Court Denies Forum Non Conveniens Dismissal Despite Suggestion of Non-Enforceability in Non-U.S. Forum

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[author: Louis M. Solomon]

Airflow Catalyst Systems, Inc. v. Huss Technologies GmbH, Case no. 11-CV-6012 (W.D.N.Y. 2011), presents an interesting application of the judge-made rules of forum non conveniens.  The topic is an ever-present one in international litigation (see our discussion of forum non conveniens in our e-book, International Practice: Topics and Trends).

Airflow is a U.S. entity; Huss is German.  The business dispute is over defective cement substrates for use in manufacturing catalytic converters.  The operative agreements contained neither a choice of forum nor choice of law clause.  To support a change of forum to Germany, the defendant argued, among other things, that the

Defendant is located in Germany, and it manufactured and shipped the subject product in Germany; 2) [Plaintiff]traveled to Germany prior to executing the contract; 3) pursuant to the contract, purchase orders were to be emailed to Defendant in Germany; 4) payment was made through a German bank; 5) three of Defendant’s anticipated witnesses are located in Germany; 6) some of the unshipped product remains in Germany; 7) German law should apply to this dispute; and 8) judgments are executed in Germany through a separate court proceeding, and there is a possibility that a German court might refuse to enforce a judgment against Defendant, if it is found that this Court did not have jurisdiction.

The first seven issues are much more common — and a competent corporate lawyer or draftsman could have anticipated them and made provision for the issue of choice of law/forum in the operative contract.  With respect to the eighth issue, however, the Defendant offered a German law expert to opine that there was a possibility that a U.S. judgment would not be enforced by a German court.  The Court did independent research into the question (saying that the parties had not briefed the issue) and cited numerous instances where doubts have been raised about whether a German court would enforce a U.S. judgment.  Under Fed. R. Civ. P. 44.1, the Court was permitted to do independent research (a topic we have posted on frequently, for example, here), and wasn’t required to credit the defendant’s German law expert.  On analysis, the Court found the proof inconclusive and was unwilling to dismiss the case on that ground.

Posted in Adjudication, International Practice | Tagged

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