alternative forum is
available? Does the private international law principle of forum non conveniens extend to the
jurisdiction of Courts within India in a solely domestic context? The Delhi High Court decision
in St. Ives Laboratories v. Arif Perfumers,58
suggests that it does.
The case involved allegations of trademark infringement. It was not the case of the
plaintiff that it resided in Delhi. Thus, for the purposes of the case, the special jurisdictional
sections were irrelevant. The question had to be decided in accordance with the rules of the Civil
Procedure Code. In particular, the issue was whether part of the cause of action arose in Delhi, so
that the Delhi Courts could assume jurisdiction.
There was a clear allegation in the plaint that the defendants were surreptitiously and
clandestinely trading their goods under the impugned trademark and labels in Delhi and in other
parts of the country. The trademark was registered in Delhi, and the plaintiff alleged that it was
58
CS (OS) No. 78/2009, decided by Justice S.N. Dhingra
-
suffering losses in Delhi too. In deciding jurisdiction, a Court usually satisfies itself with the
averments made in the plaint. In the facts of the case, those averments indicated that part of the
cause of action did arise in Delhi. It was argued that in view of this, Delhi Courts would have
jurisdiction under Section 20(c) of the CPC.The Court held:
Looking at the entire plaint, it only seems that the plaintiff had filed this suit at Delhi only as a
device of harassment calculated to force the defendant to come to Delhi, engage a Counsel at
enormous expense and contest litigation. The plaintiff, who was resident of USA could have
easily filed this suit at Courts at Bombay/Maharashtra and pursued the matter. Filing of suit in
Delhi on the basis of vague allegations that the goods of defendants were being sold
clandestinely throughout the country including Delhi makes no sense. No cause of action can be
said to have arisen in Delhi. Such allegations of clandestine sale can be made against any
person without any foundation and the plaintiff even during trial can always escape giving proof
of such clandestine sale saying that he has stated in the plaint that the sale was clandestine and
no bills were being issued. The Court cannot be used as a tool to put such a burden on the
defendant that the defendant is unable to even defend the suit. The plaintiff cannot be given
absolute liberty to choose the place of suing a defendant out of entire country on the basis of
unfounded and vague allegations. In such a case CPC provisions regarding jurisdiction stand
rendered useless.
Now, it might well be possible to hold that the Court had concluded that no part of the
cause of action arose in Delhi. There are at least three reasons, however, for believing that the
Court was in fact applying the doctrine of forum non conveniens. First, on the averments made in
the plaint, it was not possible to say that no part of the cause of action arose in Delhi. The
veracity of those averments cannot be gone into for the purposes of determining jurisdiction.
Secondly, if indeed no part of the cause of action arose in Delhi, there was no reason to make
observations concerning the hardship and burden faced by the defendant. Thirdly, in its
reasoning, the Court referred to a Supreme Court decision Kusum Ingots v. Union of India59
holding that a Court is not bound to entertain a plaint if a small part of the cause of action arose
within its jurisdiction. This indicates that the Court was holding that even though a part of the
cause of action arose in Delhi, the Delhi Courts were not the most appropriate forum for
adjudication.
The judgment in Kusum Ingots itself appears to accept the forum non conveniens
principle. That case was concerned not with private law disputes but with the public law question
regarding the appropriate High Court in cases of writ jurisdiction under Article 226 of the
59
AIR 1994 Delhi 126
-
Constitution. Nonetheless, it was held that the CPC principles of jurisdiction were equally
applicable to writ proceedings. The Supreme Court went on to say that indisputably even if a
small fraction of the cause of action arises within the jurisdiction of a particular Court, that Court
shall have jurisdiction in the matter. Yet, on appropriate cases, the Court could refuse to exercise
that jurisdiction on the ground of forum non conveniens. Thus, the Court recognised the
distinction between the existence of jurisdiction and the exercise of jurisdiction.
The principle of Kusum Ingots has been followed subsequently. In Jayaswals Neco v.
Union of India,60
the decision was analysed in depth; and was held to be authority for the
proposition that when a cause of action arises partly in one jurisdiction and partly in the other, it
is ordinarily for the petitioner to choose his forum. Yet, in appropriate cases the Court
concerned may refuse to hear the matter because of forum non conveniens. The Delhi High
Court decision in St. Ives seems to now settle the issue that the doctrine would also apply outside
writ jurisdiction to an ordinary civil suit between two private parties.
Application in Other Countries:
The doctrine of forum non conveniens has, to a greater or lesser extent, been adopted in several
common law countries, for example, New Zealand,61
Hong Kong,62
Singapore63
and India.64
In
1990, in Australia, the High Court in the case of Voth v Manildra Flour Mills Pty Ltd.,65
propounded a new principle governing the stay of Australian proceedings in transnational cases.
Henceforth, an Australian court would only a stay of its proceedings where the court considered
itself a clearly inappropriate forum. In proposing this test, the High Court consciously departed
from the principles established in England by the House of Lords in Spiliada. Briefly stated, this
test requires that local proceedings be stayed where there exists a more appropriate court for
trial. Although the High Court claimed in Voth that the difference between the clearly
inappropriate and the more appropriate tests was slight, critics warned that the effect of the
60 Wp (C) 2177/2007] on 2/7/2007
61
McConnell Dowell Construction Ltd v Lloyds Syndicate 396 [1988] 2 N.Z. L.R. 257. 62
The Adhigina Meranti [1988] 1 Lloyds Rep. 384 (H.K.C.A.). 63
Oriental Insurance Co. Ltd. V Bhavani Stores Pte. Ltd. [1998] 1 Sing. L.R. 253, C.A. 64
Airbus Industrie G.I.E. v Patel [1999] 1 A.C. 119. 65
(1990) 171 CLP 538
-
High Court decision may be to encourage Australian courts to exercise jurisdiction over matters
which have very little connection with Australia.
Conclusion:
As we have seen the mechanistic rules of lis alibi pendens give priority to the court first
seized without accepting the major degree of discretion offered by the theory of forum non
conveniens. The rules of the latter doctrine permit the better establishment of the needs of justice
by choosing the most appropriate forum in relation to different cases where there is of course the
possibility of choice between more than one appropriate court. Some of the practical reasons
why it is undoubtedly better to offer the defendant a tool as to resist to the choice of jurisdiction
of the plaintiff has been well describe by David W. Robertson and his words bear repetition "
First a defendant may be subjected to grave injustice by being sued in a court far from the
defendant's domicile, from the situs of the events that gave rise to the dispute, or from the
sources of the evidence necessary to resolve the dispute. Second, the absence of a check on a
transnational plaintiffs' initial forum choices could cause certain courts to become overcrowded,
with corresponding detriment to domestic litigants' need for speedy justice, to the resources of
the country where the court sits, and arguably to the judges themselves. Third, when a court in
Country X decides a case which is more intimately connected with Country Y, Country Y's
public policies may be thwarted or its sovereignty offended". 66
It can be also useful to remark again that the doctrine of forum non conveniens did not
originate in England and that English law adopted it quite recently for practical exigencies. This
change has been welcomed in England by the major part of the judges and by many writers. For
the same reason it could be considered an improvement under the civil law jurisdictions giving
them a possibility to find a more flexible approach without destroying their exigency of certainty
and predictability. For these reasons it is to be hoped that the new rules of article 22 of the draft
of The Hague Convention will become the new standard international law in relation to the
choice of jurisdiction in civil and commercial matters and that this will also lead to the
introduction of a remarkable common law doctrine in civil law jurisdictions.
66
David W. Robertson Forum non conveniens in America and England: 'A rather fantastic fiction' (1987) 103
L.Q.R. 398