Agreement. Among other things, the Global Settlement Agreement contains a release of claims of CIL against BBMB. BBMB contends this settlement agreement provides a complete defense to Plaintiff's claims. The persons who signed this agreement reside in Hong Kong and Malaysia.
There will be unavoidable inconvenience regardless of the eventual forum. While Plaintiff's sources of proof are in the United States, Defendants' sources of proof are in Hong Kong and other foreign countries. Both parties have witnesses who cannot be compelled to appear in the alternative forum. The cost of transporting witnesses will be enormous for either side. In sum, the private interests do not balance in favor of either party When private interests do not favor either party, the Court must determine whether the public interest favors trial in a foreign forum. Friends for All Children v. Lockheed Aircraft Corp., 230 U.S. App. D.C. 325, 717 F.2d 602, 606 (D.C.Cir. 1983) (citing Pain v. United Technologies Corp., 205 U.S. App. D.C. 229, 637 F.2d 775, 784 (D.C.Cir. 1980), cert. denied, 454 U.S. 1128, 71 L. Ed. 2d 116, 102 S. Ct. 980 (1981)) ("If the trial judge finds the balance of private interests to be in equipoise or near equipoise, he must then determine whether or not factors of public interest tip the balance in favor of a trial in a foreign forum.")
C. Public Interest Factors
After considering the private interest factors, the Court must weigh the public interest factors. This is especially important given that the private interests do not balance in favor of either party. Public interest factors include: "court congestion, the local interest in resolving the controversy, and the preference for having a forum apply a law with which it is familiar." Contact Lumber, 918 F.2d at 1452.
Plaintiff suggests that there is considerable local interest in resolving this controversy in the United States because the conspiracy to defraud the Plaintiff of the value of its shares involved a scheme to defraud public officials in the United States, the sale of United States property, and the involvement of United States attorneys.
Plaintiff's argument strays from the gravamen of its complaint: injury to the shareholders of a Bahamian corporation. The fact that the alleged injury involved United States property does not change the nature of Plaintiff's claim. If the property were located in Canada or elsewhere, the injury to Plaintiff would be the same -- the diminished value of its shares. Furthermore, none of the parties to this suit is a citizen or resident of the United States. The public officials allegedly defrauded are not parties to this suit and will not benefit from the outcome. Plaintiff does not allege injury or damage to any United States real estate. Nor does Plaintiff allege any injurious effect on any of the United States subsidiaries that were indirectly involved in the sales transaction. In short, the United States has little, if any, interest in resolving this dispute.
In contrast, Hong Kong has a much greater local interest in resolving this suit. The complaint asserts injury to a shareholder in a Hong Kong company as a result of an alleged conspiracy between a Hong Kong majority shareholder and Malaysian parties. The alleged conspiracy involves three Hong Kong companies and a Liberian company and relates to the sale of shares in and debt of three Hong Kong and one Netherlands Antilles companies. The transferor of the shares, CIL, is subject to the overall supervision of the Supreme Court of Hong Kong, in connection with the liquidation of CIL.
Moreover, the collapse of CIL and its related companies has been a matter of intense public interest in Hong Kong, giving rise to various criminal and civil legal proceedings. A criminal trial against George Tan, BBMB's alleged co-conspirator in this action, was scheduled to commence on June 16, 1992 in Hong Kong. Phillips Supp. Decl., P 19. In that action, the Crown in Hong Kong charges, inter alia, that Mr. Tan bribed an officer of Barclays Asia/West with a gift of shares in CIL to a Sinclair (Nominees) Limited, the original Plaintiff in this lawsuit. Phillips Supp. Decl., P 19. Thus, the Tan criminal trial will concern whether Sinclair obtained shares in CIL by a bribe. In light of these factors, Hong Kong has considerably more interest in resolving this suit than does the United States.
In addition to local interest considerations, there is a preference for having a forum apply a law with which it is familiar. The agreement authorizing the sale of the United States assets for inadequate compensation is expressly governed by Hong Kong law. Plaintiff maintains that the agreement's choice of law provision is irrelevant because Plaintiff seeks to rescind the agreement, not to enforce it. However, assuming arguendo that the choice of law provision is not enforced, Hong Kong law remains applicable in certain circumstances. For example, because CIL is a Hong Kong corporation, the substantive law of Hong Kong will govern the claim for breach of fiduciary duty. Defendants' Motion to Dismiss for Lack of Standing raises the choice of law issue regarding the minority shareholder's capacity to sue directly, rather than by a shareholder's derivative suit. Invariably, issues of Hong Kong law will continue to recur.
Plaintiff further argues the United States courts are more competent to decide questions of United States federal law, such as the RICO claim. Admittedly, United States courts are more competent to decide the RICO claim. However, if the RICO claim is unavailable in Hong Kong, the argument is moot. As discussed previously, the possible unavailability of a RICO claim in Hong Kong does not preclude a forum non conveniens dismissal. Lockman, 730 F.2d at 769.
In view of the local interest considerations of the Hong Kong forum, the limited interest of the United States, and the recurrence of Hong Kong law, the public interest favors dismissal.
In summary, the balance of private and public interest factors favor trial in a foreign forum. Although the private interests are in equipoise or near equipoise, the public interest clearly tips the balance in favor of a trial in a foreign forum. Hong Kong is an adequate alternative forum because Defendant BBMB is amenable to process there and the individual Defendants have consented to the jurisdiction of the Hong Kong courts.
Accordingly, IT IS HEREBY ORDERED that:
(1) Defendants' Motion to Dismiss on Grounds of Forum Non Conveniens is GRANTED; and
(2) Defendants' Motion to Dismiss for Lack of Standing is DENIED, as being moot.
Dated: February 18, 1993.
Stanley A. Weigel