Forum Non Conveniens and the Foreign Sovereign Immunities Act
On January 22, 2016, the United States Court of Appeals for the Second Circuit in New York upheld the decision of the lower court in the matter of Bahgat v. Arab Republic of Egypt. The plaintiffs -- Dr. Ahmed Baghat, his three children, and his company, Global One Limited -- as well as the defendants -- the Arab Republic of Egypt and the National Bank of Egypt -- are all Egyptian parties. Therefore, in the initial judgment of the United States District Court for the Southern District of New York, the district court dismissed the suit brought by the plaintiffs on the grounds that the defendants were protected by the Foreign Sovereign Immunities Act. An alternative ruling concluded that the suit should be dismissed under the doctrine of forum non conveniens.
A forum non conveniens ruling is made when a case is better suited to be heard in a different court, or forum. The court of appeals affirmed the forum non conveniens decision and concluded that the case should be heard in an Egyptian forum.
The appellate court's decision to affirm the judgment was based upon several factors. To begin, a district court's decision to dismiss a case under forum non conveniens is made using a three-step analysis:
At step one, a court determines the degree of deference properly accorded the plaintiff's choice of forum. At step two, it considers whether the alternative forum proposed by the defendants is adequate to adjudicate the parties' dispute. Finally, at step three, a court balances the private and public interests implicated in the choice of forum.
Thus, owing to the fastidiousness of the aforementioned three-step analysis, the court of appeals gives substantial deference to a district court's decision to dismiss a case for forum non conveniens. The court writes, [w]e will only reverse if the trial court has 'clearly abused its discretion.'
In this matter, the court compared potential abuses of discretion to the three-step analysis described above. Because the majority of the plaintiffs currently reside in Egypt, the political unrest in Europe had no potential damaging effects on the dispute, and because all the relevant information regarding the case is located in Egypt and would thus require substantial knowledge of Egyptian law, the court of appeals determined that the suit is, indeed, better suited for an Egyptian forum rather than a United States court. -- Kathryn Campbell, Legal Assistant, Berliner Corcoran & Rowe LLP, Washington, DC.
Wed, / Embassy Law Link