The inconvenience of forum non conveniens: State responsibility and denial of justice

The inconvenience of forum non conveniens: State responsibility and denial of justice

In certain cases, the wide discretionary nature of FNC dismissals amounts to an international wrongful act that needs to be resolved by equality for foreigners and residual grounds of jurisdiction.

Forum non conveniens (FNC) is a private international law doctrine. It originated in Scotland and is applied around the world, providing wide judicial discretion to courts to decide whether or not they will exercise jurisdiction. This assessment is made by consideration that the case brought before them is not sufficiently connected to the local justice system. Today, it continues to be applied to dismiss cases brought by foreigners.

Traditionally deemed as an exclusive common law doctrine against the lis abili pendens rule in civil law jurisdictions, the application of FNC greatly surpasses the common law territories of the globe. In reality, this doctrine - or similar staying-of-proceedings practice - is also applied, under narrower and stricter terms, in other jurisdictions like China and Japan in Asia or Venezuela and the Dominican Republic in Latin America. However, across the main common law jurisdictions of the globe, FNC is not restricted and is applied inconsistently due to its wide discretionary nature. This reality creates access to justice gaps and potentially, material injustice towards foreigners.

It is then of utmost importance to determine when and under which circumstances the application of FNC amounts to a denial of justice, a long standing rule of customary international law for the treatment of aliens. But it is equally relevant to analyse which treaty obligations are being breached by the forum court. In this sense, when a court has otherwise proper jurisdiction but still renders an FNC order in the absence of an alternative forum, based on nationality grounds, under arbitrary reasonings, in the presence of attachable assets within its jurisdictional reach for execution purposes, or in the domicile of the defendant, it is committing a denial of justice due to the lack of effective access to courts.

Denial of justice and State responsibility

Denial of justice is a primary rule of State responsibility, as confirmed by abundant arbitral practice on the matter. For example, in the Petrobart case, execution proceedings were postponed in the courts of the Kyrgyz Republic at the request of the country´s Vice Prime Minister. Once the postponement was lifted, the debtor had already transferred all its assets to a State-owned entity and was subsequently declared bankrupt, leaving no option for redress to the judgment creditor.

The Petrobart dispute arose originally from a sales contract that was not considered as an investment within the meaning of Kyrgyz foreign investment legislation, but subsequently acquired protection under Article 10 of the Energy Charter Treaty. Here, the tribunal considered in its award that there is ‘no doubt that the collusion between the executive (as manifested by the Vice Prime Minister’s letter of 11 February 1999) and the Bishkek Court which was ready to grant the Republic’s request to stay the execution of its judgment in favour of Petrobart constitutes a clear breach of the prohibition of denial of justice under international law’.

Outside the realm of investment arbitration, denial of justice can also occur when FNC orders amount to international wrongful acts of the forum State, constituting breaches of international law and applicable treaties like the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “NY Convention”). Cases like Figueiredo v Peru and Monégasque de Réassurances v Naftogaz of Ukraine are examples of an inconvenient interpretation of Article III of the NY Convention in order to include the FNC doctrine within the meaning of the term ‘rules of procedure’ in detriment towards foreign plaintiffs, mainly due to their alien status.

Moreover, in the context of transnational litigation claims, FNC also has a substantive presence. Within a negative conflict of jurisdictions, namely alternative jurisdiction cases, FNC is applied regularly. It usually provides wide discretion to the court in order to decide whether or not it will exercise its jurisdictional mandate. It is based on private and public factors (in the United States). If the court decides not to exercise it, then it renders an FNC order on the basis that there is a forum conveniens abroad.

However, the many problems created by the application of the FNC doctrine lie in its wide judicial discretion that is indeed exclusive of common law jurisdictions, allowing the forum court to dismiss cases against foreigners, usually to the advantage of forum-domiciled defendants. These dismissals, when rendered against the object and purpose of applicable arbitration and human rights treaties or when violating the negative obligation of denial of justice under international law - as in the case law detailed above - are international wrongful acts of the forum State under Article 4 of the Articles on State Responsibility.

Thus, in certain cases FNC orders constitute a breach of international law and rule of law towards aliens.

The ever-growing relevance of FNC

The relevance of the FNC doctrine is only expected to increase due to the ever growing multipolarity of transnational arbitration and litigation proceedings. It will be further accelerated by the effects of Globalization 4.0 and technology into these proceedings.

The future of FNC transnational litigation and arbitration proceedings

As it is foreseeable that in the near future more FNC orders will be rendered, States will continue to be exposed to engaging in their international responsibility. This will inevitably call for a broad revision or even restriction of the doctrine, ending with narrower grounds of applicability, as in some civil law jurisdictions, or restricted by international instruments, such as Article 8(1) of the 1996 Hague Convention on Parental Responsibility.

Moreover, FNC is forbidden in some Hague Conventions in civil and commercial matters, namely the Choice of Court Convention and the 2019 Judgments Convention under Article 5(2) and 14(2) respectively, in the context of choice of court agreements and enforcement of foreign judgments. Also, Articles III and V of the NY Convention do not allow an FNC analysis as a condition precedent nor ground of refusal for the enforcement of foreign arbitral awards as currently applied in some jurisdictions.

Forum necessitatis and equality for non-nationals in transnational litigation and arbitration proceedings

In order for States to avoid responsibility due to denial of justice in the context of enforcement proceedings for foreign arbitral awards and transnational litigation claims, municipal courts need to take into account the prohibition of denial of justice as applicable and as a highly persuasive – if not dispositive - factor in the FNC assessment towards non-dismissal. Also, States need to incorporate forum necessitatis and forum arresti, as residual jurisdictional grounds in cases where FNC would normally operate. This is due to the very nature of cross-border proceedings, where the foreign status of the non-national who has requested judicial assistance is always present.

An example on this matter could be Article 11 of the EU Succession Regulation that allows the application of forum necessitatis and only requires ‘a sufficient connection’ with the Member State of the court seized. The same can be said in respect of Article 13 of the Pre-draft Bill of the new Chilean Private International Law that provides forum necessitatis as a residual jurisdictional ground: ‘Chilean courts may exceptionally hear matters that according to this law are beyond their jurisdiction in accordance with previous provisions, when the parties, the object of the dispute or the transaction have a substantial connection with Chile, and there is a material or legal impossibility to exercise the action abroad’.

Going further, it is convenient for States to establish substantive equality between nationals and non-nationals in the acquisition and enjoyment of civil and commercial rights within the transnational litigation and arbitration context, including the right to a fair trial and effective access to courts, where the alien status does not become an obstacle for obtaining due justice.

An example on this matter could be Article 57 of the Chilean Civil Code that considers nationals and non-nationals as equals in relation to civil and commercial rights. This would be in accordance not only with applicable human rights and arbitration treaties, but also with customary rules of international law and the UNIDROIT Principles of Transnational Civil Procedure. In relation to the latter, States and their agents should place special consideration of a correct balance between Principle 2.5 that allows FNC and Principle 3.2 that establishes procedural equality of the parties and expressly forbids discrimination based on nationality grounds.


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