Federal Court Grants Forum Non Conveniens Dismissal Where U.S. Has “No Interest In Adjudicating” Property Damage Claims of Foreign Corporation Arising From Maritime Accident on the High Seas of Indian Ocean

The U.S. District Court for the Southern District of New York recently granted Mitsubishi Heavy Industries, Ltd.’s (“MHI”) Motion to Dismiss Hyundai Merchant Marine Co., Ltd.’s (“HMM”) Complaint on the basis of forum non conveniens.1 The litigation arose from the 2013 sinking of the M/V MOL COMFORT on the high seas of the Indian Ocean approximately 200-nautical miles off the coast of Yemen during a voyage from Singapore to Jeddah, Saudi Arabia and while carrying 4,382 containers of cargo. HMM, a slot charterer on the vessel, alleged property damage claims in excess of $22 million for the loss of containers owned or leased by HMM and filled with goods being transported on behalf of its various clients. A similar consolidated lawsuit involving nearly 200 plaintiffs is pending in Japan. HMM is the only potential claimant who elected to bring its lawsuit against MHI, the manufacturer of the vessel, in the United States alleging claims based on strict product liability and negligence theories.2

MHI, a Japanese corporation with its principal place of business in Tokyo, moved to dismiss the complaint filed by HMM, a South Korean corporation with its principal place of business in Seoul, on the alternative bases of forum non conveniens and lack of personal jurisdiction. HMM opposed the forum non conveniens motion, arguing that its participation in a contractual arbitration proceeding in New York with one of its cargo clients, Nike, as well as the presence of experts it had retained in the U.S. and potential witnesses who allegedly performed maintenance on a similar MHI-manufactured vessel in California established sufficient convenience of the forum. HMM also opposed MHI’s personal jurisdiction motion, arguing that the international activities of MHI and presence of its subsidiaries in the U.S. were sufficient to subject the parent company to general personal jurisdiction under either N.Y. C.P.L.R. § 301 or Fed. R. Civ. P. 4(k)(2).

Under the doctrine of forum non conveniens, courts in the Second Circuit engage in a three-step analysis considering: 1) the degree of deference properly accorded to plaintiff’s choice of forum; 2) whether the proposed alternative forum is adequate; and, 3) balancing the private and public interests implicated by the choice of forum.3 Further, the U.S. Supreme Court has advised that courts may grant forum non conveniens dismissal without first establishing whether the court has personal jurisdiction over the defendant.4

In a thorough and well-reasoned opinion the Honorable Judge Lorna G. Schofield granted MHI’s motion to dismiss on the basis of forum non conveniens, concluding that “[e]ach of the three relevant factors weighs in favor of dismissal to allow the parties to litigate in Japanese court,” mooting defendants alternative motion to dismiss on the basis of personal jurisdiction.

Regarding the first factor, the judge explained that considering the totality of the circumstances, the foreign plaintiff’s choice of forum was entitled to “little deference” primarily because the availability of witnesses and evidence weighed in favor of litigating in Japan. Likewise, the court held that the second factor favored dismissal as the court determined that Japan was an adequate alternative forum because MHI agreed to accept service of process there, Japanese law permits litigation of the subject matter, and MHI is already engaged in similar litigation in Japan. The court deemed HMM’s arguments that Japan was an inadequate forum “meritless.”

Finally, the court held that balancing private interests favored dismissal, especially considering the availability of witnesses and evidence located in Japan. It further held that the balance of public interests also favored dismissal because, aside from HMM’s New York arbitration with Nike (to which MHI is not a party) and the alleged repairs to a similar ship in California, “the Complaint is devoid of any connection to the United States or New York. U.S. (and particularly New York) courts have no interest in adjudicating this case. Japan, on the other hand, has a strong local interest in deciding this litigation. As Defendant points out, it is a Japanese entity and the Comfort was ‘designed, manufactured, inspected, tested and delivered in Japan, classified by a Japanese society, sold to a subsidiary of a Japanese company, and chartered and operated by a Japanese company.’”

The decision’s implications are not limited to the maritime context and apply equally to foreign corporations in all industries and the Court’s clear reasoning should serve as a strong deterrent to foreign corporate plaintiffs seeking to institute litigation against foreign corporate defendants for claims arising from foreign accidents with little connection to the United States.

MHI was represented by Marshall S. Turner, Diana Gurfel Shapiro and Michael Koueiter of Condon & Forsyth LLP.

1 Hyundai Merchant Marine Co., Ltd. v. Mitsubishi Heavy Indus., Ltd., No. 14 Civ. 7965 (LGS), 2015 WL 7758876 (S.D.N.Y. Dec. 1, 2015).

2 HMM had already commenced litigation in Japan against the vessel’s owner and operator, but had not filed suit against MHI in Japan electing instead to pursue its action against MHI in the S.D.N.Y.

3 See Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir. 2005).

4 See Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 432 (2007).