motion only where "the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all." Piper Aircraft, 454 U.S. at 254.
Plaintiff urges that the remedy offered by the alternative forum of the United Kingdom is unsatisfactory because at the heart of plaintiff's action are claims under federal securities laws. The fact that plaintiff's claims arise under federal law does not, however, make the United Kingdom a per se inadequate forum. See Allstate Life Insur. Co. v. Linter Group Ltd., 782 F. Supp. 215 (S.D.N.Y. 1992). Rather, it is one factor that this Court may consider in determining the adequacy of the alternative forum. Moreover, "some inconvenience or the unavailability of beneficial litigation procedures similar to those available in the federal district courts does not render an alternative forum inadequate." Borden Inc. v. Meiji Milk Products Co., 919 F.2d 822, 829 (2d Cir. 1990) (citation omitted), cert. denied, 500 U.S. 953, 114 L. Ed. 2d 712, 111 S. Ct. 2259 (1991).
Defendants have submitted an affidavit by a lawyer admitted to practice in England who avers that the English Courts allow rescission of contracts induced by misrepresentation and awards damages for fraudulent misrepresentation and for negligent misrepresentation. Further, if the plaintiff relied on misrepresentations made by Arida, plaintiff could claim that Paribas is vicariously liable in damages for his misrepresentations. Smith decl. PP 16-17. Moreover, plaintiff would have certain claims under the securities laws of the United Kingdom, including the rules of the Securities and Futures Authority, a self-regulating organization; violation of these rules provides a civil remedy in damages. Id. PP 18-23. Based on the affidavit of Mr. Smith, this Court is persuaded that an English forum applying English law would provide plaintiff with an adequate remedy.
For the foregoing reasons, the Court finds that an adequate alternative forum exists.
B. Plaintiff's Choice of Forum
Courts generally give deference to a plaintiff's choice of forum because it is assumed that a plaintiff will choose a convenient forum. See Piper Aircraft Co., 454 U.S. at 256 n.23. Where, however, the plaintiff is foreign, its choice of forum is entitled to less deference. Id.; Murray v. British Broadcasting Corp., 81 F.3d 287, 290 (2d Cir. 1996). Plaintiff attempts to bolster the presumption that his choice is convenient by citing authority for the proposition that although a foreign plaintiff's choice may be given less deference, a plaintiff can overcome this by making a strong showing of convenience.
Plaintiff has failed to show that the forum of the United States courts, let alone the United States District Court for the Southern District of New York, is at all convenient. Plaintiff is a Panamanian corporation with its principal place of business in Monaco; its sole shareholder is a Canadian citizen who resides for less than a majority of the year in Florida. Carr decl. P 2. Each of the defendants is foreign. The alleged fraud occurred both in England and by transatlantic communications while defendant was in England and plaintiff's shareholder was in Florida. Because the plaintiff fails to make any showing of convenience, its choice of forum is deserving only of "some weight." Murray, 81 F.3d at 290.
C. Private Interest Factors
1. Access to Source of Proof: Documents
Plaintiff argues that all of the documents are in the United States because they were faxed to him while he was in Florida. Defendants, on the other hand, contend that all of the documents relating to the investment account, Paribas, the Fund and plaintiff corporation itself are located overseas. In order to litigate the fraud claims, the parties inevitably will need to present to the court documents relating to the investment account held by defendant Paribas for EOC, the losses experienced by plaintiff corporation, and the Fund itself. These documents are located overseas and therefore weigh in favor of defendants' motion to dismiss.
Nevertheless, in light of technological advances in transportation and communication, this Court recognizes that the location of documents is a factor which is to be given less weight now, almost fifty years after the Supreme Court's initial listing of private interest factors in Gilbert. See Overseas Programming Co. v. Cinematographische Commerz-Anstalt, 684 F.2d 232 (2d Cir. 1982).
2. Compulsory Process for Unwilling Witnesses and Costs of Obtaining Willing Witnesses
Plaintiff contends the witnesses it will need are non-parties who participated in the sale or purchase of the unregistered securities in the United States. According to plaintiff, the fact that these witnesses could not be compelled to testify in England would result in prejudice to plaintiff. Nevertheless, this Court notes that these "witnesses" -- who are claimed to be other American investors who invested in the Fund -- have not yet been identified. The witnesses that have been identified are defendants' witnesses, including the bank employees who were witness to the transactions. Five of the defendants' witnesses could not be compelled to testify in the United States. See Baker supplemental decl. P 4.
All of the identified witnesses, with the possible exception of Carr, reside overseas.
Thus transporting witnesses from England to the United States -- even if they were within this Court's subpoena power or would appear voluntarily -- would be extremely inconvenient and would impose a prohibitive cost on defendants. See e.g., Scottish Air International, Inc. v. British Caledonian Group, PLC, 81 F.3d 1224, 1996 WL 197590, *8 (2d Cir. 1996). Furthermore, the Court of Appeals has recently affirmed the principle that live testimony of key witnesses is necessary "where the plaintiffs alleged that the defendants had conspired to defraud them." Id.
3. Forum Selection and Choice of Law Clauses
The Investment Agreement entered into by EOC and Paribas when EOC initially established its account with Paribas in October 1992 contains choice of law and choice of forum clauses. The Investment Agreement "this Agreement is governed by English Law. Disputes arising out of the Agreement shall be subject to the jurisdiction of the English courts to which for our benefit you submit." Baker decl. at P 7, exh. 1.
Parties dispute whether plaintiff's action "arises out of" the Investment Agreement that contains the forum selection and choice of law clause. In Medoil Corp. v. Citicorp, 729 F. Supp. 1456 (S.D.N.Y. 1990), the plaintiff had opened an account with defendant bank in Switzerland by a series of agreements which provided that Swiss law would govern all relations between defendant and plaintiff in a Swiss forum. Plaintiff's action alleged, inter alia, that it purchased certain securities using funds it had deposited into an account established with defendant because of false statements made by defendant's employees. The court found that this dispute was governed by Swiss law because the "action arises out of the relationship created when the parties signed the forms containing the forum-selection clause." 729 F. Supp. at 1458. See also Scherk v. Alberto-Culver Co., 417 U.S. 506, 41 L. Ed. 2d 270, 94 S. Ct. 2449 (1974) (holding that controversies and claims "arising out of" a contract for the sale of a business covered securities violations related to that sale); Roby v. Corporation of Lloyd's, 996 F.2d 1353 (2d Cir. 1993) (rejecting, based on Supreme Court precedent, plaintiff's argument that only allegations of contractual violations fall within the scope of the forum selection and arbitration clauses), cert. denied, 510 U.S. 945, 126 L. Ed. 2d 333, 114 S. Ct. 385 (1993).
The facts of Medoil closely resemble the facts of the case at bar. Plaintiff EOC claims that defendants violated securities laws in connection with the sale of securities on an account established by the Investment Agreement which contains a forum selection clause. These claims "arise out of" the relationship between plaintiff and defendant Paribas which was established by the Investment Agreement.
Moreover, "it defies reason to suggest that a plaintiff may circumvent forum selection ... clauses merely by stating claims under laws not recognized by the forum selected in the agreement." Roby, 996 F.2d at 1360. Thus, the fact that plaintiff brings claims under the United States securities laws can not preclude the application of English law which both parties contemplated would govern. Furthermore, this Court recognizes the strong public policy in favor of forum selection clauses. See e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626, 87 L. Ed. 2d 444, 105 S. Ct. 3346 (1985). In light of the clear intention of the parties to be governed by English law in an English forum with respect to disputes arising from that agreement, this Court finds that English law must govern this case in an English forum.
E. Public Interest Factors
1. Court congestion
There would be little delay in either forum. In this Court, a date for trial would be set for shortly after the completion of discovery and determination of any further motions. In England, a date generally would be set for trial within six months after the completion of discovery. See Smith decl. at P 29.
2. Local Interest in Controversy
The United States does have an interest in affording United States citizens a forum, in enforcing its securities laws, and in preserving the integrity of markets for securities in the United States. See, e.g., Allstate, 783 F. Supp. at 225. In this case, none of the parties are United States citizens, nor are the securities issued by a United States corporation. And although "the United States courts have an interest in enforcing United States securities laws, this alone does not prohibit them from dismissing a securities action on the ground of forum non conveniens." Allstate Life Insur. Co. v. Linter Group Ltd., 994 F.2d 996, 1002 (2d Cir.), cert. denied, 510 U.S. 945, 126 L. Ed. 2d 334, 114 S. Ct. 386 (1993).
In fact, this case has little to do with New York or any other jurisdiction in the United States, except for the fortuitous presence of plaintiff's shareholder in Florida at the time of some of the purchases underlying this action. Rather, this case has a great deal to do with England: the trading was done with an account that was established in England at the London branch of defendant Paribas, a French bank; the trading was in securities issued by a Luxembourg company, managed by a Bahamian company, and solicited by a United Kingdom national who was employed by defendant Paribas. The United Kingdom has a substantial interest in determining whether a British citizen who was employed by the London office of a French bank fraudulently induced the purchase of securities in London. In light of the foreign nature of this case and the fraud alleged, the English courts have a greater interest in adjudicating this case than the United States courts.
3. Familiarity with Law:
In light of the forum selection clause and choice of law clause which designates English law as governing, an English court will have to decide a case brought by plaintiff under English law.
4. Other Factors
In light of the foreign nature of the transactions, the foreign plaintiff and the foreign defendant, this Court concludes that the case remaining before it is essentially foreign. The fact that the owner of the Panamanian corporation happened to be in Florida at the time of some of the purchases can not form the basis for local interest by United States courts, especially a court in the Southern District of New York. This Court is mindful that "jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation." Gulf Oil, 330 U.S. at 508. Thus, even giving plaintiff's choice some weight in the balance of factors, this Court concludes that because this forum is inconvenient to defendants out of all proportion to the convenience to the plaintiff, and because an adequate alternative forum exists for the adjudication of plaintiff's claims, dismissal of the case on the grounds of forum non conveniens is appropriate.
Because this Court lacks subject matter jurisdiction over plaintiff's claims, defendants' motion to dismiss on the grounds of lack of subject matter jurisdiction is hereby GRANTED. Even if subject matter jurisdiction were to be found, the Court would grant defendants' motion to dismiss on the grounds of forum non conveniens.
BARBARA S. JONES
United States District Judge
Dated: New York, New York
June 26, 1996