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November 27, 1996

MGN PENSION TRUSTEES et al., Plaintiffs, against MORGAN STANLEY TRUST CO., Defendants.

The opinion of the court was delivered by: GLASSER


 GLASSER, United States District Judge:


 This case arises out of financial transactions set in motion by the late English media magnate, Robert Maxwell ("Maxwell"). Before the Court is the motion of defendant Morgan Stanley Trust Co. ("MSTC" or "Morgan Stanley") to dismiss the case on the grounds of forum non conveniens. For the reasons set forth below, the defendant's motion should be granted.


 Plaintiffs are the trustees of five pension funds which were established to provide pensions for approximately 17,000 retired employees and their families of companies owned or operated by Maxwell (hereinafter referred to as "the Pension Funds" or the "Funds"). *fn1" The Funds were contributory plans, meaning that the employees were required to invest their own monies in them. MSTC is a New York corporation which served as global custodian for the Pension Funds' assets. From 1987 through 1992, MSTC was based in Jersey City, New Jersey, and from 1992 to the present it has been based in Brooklyn, New York. Jurisdiction is predicated upon diversity of citizenship.

 Maxwell owned approximately four hundred private companies and controlled two public corporations. After his death at sea on November 5, 1991, the plaintiffs were installed as trustees of the Pension Funds, replacing the previous trustees. The essence of their complaint is that during the months before Maxwell's death, MSTC transferred large amounts of securities owned by the Pension Funds to various banks for the benefit of Maxwell, or entities he controlled, to the detriment of the Pension Funds. The complaint also charges that MSTC allowed $ 100 million worth of the Pension Funds' securities to be sold without receiving or conserving the cash proceeds for the Funds' benefit.


 The LBI-MSTC Contract

 In or about June 1988, MSTC entered into a contract with London and Bishopsgate International Investment Management, plc ("LBI") pursuant to which MSTC agreed to take custody of securities beneficially owned by the Pension Funds worth approximately $ 116 million (the "Custody Agreement"). Compl. P 19. *fn2" LBI had been retained by a company called Bishopsgate Investment Management Limited ("BIM") to render investment advice concerning these pension fund assets, which BIM was holding for the Pension Funds. Id. Morgan Stanley promptly sold the securities as it was directed to do by LBI and a substitute portfolio of securities was "acquired and held in custody by Morgan Stanley. *fn3" Compl. PP 19-20. A direct computer link was set up between LBI in London and MSTC's office in New Jersey to facilitate communication concerning transactions involving the portfolio. Compl. P 21.

 Among other terms, the Custody Agreement provided that MSTC was to exercise reasonable care in the performance of its duties and was to make payments from the LBI portfolio only upon written instructions from LBI which specified the purpose for which the payment was to be made. Compl. P 22. Paragraph nine of the Custody Agreement reads as follows:

9. Eligible Securities held for the Customer's [LBI's] account will be transferred, exchanged or delivered by the Custodian [MSTC] or a Subcustodian, except as provided in section 10 hereof, only
(a) upon sale of such Eligible Securities for the account of the Customer and then only upon receipt of payment therefor;
(b) upon exercise of conversion, subscription, purchase or other similar rights represented by such Eligible Securities;
(c) in the case of warrants, rights or similar securities, upon the surrender thereof in the exercise of such warrants, rights or similar securities;
(d) for delivery in connection with any loans of securities made by the Customer, but only against receipt of any adequate collateral as agreed upon from time to time by the Custodian and the Customer;
(e) upon the termination of this Custody Agreement as hereinafter set forth; and
(f) for any other purpose upon receipt of explicit instructions of the Customer accompanied by evidence reasonably acceptable to the Custodian as to the authorization of such transfer, exchange or delivery.

 Comp. P 22(c).

 The MGPT and AGB Securities

 The first assertion of improper conduct alleged by plaintiffs concerns securities beneficially owned by plaintiffs Mirror Group Pension Scheme and AGB Pension Scheme. On or about October 1, 1991, securities owned by the Mirror Group Pension Scheme in 102 companies were delivered to MSTC and held in an account in the name of MGPT ("the MGPT Securities"). Comp. P 39. At the same time, securities owned by the AGB Pension Scheme in 60 companies were delivered to MSTC and held in an account in the name of AGBT ("the AGB Securities"). Compl. P 40. MSTC opened accounts for both sets of these securities with Midland Bank as sub-custodian. Compl. P 41. According to the complaint, MSTC transferred the MGPT and the AGB securities to Swiss Volksbank as collateral for a loan that Swiss Volksbank made to Robert Maxwell Group plc ("Robert Maxwell Group"), a company operated by Maxwell, in disregard of the fact that these shares belonged to two of the Pension Funds. Compl. PP 43.

 After the Swiss Volksbank loan was repaid, MSTC made a similar transfer. Between October 23, 1991 and November 26, 1991, it caused 89 of the MGPT securities, worth approximately $ 21.5 million, and the AGB securities, worth approximately $ 8.7 million, to be used as collateral for the benefit of Credit Suisse, another bank which had agreed, if adequate stock were delivered, to release cash collateral it was holding in connection with a loan it had made to Robert Maxwell Group. Compl. PP 45, 52, 57. MSTC allowed the securities belonging to these two funds to be so used without notifying the Funds' trustees and without receiving adequate consideration or collateral for the Funds which owned the shares. Compl. P 49. Following ...

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