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Application of the Doctrine forum non conveniens in the

perspective of Multinational Enterprises


Puja Soni
I would like to express my deepest and sincere heartfelt gratitude to Dr. Steve Foster, Principal
Lecturer in Law at the Coventry Law School and Mr. Sukhninder Panesar, Associate Head of Law at
the Coventry Law School for their unflinching support and assistance.
Abstract
Forum non conveniens is a common law doctrine and a part of private international law. The
doctrine has repeatedly confirmed to be a major barrier for the plaintiffs to bring a suit in the
court, whilst it is a weapon of argument for the defendant. Although, it has limited application
in the United Kingdom: common law country because the UK has signed the Brussels
Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial
Matters 1968. In the perspective of the multination corporations (MNCs), the courts often
invoked this doctrine as it is evident form an infamous Indian case: In re Union Carbide
Corporation Gas Plant Disaster. However, recent developments have made it feasible to hold
MNCs liable for the wrongs committed in the country of its subsidiaries.
Introduction
The doctrine forum non conveniens is a renowned dogma of private international law that gives the
court a discretionary power to disallow or stay cases whenever the court would be unsuitable. The
doctrine is beneficial for the defendants, whereas unfavourable for the plaintiffs. As an era of
globalization and modern economy is emerging; there is an augmentation of multinational enterprises
(MNCs). The doctrine, as applied in the context of multinational enterprises, proves to be a barrier for
accountability of the parent company in the home countries for the acts committed in the host country.
However, several painstaking attempts are being made to resolve this problem and to regulate the
conduct of MNCs. Nevertheless, such efforts remain unproductive due to the lack of their mandatory
character.
In this context, this paper is divided in three substantial segments. First part explores the origination,
basic principle, and the reason behind this doctrine along with the help of few cases. Second part
provides an outline of multinational companies together with the relationship between parent and its
subsidiary company. At the end of this part the doctrine of forum non conveniens is examined in
respect of multinational companies with the help of case law. Third part examines the recent trend in
the growing global economy. At the end a conclusion is drawn together with the overview of various
regional and international organizations codes of conduct regulating multinational companies.
Doctrine forum non conveniens
1

The doctrine forum non conveniens is a well recognized judge-made doctrine of private international
2
law (conflicts of laws). Private international or conflict of laws is that part of law where the courts are
faced with the issues concerning a foreign presence.3 This doctrine gives the trial courts a
discretionary power to stay or to refuse cases whenever the forum or court would be inappropriate.4
This doctrine is a defence for the defendant and obstacle for the plaintiff. The doctrine was originated

B.A. (Hons), LL.B., LL.M. (UK), Advocate.

Blumberg, P.I. Accountability of Multinational Corporations: The Barriers presented by concepts of the corporate jurisdical
entity (2000-2001) 24 Hastings Intl & Comp. Rev. 297, at p. 299. See also Barrett, M. E.L. The Doctrine of Forum Non
Conveniens (1947) 35 (3) Cal. L. Rev. 380, at p. 386; Collier, J.G. Conflict of Laws (2nd ed. Cambridge 1994), at p.81.

For commentary see Dimatteo, L. A. The Law of International Business Transactions (1st ed. Thomson Learning 2003), at
p.101, 103.

North, P.M. and Fawcett, J.J. Cheshire and Norths International Law (13th ed. Butterworths 1999), at p. 3.

Voth v. Manildra Flour Mills Pty Ltd (1991) 171 CLR 538.

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in Scotland5 and is well recognized in various common law countries, such as, United Kingdom6 and
7
the United States. For example, in UK this doctrine in for the first time affirmed by Lord Goff in
8
Spiliada Maritime Corpn v Cansulex Ltd. The basic notion behind this doctrine is that a stay will only
be granted on the ground 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
9
of justice. However, to invoke this doctrine the defendant has to show firstly that there is another
available forum, which means available in practice to this plaintiff to have his dispute resolved.
Secondly, the defendant has to show that the other available forum is clearly and distinctly more
appropriate than the English forum.
However, it is difficult to invoke this doctrine in England by virtue of section 49 of the Civil Jurisdiction
and Judgment Act 1982,10 which states that this doctrine may be applied where it is not inconsistent
with the Brussels Convention.11 This Act was enacted to implement the Brussels Convention in the
12
domestic law as UK is a Contract State of this Convention. It is suggested that in two situations this
doctrine cannot be invoked. Firstly, when the Convention is applicable, that is the matter is not within
the scope of the Convention.13 Article 1 declares that This Convention shall apply in civil and
commercial matters whatever the nature of the court or tribunal. The expression civil and commercial
matters, however undefined under the act, does not include revenue, customs or administrative
14
matters. Secondly, when the jurisdiction had been allocated to England by virtue of article 2 the
Convention there was no discretionary power to stay the proceedings.15 Article 2 of the Convention
states that persons domiciled16 in a Contracting State shall, whatever their nationality, be sued in the
courts of that State. However, in terms of article 4 the doctrine can be operated, even where the
alternative forum is another Contracting State.17According to article 4 of the Convention, jurisdiction is
determined by the law of each Contracting State. English law of jurisdiction includes the discretion to
stay on the ground of the doctrine.
Multinational Enterprises and the Doctrine
One of the vital developments in the world economy nowadays is the augmentation of Multinational
enterprises.18The term Multinational enterprises or transnational corporations, was coined in 1960,19
is an entity whose transactions can span several continents and establish contacts with many
20
nations. It can be defined as enterprises which own or control production or service facilities outside

Anton, A.E. and Beaumont, P.R. Private International Law (2nd ed. W. Green 1990), at pp. 212-218. See also North, P. and
Fawcett, J.J. Cheshire and Norths Private International Law (13th ed. Butterworths 1999), at p.334.

Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460. See also Connelly v RTZ Corn plc [1998] AC 854, HL.

Leflar, R.A.; McDougal, L.L.; Felix, R.L. American Conflicts Law (4th ed. Lexis Law Pub 1986), at pp. 152-156; Gulf Oil Corp v
Gilbert 330 US 501 (1946); Piper Aircraft Co v Reno 454 US 235 (1981). See also Nygh, P. The Liability of multi-national
corporations for the torts of their subsidiaries (2002) EBOLR 51, at p. 58.

[1986] A.C. 460.

Ibid., at pp. 476-478.

10

See Civil Jurisdiction and Judgments Act 1991.

11

Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968. See also
Laguna Convention on Jurisdiction and the enforcement of Judgments in Civil and Commercial Matters 1988; North, P. And
Fawcett, J.J. Cheshire and Norths Private International Law (13th ed. Butterworths 1999), at p.262-268.

12

Part 1 of the Act 1982.

13

North, P. And Fawcett, J.J. Cheshire and Norths Private International Law (13th ed. Butterworths 1999), at pp.189-195.

14

Re State of Norways Application [1987] QB 433, at pp. 473-474, affd in Re State of Norways Application (Nos 1 &2) [1990]
1 AC 723, HL; Short v British Nuclear Fuels plc [1997] I L Pr 747, Irish Supreme Ct.

15

S & W Berisford plc v New Hampshire Insurance Co [1990] 2 QB 631; Arkwright Mutual Insurance Co v Bryanston Insurance
Co Ltd [1990] 2 QB 649. See also Re Harrods (Buenos Aires) Ltd [1992] Ch 72.

16

Section 41 of the Act 1982. See also Chapter 5 in Collier, J.G. Conflict of Laws (2nd ed. Cambridge 1994), at pp. 40-63.

17

Sarrio SA v Kuwait Investment Authority [1997] 1 Lloyds Rep 113.

18

Harrison, A.; Dalkiran, E.; Elsey, E. International Business (1st ed. Oxford 2000), at p. 50.

19

Hotchkiss, C. International Law for Business (1st ed. McGraw-Hill 1994), at p.256.

20

Bulova Watch Co. v. K. Hattori & Co., 508 F. Supp. 1322 (E.D.N.Y. 1981), at p. 1333

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the country in which they are based.21 In other words, multinational enterprises (MNE) involves of a
22
parent company in the home country and foreign affiliates located in host countries. Multinational
23
companies are firms with important foreign direct investment (FDI) assets. FDI can be defined as a
form of equity investment which gives the investing firm control over its assets, property and
subsidiaries in the host country.24
The impact of MNEs can be positive and negative depending on the country and industry in which
25
they operate. However, it can make positive contribution to the host country by transferring
resources in the form of capital, technology know-how, managerial skills that would otherwise not be
available in the host country. 26 Moreover, it will bring directly to income and employment opportunity.
This can be well understood with the help of foreign direct investment in Venezuelas Petroleum
Industry. 27 In 1991 Venezuela governments began to open its oil industry to foreign investors.
Countrys government recognized that the countrys state owned oil company, Petroleos de
Venezuela SA (PDVSA) lacked capital, technology resources, skills, and management techniques of
many of the worlds major oil companies. Consequently of such planning countrys oil output was
reached 3.5 million barrels per day in 1997, which was very high as compared to 1.7 million barrels
per day output in 1985. In contrast, MNEs is regarded as a sinister threat to the sovereignty of the
host country.28 Also, MNEs transmit cultural changes into the host country. For instance, McDonalds
arrival in Moscow in 1990s heralded a completely new concept in the food industry, which significantly
29
altered the eating habits of Muscovites. Moreover, there is an adverse effect on local competition.
This is particularly happened when foreign companies acquire or merge more than two firms in a host
country. For example, in India, Hindustan Lever Ltd., the Indian subsidiary of Unilever acquired
several local companies along with Tata Oil Mills. For instance, the ice cream makers Milkfood and
Kwality. By merging all these companies, Hindustan Levers share of the Indian Ice cream market
went from zero in 1992 to 74 percent in 1997.30 Nevertheless, it is argued that there is little evidence
that such developments are widespread.31 On the other hand, FDI bring benefits to home country, for
instance, many countries have eliminated double taxation of foreign income in order to encourage
domestic firms to undertake FDI.32 Moreover, governments of few countries (Britain and France) offer
incentives to foreign companies to invest in their countries.33
Furthermore, MNEs wishing to enter a foreign market through direct investment must establish a
foreign element. This requires the creation of subordinate entities, such as representative offices,
34
agencies, branches, joint ventures, and holding companies. However, one of the important methods
of making a FDI through MNEs is to incorporate a new business entity or subsidiary.35The foreign
subsidiary is a foreign corporation organized under the laws of a foreign host country, but owned and

21

Dicken, P. Global Shift: The Internationalization of Economic Activity (2nd ed. Sage Publications 1992), at p. 47-48; Weekly,
J.K. and Aggarwal, A. International Business: Operating in the Global Economy (1st ed. Thomas Learning 1987), at p. 311.

22

Schaffer, R.; Agusti, F.; Earle, B. International Business Law and Its Environment (7th ed. South Western Educational
Publishing 2008), at p. 20.

23

Schaffer, op. Cit., note 21, at p.19.See also Mevorach, I. The Home Country of a Multinational Enterprise group facing
insolvency (2008) ICLQ 427, at p. 429-430.

24

Panesar, S. Regulating Foreign Direct Investment (2006) CLJ 35.

25

Harrison, A.; Dalkiran, E.; Elsey, E. International Business (1st ed. Oxford 2000), at p.47.

26

Hill, C.W.L. Global Business Today (6th ed. McGraw-Hill 2010), at p. 256.

27

Hill, C.W. Global Business (McGraw-Hill 2002), at p. 210.

28

Harrison, op. Cit., note 17, at p.48.

29

Ibid., at p. 49.

30

United Nations, World Investment Report, 2000. See also Hill, C.W.L. International Business: Competing in the Global
Marketplace (7th ed. McGraw-Hill 2009), at pp. 260-261.

31

Ibid., Hill, C.W.L., at p. 260.

32

Ibid., at p.263.

33

Ibid., at p. 264.

34

August, R. International Business Law: Text, Cases, and Readings (3rd ed. Prentice Hall Pubication 2000), at p.197; Schaffer,
Agusti, Earle, op. Cit., note 21, at p. 21.

35

Hotchkiss, op. Cit., note 18 , at p. 271.

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controlled by the parent corporation in the home country.36 As a general rule, a home state regulates
37
the parent companies and host states regulate the subsidiaries. This is because the subsidiaries are
regarded as a distinct legal entity with separate juridical status from that of parent company by virtue
of the ruling in Saloman v Saloman & Co Ltd.38 This concept of separate legal entity will generally
insulate the parent company from liability for acts committed by the subsidiary, unless there are
39
grounds for piercing the corporate veil. Piercing the corporate veil refers to the judicially imposed
40
exception to the above principles. In other words, a corporate veil is said to exist over each separate
company and the courts are unwilling to lift this corporate veil on the basis of equity.41 Moreover, this
concept of separate entity is simply based on the fact that, each nation assert exclusive jurisdiction
42
with its territory under territorial principle. Therefore, the conduct of firms within the border of a state
43
is subjected to local jurisdiction. Conduct within a sovereigns territory will subject the entity chartered
or doing business within its borders to local jurisdiction. Thus, branch and subsidiary is subject to local
jurisdiction under the territory theory and parent company is not liable for the acts of its subsidiaries.
In such a situation defendant from parent company can take the defence of the doctrine forum non
conveniens.
However, many nations assert jurisdiction beyond the territory, for example, United States. US
asserts extraterritorial jurisdiction on the basis of two tests: nationality principle44 and effect test
45
principle.
US assert such jurisdiction extraterritoriality in order to regulate the conduct of its
nationals abroad. This principle also applies to the juristic person, that is multinational corporations.
However, to ascertain the nationality of subsidiary is a debatable question. The answer to this
question lies in the ground-breaking decision of an international Court of Justice (ICJ) in Barcelona
46
Traction case, where nationality principle, of United States, which was based on effect control test,
is replaced by place of incorporation test or domicile principle. In this case, Barcelona Traction, Light,
and Power Co. was incorporated in 1911 under Canadian law for the purpose of supplying electricity
in Spain.47It had formed a numbers of subsidiary corporations under Canadian and Spanish law. After
World War I, the majority of the stock was controlled by Belgium nationals. As a result of the Spanish
Civil War in 1936 the company found it very difficult to make bond payments to the bondholders. In
1948 the bond holders obtained a petition for bankruptcy and a Spanish court authorised seizure of
the assets of the company. The Canadian courts refused to recognise the validity of the bankruptcy
proceedings and Canada and Belgium commenced proceedings in the ICJ alleging breaches of
international law by Spain. The ICJ held that the very nationality of the Barcelona Company itself
should not be held to be Belgium rather than Canadian.48 This domicile principle is incorporated in
England under section 42 of the Civil Jurisdiction and Judgment Act 91982). This provision states that
a company is domiciled in the UK either if it is incorporated or formed under the law of part of the UK

36

Schaffer, op. Cit., note 21, at p. 21. See also Folsom, R.H.; Gordon, M.W.; Spanogle, J.A.; Fitzgerald, P.L. International
Business Transactions: A Problem-Oriented Coursebook ( 9th ed. Thomson West 2006), at p. 939.

37

August, R.; Mayer, D.; Bixby, M. International Business Law: Text, Cases, and Readings (5th ed. Pearson Prentice Hall
2009), at p.184.

38

[1897] A.C. 22 (HL). See Folsom, R.H., op. Cit., note 35, at p. 939; Ibid., August, note 36, at p. 198.

39

Hotchkiss, op. Cit., note 18 , at p. 272;

40

Thompson, R.B. Piercing the Corporate Veil: An Empirical Study (190-1991) 76 (5) Cornell L. Rev. 1036.

41

Panesar, S. Regulating Foreign Direct Investment (2006) CLJ 35, at p. 37. See also Browmer, S. To pierce or not to pierce
the corporate veil-Why substantive consolidation is not an issue under English Law (2000) JIBL 193, at p.194.

42

Raustiala, K. The Geography of Justice (2005) 73 Fordham L.Rev.2501, at p. 2509. See also Parrish, A. The Effect Test:
Extraterritorialitys Fifth Business (2008) 61 Vand. L. Rev. 1455, at p. 1464.

43

Op.cit., Panesar, S., note 41.

44

Jennings, R.Y. Extraterritorial Jurisdiction and the United States Antitrust Laws (1957) 33 Brit. Y.B. Intl L. 146, at p. 153.

45

Turley, J. When in Rome: Multinational Misconduct and the Presumption against Extraterritoriality 91989-1990) 84 (2) N.Y.U.
L. Rev. 598, at p. 610.

46

[1970] IC.J. 4.

47

2 December. For commentary see Rodley, N.S. Corporate Nationality and the Diplomatic Protection of Multinational
Enterprises: The Barcelona Traction Case (1971-1972) 47 (1) Ind. L.J. 70, at p. 72; Briggs, H.W. Barcelona Traction: The Jus
standi of Belgium (1971) 65 (2) Am. J. Intl L. 327.

48

Case Concerning the Barcelon Traction Light and Power Co Ltd., (Belgium v. Spain), Second Phase [1970] IC.J. 4, at p. 83.
See also Higgins, R. Aspects of the Case Concerning the Barcelona Traction, Light and Power Company, Ltd (1970-1971) 11
(3) Va. J. Intl L. 327, at p.337.

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and has its registered office or some other official address in the UK or if its central management or
control is exercised in the UK.
The doctrine of Forum non conveniens in the context of multinational enterprises was invented to
solve the inconvenience caused by international forum shopping. As previously mentioned, when
some countries assert jurisdiction extraterritorial, it gives an option to the plaintiff to bring cases in
more than one country. Plaintiff will choose that forum where it can seek more favourable damages
against parent company and therefore it created an environment which is easily subjugated by such
forum shopping.49 It is noteworthy to mention In Re Union Carbide Corporation Gas Plant Disaster at
Bhopal in 1987.50 In this case, thousands of people were killed and hundreds of thousands of people
were injured or permanently disable by the release of a lethal gas known as methyl isocyanate from a
chemical plant operated by Union Carbide India Limited (UCIL) in Bhopal, India, in 1984.51 In April
1985, the Indian government filed a complaint in New York on behalf of injured victims. Indias
decision to bring such suit in the US is based on the fact that the Indian courts did not have
52
jurisdiction over Union Carbide Corporation (UCC), the parent company. The District court
dismissed the action on the ground of forum non conveniens holding that the US courts were an
inconvenient forum. Justice Kenney in its judgment stated that The doctrine of forum non conveniens
is a rule of U.S. law, which states that, to further the administration of justice, where a case is properly
heard in more than one court, it should be heard by the one that is most convenient. The district court
dismissed the action on the condition that UCC submit to the jurisdiction of the Indian courts. The trial
court decision was upheld on appeal by Circuit judge Mansfield who explained that the vital parts of
the Bhopal plant, including its storage tank, monitoring instrumentation, and vent gas scrubber, were
manufactured by Indians in India. The vast majority of plant employees were selected and trained by
UCIL in Bhopal. Moreover, the vast majority of material witnesses and documentary proof bearing on
causation of and liability for the accident is located in India, not the United States.
Recent Changes in global Economy
However, there are few industrialized countries in the global economy, where it is possible for
claimants from host countries to hold MNCs legally accountable in home countries for the acts
committed in host country.53 In other words, the doctrine does not prove to be a barrier for
accountability of parent company in few developed countries. For instance, In the United States,
actions can be brought by foreign citizens against United States citizens under the Alien Claim Tort
Act 1789 (ATCA). The ATCA states that "The district courts shall have original jurisdiction of any civil
action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United
54
States". Thus the ATCA provides the way to hold MNCs accountable for human rights violations and
55
environmental violations. In 1997, in a ground-breaking decision in an action against Unocal
56
Corporation, a US District Court held that the jurisdiction over the plaintiffs claims existed under the
ACTA and thus rejected Unocals attempt to dismiss the claims on the ground of forum non
conveniens. In this case, plaintiffs from the Tenasserim region of Burma brought class actions against

49

Dorward, D.J. Forum Non Conveniens Doctrine and the Judicial Protection of Multinational Corporations from Forum
Shopping Plaintiffs (1998) 19 (1) Pa. J. Intl Eco. L. 141.

50

(1987) 809 F. 2d. (2d. Cir.).

51

In re Union Carbide Corp. Gas Plant Disaster, 634 f. Supp. 842 (S.D.N.Y. 1986), at p.844.See also Nandu, V.P. For Whom
the Bell Tolls in the Aftermath of the Bhopal Tragedy: Reflections on Forum Conveniens and Alternative Methods of Resoling
the Bhopal Dispute (1986-1987) 15 (2&3) Dem. J. Intl L. & Poly 235; Rogge, M.J. Towards Transnational Corporate
Accountability in the Global Economy: Challenging the Doctrine of Forum Non Conveniens in In re: Union, Alfaro, Sequihua,
and Aguinda (2001) 36 (2) Tex. Intl L.J. 299.

52

See also Bhopal Gas Disaster Act, 1987. For commentary see Schaffer, R.; Agusti, F.; Earle, B., op. Cit., note 21, at p. 27;
Seward, A.C. After Bhopal: Implications for Parent Company Liability (1987) 21 (3) Intl L. 695, at p. 696.

53

Ward, H. Governing Multinationals: The Role of Foreign Direct Liability The Institute of International Affairs Briefing Paper No.
18 February 2001.

54

28 U.S.C. 1350.

55

Sacharoff, A.K. Multinationals in Host Countries: Can they be held liable under the Alien Tort Claims Act for Human Rights
Violations? (1997-1998) 23 (3) Brook. J. Intl L. 927,at p. 937.

56

Doe v Unocal Corp.Inc., 963 F. Supp. 880 (C.D. Cal 1997). For commentary see Shaw, C. Uncertain Justice: Liability of
Multinationals Under the Alien Tort Claims Act 92000-2001) 54 (6) Stan. L. Rev. 1359, at p. 1370; Habertroh, J. The Alien
Tort Claims Act and Doe v UNOCAL- A Paquete Habana Approach to the Rescue (2003-2004) 32 (2) Denv. J. Intl L & Poly
231, at p. 251.

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the Burmese Government and an American oil company (Unocal) which had entered into a joint
venture for the construction of a gas pipeline in Burma. The plaintiffs argued that the government and
the oil company had conspired and acted in violating international law; police and military forces had
used violence in relocated whole villages as well as forcing farmers into working for the oil company.
The plaintiffs alleged serious violations of international law and human rights in the form of assault,
rape, forced labour and the loss of their homes and property. The district court held that jurisdiction
over the plaintiffs claims existed under the Alien Tort Claims Act 1789 and thus rejected Unocals
attempt to dismiss the claims. On appeal, however, Judge Ronald S.W. Lew granted defendant
Unocals motion for summary judgment,57 thereby dismissing claims brought by fifteen Burmese
58
villagers under the ATCA.
Similarly, in Aguinda v. Texaco, Inc.59 approximately 13,000 plaintiffs were seeking compensation,
punitive damages, and equitable relief for contamination of the Ecuadorian Amazon region and for
personal injuries in the district court of New York.60. The plaintiffs, Ecuadoran citizens, contended that
operations of a United States-bases oil company, defendant Texaco, Inc. (hereinafter Texaco),
caused harm to indigenous people living in the rain forest and to the property, and to the stability of
Amazon basin habitats..61 The defendant company has moved to dismiss the complaint on the ground
that the courts of the United States were an inconvenient forum for adjudicating such claims.
However, Judge Vincent Brodrick in its decision refused to dismiss the case on the ground of forum
62
non conveniens by holding that the case law appears to favour resolution of damage claims in
63
Ecuador. However, like previous case, when this case was appealed, Judge Rakoff dismissed the
case on the ground of forum non conveniens and comity of nations.64
Similarly, in United Kingdom there is recognized principle that parent company may owe a duty of
care to individuals in a foreign country who are injured by the acts of a subsidiary company.65 It is
noteworthy to mention two leading cases where this principle is adhered by the House of Lord. In
Lubbe v Cape Plc (No 2)66 the House of Lords allowed an appeal by employees employed by a
subsidiary company oil company of Cape Plc in South Africa that their multi party actions could be
commenced against the parent company in England. These employees had suffered personal injury
as a result of exposure to asbestos. However, in March 2003 an out of court settlement worth
approximately 10m was agreed with lawyers representing the injured South Africans. Similarly, in
67
Moses Fan Sithole v Thor Chemical Holdings Ltd, twenty one residents in South Africa commenced
proceedings against Thor Chemicals Holdings Ltd for injuries suffered as a result of exposure to
mercury by its subsidiary company (Thor Chemicals SA Ltd) operating in South Africa. The South
Africa subsidiary was primarily set up because of problems with the Health and Safety Executive in
England. The South African subsidiary was controlled by the Thor Chemical Holding in England and,
in particular, by the Chairman Mr Cowley. The case involved the requirement of disclosure of
documents and when these were duly ordered by the Court of Appeal, Thor Chemical Holdings Ltd
settled out of court.

57

Doe v. Unocal Corp. Inc., 110 F. Supp. 2d. 1294 (C.D. Cal. 2000), at p. 1312.

58

Ibid., at p. 1295.

59

No. 93-7527, 1994 WL 142006 (S.D.N.Y. 1994); Aguinda v. Texaco, Inc., 945 F. Supp. 625 (S.D.N.Y. 1996).See also ZiaZarifi, S. Suing Multinational Corporations in the U.S. for violating International law (1999) 4 (1) UCLA J. Intl L. & Foreign Aff.
81, at p. 99; Wiwa v Royal Dutch Petroleum Co., 226 F.3d.88 (2d Cir. 2000), cert, denied, 532 U.S. 941 (2001); Ramsey,
M.D. Multinational Corporate Liability under the Alien Tort Claims Act: Some Structural Concerns (2000-2001) 24 (3) Hastings
Intl & Comp. L. Rev. 361, at p. 362; Sacharoff, A.K., op. Cit., note, at p. 958.

60

No. 93-7527, 1994 WL 142006 (S.D.N.Y. 1994), at p.1.

61

Ibid., at p. 4-5.

62

Ibid., at p.1.

63

Ibid., at p. 2. See also Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981).

64

Ibid., at p. 627. See also Sequihua v. Texaco, Inc., 847 F. Supp. 61 (S.D. Texas 1994).

65

Panesar, S. Regulating foreign direct investment (2006) CLJ 35, at p. 39.

66

[2000]1 W.L.R. 1545.

67

[2000] WL 1421183.

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In contrast, in Connelly v R.T.Z. Corporation Plc.68 the court again affirmed the forum non
conveniens. In this case, plaintiff worked for four years in Namibia at a uranium mine operated by a
Namibian subsidiary of the defendant, an English company. Three years later plaintiff was found to be
suffering from cancer of the throat and underwent a laryngectomy. Plaintiff commenced proceedings
in England against the defendant for negligence on the ground that the plaintiff had contracted the
cancer as a result of the failure on the part of the defendant to provide a reasonably safe system of
work affording protection from the effects of uranium ore dust while plaintiff worked in the mine. The
defendant applied for an order staying the proceedings on the ground of that Namibia was the
appropriate forum for the trial of the action. It was held that the injury was sustained in Namibia, that
the principal witnesses of fact lived in Namibia, that expert witnesses would be drawn from Namibia
and elsewhere, that a site inspection of the mine would be necessary and that the Namibian courts
had the necessary expertise and effectiveness to ensure a fair trial.69 The judge further held that
Namibia was the jurisdiction in which the claim should be heard in the interests of all the parties and
for the ends of justice and stayed the proceedings.
70

Besides, various rules have been promulgated by various regional and international organizations
for regulating the conduct of multinational enterprises.71 For instance, at regional level codes of
conduct was initiated by Organization for Economic Cooperation and Development (OECD), adopted
72
by a group of 29 industrialized nations. The OECD Code consists of various Guidelines for
Multinational Enterprises which are adopted on June 21, 1976. Such Guidelines consists of
recommendations by OECD governments to MNEs on various categories, such as, completion,
taxation, employment and industrial relations, science and technology, and human rights.73 Similarly,
at international level, codes of conduct are developed prominently by the International Labour
Organization (ILO). The governing body of ILO set out various roles of conduct in Tripartite of
Principles concerning Multinational Enterprises and Social Policy which is adopted on 16 November
1977.74 However, one of the drawbacks with such codes of conducts is that they are voluntary in
character and not legally binding. Therefore, in the absence of legally binding codes of conduct it is
difficult for the litigants from host country to bring an action against parent company in home country.
Conclusion
It is, therefore, concluded that the doctrine forum non conveniens is used as a weapon by the
defendant in home country where the parent company is incorporated to oust jurisdiction Although
several efforts were made in this trend, but in the light of their universal rejection and non-binding
character , it is recommended that courts in the host country are the convenient forum to bring
actions against subsidiaries rather than host country as their proceedings are often thrown out on the
ground of forum non conveniens.

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Websites
http://heinonline.org (last accessed on 14.8.2011)
http://login.westlaw.co.uk (last accessed on 14.8.2011)

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