The opinion of the court was delivered by: Whitman Knapp, District Judge.
This action arises out of a dispute over the termination date
of a letter of credit issued by defendant Westpac Banking
Corporation ("Westpac") in favor of plaintiff Mutual Export
Corporation ("Mutual"). Westpac moves to dismiss under the
doctrine of forum non conveniens. For reasons which follow, the
motion is denied.
Plaintiff Mutual, a Delaware corporation with its principal
place of business in Roseland, New Jersey, is engaged in the
business of chartering cargo ships in international trade. It
is a wholly-owned subsidiary of Reefer Express Lines Pty,
Limited ("Reefer"), a Bermuda corporation which likewise has
its principal place of business in Roseland, New Jersey.
Plaintiff shares its office space with Reefer, and because it
has no employees of its own, it, for a fee, utilizes the
services of Reefer's employees, most of whom are residents of
New Jersey or New York.
In 1985, Reefer decided to sell another of its wholly-owned
subsidiaries, New Guinea Express Lines (A/Asia) Pty, Ltd. ("New
Guinea Express"),*fn1 to, inter alia, members of New Guinea
Express's management. New Guinea Express, an Australian
corporation based in Sydney, Australia, operated a shipping
service between ports in Australia and New Guinea. It had
entered into certain charter agreements with the plaintiff,
whereby New Guinea Express sub-chartered two of plaintiff's
vessels. Since the two companies no longer would be commonly
owned by Reefer, the transaction transferring ownership of New
Guinea Express required that a letter of credit or similar bank
guarantee be issued to secure some of the charter party
payments owed to plaintiff by New Guinea Express.
Defendant Westpac, an Australian corporation, is the bank
from which New Guinea Express sought and ultimately obtained
the letter of credit for the benefit of plaintiff.
Headquartered in Sydney, defendant maintains branch offices in
more than a dozen countries. One such branch occupies three
floors of an office building in midtown Manhattan.
On July 5, 1985, after its employees in Australia had
reviewed and approved New Guinea Express's request, defendant
issued a $500,000 standby letter of credit in favor of
plaintiff. New Guinea Express contemporaneously agreed to
indemnify defendant for any claims arising out of the letter of
credit, which, according to its terms, was to expire on June
In December 1988, New Guinea Express defaulted on the charter
payments it owed plaintiff. Unable to obtain payments from New
Guinea Express, which had sought protection under Australia's
bankruptcy laws, plaintiff looked to the letter of credit.
Thus, on October 3, 1989, it requested payment of $500,000 from
defendant. Defendant refused to pay, pointing to the fact that
the express terms of the letter of credit provided for its
expiration on June 30, 1986.
Two months later, plaintiff wrote to defendant, asserting its
position that the expiration date appearing on the letter of
credit was an error, and requesting that defendant extend the
letter of credit to its originally intended date, July 13,
1992. The following day plaintiff presented a sight draft at
defendant's New York City branch. Defendant again refused to
pay, and plaintiff commenced this action.
The complaint sets forth three claims: breach of contract,
reformation, and estoppel. Plaintiff asserts that June 20, 1986
was not the expiration date upon which the parties previously
had agreed. It bases this contention in part on a draft of the
letter of credit sent to it by New Guinea Express on June 28,
1985. The draft stated that the letter of credit was to expire
"45 days after the later of the last possible day on which
[either of the ships' charters] may terminate." According to
plaintiff, this language contemplated an expiration date of
July 13, 1992.
Plaintiff also contends that two letters from defendant to
New Guinea Express, written in 1987 and 1988, long after the
claimed 1986 expiration date, evidence the continued existence
of the $500,000 guarantee in favor of plaintiff. Plaintiff
further alleges that, but for defendant's agreement to issue a
letter of credit that would expire
in 1992, the sale of New Guinea Express would not have taken
Defendant timely filed the instant motion to dismiss for
forum non conveniens, contending that this action "belongs" in
Whether an action should be dismissed for forum non
conveniens involves a balancing of the private and public
interests outlined in Gulf Oil Corporation v. Gilbert (1947)
330 U.S. 501, 508-09, 67 S.Ct. 839, 843, 91 L.Ed. 1055. "Unless
[that] balance is strongly in favor of the defendant, the
plaintiff's choice of forum should rarely be disturbed." Id. at
508, 67 S.Ct. at 843. Although a plaintiff's citizenship should
not be accorded "talismanic significance," see Alcoa S.S. Co.
v. M/V Nordic Regent (2d Cir.) 654 F.2d 147, 154, cert. denied,
(1980) 449 U.S. 890, 101 S.Ct. 248, 66 L.Ed.2d 116, it is clear
that "[t]he balance must be even stronger when the plaintiff is
an American citizen and the alternative forum is a foreign