Case

Piper Aircraft Co. v. Reyno

Facts

The case was initiated upon the Plaintiffs taking legal actions against the Defendants from injuries
sustained in a plane crash in Scotland. The suit was applied by the Plaintiffs in US since liability law is
better for the Plaintiffs in the US than Scottish law. Forum of the case was removed from state court
to federal court, and subsequently transferred to the District Court of Pennsylvania. Defendants
applied for dismissal regarding the transfer under doctrine of forum non conveniens, arguing that
Scotland would be the better forum.

Issue

Should a case be dismissed on the grounds of forum non conveniens when all the witnesses and
evidence are in another country, the other country’s jurors would be more connected to the
problem, it is inconvenient to the parties to try the case in the jurisdiction where it was brought, and
the other country’s law will be applied?

Holding

Yes.

Reasoning

1. Rule

The central purpose of a forum non conveniens inquiry is to ensure the trial is convenient, and thus a
foreign plaintiff’s choice deserves less deference. A plaintiff's choice of forum would be interfered
with if an alternative forum has jurisdiction and the chosen forum would "establish oppressiveness
and vexation to a D out of all proportion to the P's convenience" or if the chosen forum is
"inappropriate because of considerations affecting the court's own administrative and legal
problems. " Despite the possibility of a change in substantive law as by transfer of forum, it should
not be given any substantial weight in forum non conveniens inquiry, as it would render the doctrine
virtually useless.

2. Application

Scotland is the better forum due to several factors, whereby all of the Defendants’ witnesses are in
Great Britain and Scotland has a substantial interest in the outcome of the case. In addition, the
argument of which where the law of the alternative forum is less favorable to Plaintiffs should not
be given any weighs. Plaintiffs can choose among many forums, and generally choose the most
favourable one. If they do not choose the most favourable but the action can be dismissed anyway,
it would not be proper. The application of dismissal by the Defendants is granted.
Case

Bank of India v. Gobindram Naraindas Sadhwani and Others

Facts

The plaintiff has initiated the suit against the defendants who had acted as guarantors of a line of
credit of ¥230,000,000 that the Osaka branch of the plaintiff had provided Sadhwanis (Japan), Ltd.
(SJL). The plaintiff argues that either Indian or Hong Kong law should apply based on the inferred
nature of the contract, while the defendants argue that Japanese law should be used for the
guarantee contract, based on the closest and most real connection.

Issue

Which law is the governing law of the guarantee contract, Japanese law or Indian/Hong Kong law?

Holding

Japanese law is the governing law of the contract.

Reasoning

1. Rule

The court should apply the governing law of the state that has the “closest and most real connection”
with the dispute, if the explicit or inferred intention as to the proper law is absent or unclear.

2. Reasoning

As the court was unable to discover any governing law that can be inferred form the guarantee
contract and surrounding circumstances, the court acknowledged Japanese law as the governing
system which has the “closest and most real connection”. First, the form of guarantee has typed
references to Yen, which is indicative of Japanese law being the common choice. Second, the place
of economic performance must be regarded as Japan. Thirdly, the most influential guarantor resides
in Japan; Lastly, the negotiations between the parties took place in Japan. Conclusively, the court
decided Japanese law as the governing law of the guarantee contract.
Case

Shell v R W Sturge

Facts

The Plaintiffs brought an action against the Defendants as to rescind their investment contracts
under Ohio securities law. Under the contract, there are forum selection clauses which gave
exclusive jurisdiction to the English courts, and the Defendants filed a motion to dismiss the action
for improper venue. The Plaintiffs argued that the forum selection clauses would deprive them of
their rights under Ohio securities law and that public policy outweighs the policies served by
enforcing the forum selection forums.

Issue

Whether the forum selection clause in the agreement should be enforced?

Holding

Yes

Reasoning

1. Rule

A forum selection clause in an international agreement should be enforced unless the plaintiffs can
clearly show that either the enforcement would be unreasonable and unjust or the clause was
invalid for such reasons as fraud and overreaching. Forum selection clauses are presumed to be valid
because they provide for orderliness and predictability.

2. Reasoning

It defies reason to suggest that a plaintiff may circumvent forum selection and arbitration clauses
merely by stating claims under laws not recognized by the forum selected in the agreement. A
plaintiff simply would have to allege violations of his country’s tort law or his country’s statutory law
or his country’s property law in order to render nugatory any forum selection clause that implicitly
or explicitly required the application of the law of another jurisdiction. A party’s solemn promise
could not be defeated by artful pleading. In addition, it was necessary for the plaintiffs to show that
Ohio public policy outweighs the policy of “supporting the integrity of international transactions”.