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D1 TO DETERMINE A DISPUTE of an international nature, the court must decide that it:
The court in question draws upon the domestic law of the state to make each determination.
D2 What follows is a summary of some of New Zealand’s major trading partners approach to the oft intertwined determinations of basic jurisdiction and forum. This summary has been prepared as an aid for business people and lawyers involved in advising clients dealing with entities in the states involved; it is, however, a brief summary and in each case it will be necessary to obtain expert legal advice from practitioners in the state concerned should these matters assume importance in any dispute or potential dispute.
D3 Although each state has distinctive rules as to when a matter will fall within its courts’ jurisdiction, generally, there are three means of establishing jurisdiction:
The first two means require introduction.
D4 A defendant who participates in the substantive court process without objecting to the court’s jurisdiction is deemed to have submitted to that court having jurisdiction.
D5 A choice of forum clause is a clause in a contract between parties specifying the place at which any dispute may be determined. The weight attributed to such a clause depends upon whether the clause is an “exclusive” or “non-exclusive” one. An exclusive forum jurisdiction clause “. . . attempts to restrict the parties to commencing proceedings in the jurisdiction specified in the contract”. In contrast, a non-exclusive forum clause is considered to be “. . . a submission to the jurisdiction of the court specified in the contract rather than a bar to commencing proceedings in alternative fora” (Parks and Cromie 1990 444).
D6 In England and Wales, if a writ can be served on a defendant, in accordance with the rules of the English court, the court will regard itself as having jurisdiction. This is so whatever the domicile or nationality of the defendant and however fleeting his or her presence in the country (Parks and Cromie 21–22).
D7 A writ can be served on a defendant if:
For Order 11 to apply, the plaintiff must satisfy the court that the plaintiff has a good arguable case on the merits, that one of the heads of Order 11 (rule 1(1)) applies, and that the court’s discretion should be exercised to allow service (Parks and Cromie 24–25; Fawcett and North 191–213). The discretionary power to allow service of a writ out of the jurisdiction is exercised on the basis of forum conveniens (see discussion of forum in paras D30–D63) (Fawcett and North 221; Fawcett 1995 209–210).
D8 In England and Wales, the common law as concerns choice of law in tort was enunciated by Willes J in the case of Phillip v Eyre (1870) LR 6 QB 1, 29:
As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be of such a character that it would have been actionable if committed in England. . . . Secondly, the act must not have been justifiable by the law of the place where it was done.
The general rule expounded by Willes J applies unless
clear and satisfying grounds are shown why it should be departed from and what solution, derived from what other rule, should be preferred.
D9 Malaysia and Singapore have adopted the English approach to establishment of jurisdiction.
D10 In France, articles 14, 15 and 42–48 of the New Code of Civil Procedure set out the basic rules for determining international jurisdiction. The general principle under article 42 is “the territory of the court with jurisdiction is, unless specified otherwise, the court of the place where the defendant is located”. In the case of a private individual, this will be his or her legal domicile or residence. In the case of a corporate entity, the entity is located at the place of its establishment. The claimant can, however, choose either the jurisdiction of the defendant’s residence, the court of the disputed delivery site, or the court of the place where service was rendered. In matters of liability in tort, the claimant may choose between the place where the tortious act was committed, and the place where damage was suffered (Parks and Cromie 28).
D11 Articles 14 and 15 of the Code lay out circumstances where only French courts have jurisdiction (Parks and Cromie 28). It is also possible for a French court not having jurisdiction from application of ordinary rules to declare that it has jurisdiction when of the opinion that a miscarriage of justice would, otherwise, result or when the dispute referred deals with measures of execution to be performed in France (Fawcett 1995 176).
D12 Statute law prescriptively defines when a German court has jurisdiction. Existence of any of the following will give jurisdiction to German courts:
D13 According to Parks and Cromie in International Commercial Litigation, an Australian court has jurisdiction when proper legal service of the originating process has occurred or the defendant has submitted to an Australian court’s jurisdiction (38). The requirements of service vary from state to state, however, as a general rule, a plaintiff may serve an originating process in a state other than the state where the court has jurisdiction without needing to obtain the court’s leave (42). With respect to service outside of Australia, again, each state has its own rules on when leave is required (46). The various rules relate to some defined connection between the forum and the cause of action, the subject matter, or the defendant (Sykes and Pryles 1991 33), and are broadly modelled on the English Order 11 (Fawcett 1995 80; see discussion in para D7). The commission of a tort is, in all jurisdictions except Queensland, a ground upon which service outside the jurisdiction may be predicated (Sykes and Pryles 39). According to Stone, the classic formulation of the tort rule in Phillips v Eyre (1870) LR 6 QB 1 (see discussion in para D8) still holds sway in Australia, although reform is underway (Stone 1992 9, 23). The Queensland Rules of the Supreme Court do not refer to torts committed within the jurisdiction but permit service outside the jurisdiction “when any act or thing sought to be restrained or for which damages are sought to be recovered, was done or is to be done or is situate within the jurisdiction” (Sykes and Pryles 42).
D14 There are no explicit statutory provisions on international jurisdiction in Japan. There are, however, rules determining forum for domestic litigation in the Code of Civil Procedure (the Code), and the principles underlying these rules have been applied by the Japanese courts to deal with international disputes. Accordingly, it is necessary to discuss questions of jurisdiction and forum together as Japanese law does not draw a distinction between the two concepts.
D15 The leading case is that of Michiko Goto et al v Malaysian Airline System Berhad (1983) 26 Japanese Ann of Int Law 122. That Supreme Court decision recognised the wide international jurisdiction of Japanese courts, and identified the following general rules:
(a) There are no explicit statutory provisions on international jurisdiction in Japan;
(b) Therefore, international jurisdiction has to be decided in accordance with those principles of justice which would require that fairness be maintained between parties, and a proper and prompt trial be secured;
(c) Although the provisions on distribution of venue among the local courts as established in the Code of Civil Procedure are not concerned with international jurisdiction itself, they are believed to reflect the above principles. Thus, a defendant should be subject to the jurisdiction of Japan when the conditions meet the provisions for intra-territorial jurisdiction set forth in the Code of Civil Procedure.
D16 In the Code there are two categories of rules concerning jurisdiction: general forum and special forum rules. A prospective plaintiff may chose either the general forum or the special forum (Parks and Cromie 57–58).
D17 A defendant’s general forum is determined by his or her or her domicile. If a person is not domiciled in Japan, or if the domicile is unknown, his or her general forum is determined by his or her place of residence. If there is no place of residence, or the place of residence is unknown, it is determined by his or her last domicile (the Code article 2; Parks and Cromie 57).
D18 Where the defendant is a legal entity, the general forum is determined according to the location of its principal office or principal place of business. In the absence of an office or place of business, the domicile of the principal person in charge of the business is utilised (article 4; Parks and Cromie 57–58).
D19 The special forum rules apply to specific transactions, enabling the matter to be brought before an appropriate court, which may not necessarily accord with the general rules of forum. For example, in the case of a suit for payment of a bill of exchange, promissory note, or cheque the suit may be brought before the court situated in the place of payment shown on such bill, note or cheque (article 6). Another example of a special forum rule is that which deals with tortious suits. A suit relating to a tort may be brought before the court of the place where the harmful event occurred. “Harmful event” has been interpreted to cover both the place where the wrongful event occurred and the place where damage was suffered, if different (article 15; see also Shinagawa Hakurenga Co Ltd v Houston Technical Ceramics Inc (1990) 33 Japanese Ann of Int Law 202; Parks and Cromie 58–59; Fawcett 306).
D20 Beyond the rules of the Code, submission to the jurisdiction of a Japanese court may be by way of agreement, the existence of an exclusive jurisdiction specifying Japan as the forum for determination of disputes, or by participation in the court process without protesting against the court having jurisdiction (Parks and Cromie 62).129
D21 For a jurisdiction clause favouring a foreign state to be enforceable, it must, in writing, clearly stipulate agreement between the parties on the designated court to have jurisdiction, the designated court must be able to exercise jurisdiction over the dispute (article 31), and the dispute must not be subject to the exclusive jurisdiction of a Japanese court. The approach of the Japanese court to a properly executed foreign jurisdiction clause will be to dismiss the Japanese suit unless the jurisdiction clause is blatantly unreasonable or contrary to public order (Parks and Cromie 61–62). Fawcett put it thus:
the agreement on exclusive international jurisdiction designating a foreign court should be valid in principle unless such a conclusion would lead to an unacceptable result which violates public policy. . . (1995 306)
D22 Rules of jurisdiction in the United States (federal and state) are broad allowing United States courts to assert extra-territorial reach. Overall, a United States court will have jurisdiction to determine a dispute if the prospective defendant or its agents or significant aspects of the transaction have a connection with the United States. The least that this requires is that the defendant should have “minimum contacts” with the territory of the United States court’s jurisdiction, “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice’”: International Shoe Co v Washington 326 US 310, 316 (1945). The “minimum contacts” test requires that “the defendant’s conduct and connections with the forum State [be] such that he should reasonably anticipate being haled in to court there”: World-Wide Volkswagen Corp v Woodson 444 US 286, 295 (1980). Jurisdiction over a non-resident defendant may also be pursuant to a general “doing business” test, or a particular transaction or long-arm standard (Parks and Cromie 77–78; Siegel 1982 36).
D23 Alternative means of an United States court having jurisdiction to determine a dispute are: commission of a tortious act within a state, a jurisdiction clause in favour of the United States jurisdiction or a submission to the United States jurisdiction (by participating in action without protesting jurisdiction beforehand) (Parks and Cromie 77; Siegel 1982 79–80, 93).
D24 In China rules regulating conflict of laws are stipulated by the 1991 People’s Republic of China (PRC) Civil Procedure Law, 1985 PRC Foreign Economic Contract Law, and the 1986 PRC General Rules of Civil Law. These laws stipulate the following rules:
Concerning the legal capacity of a person, the law to be followed among the personal laws of different places, is the law of the place where the person has his domicile;
Concerning marriages, the law to be followed is the law of the place where the dispute of divorce is raised;
On matters of wardship and fosterage, the law to be followed is the law of the place which has the closest connection with the person under wardship and care;
For immovable properties, the law to be followed is the law of the place where the real estate is situated;
On matters of legal succession, it is the law of the domicile of the deceased for moveables, and the law of the place of the real estate for immovables to be followed;
On matters of tort, it is the law of the place where the wrongful act is committed that should be followed;
In matters of contract, . . . the parties may choose the applicable law by themselves.129
D25 The “Responses of the People’s Supreme Court to Questions Arising out of the Application of the Foreign Economic Law” supplements statute law (Mu 1993 1).
D26 The Responses elucidate how to determine the law that is to govern a contract by laying down a series of presumptions relating to 13 different types of contract all of which reflect the characteristic performance theory in international contract law. Those presumptions are not reproduced here for they are not determinative; the court retains a discretion to not apply presumptions if the contract appears to be more closely connected with the law of another country (see Guojian 1997 651–652).130
D27 There is no provision for jurisdiction in the international sense in Korea; according to Choe’s chapter in Korean Law in the Global Economy the Korean Code of Private International Law, Soboe Sapop (the Code), provides guidelines for adjudicating tribunals on how to solve controversies entailing foreign elements. The Code merely deals with territorial competence (relating to venue) and not jurisdiction. Nevertheless, the provisions of the Code have been applied by analogy to international cases where jurisdiction is in issue. For this reason, relevant provisions of the Code are detailed below (see Choe 1996 443–449):
– the defendant’s domicile is Korean or the defendant resides or has resided in Korea (article 2);
– if the defendant is a corporate entity, the defendant conducts business in Korea (article 4);
– ithe place where the liability is to be performed is Korea (article 6);
– ithe place where the defendant’s property is located is Korea (articles 9 and 18);
– ithe place where an unlawful act was committed (ie, a tort) is Korea (article 16);
– ithe parties consent to a Korean court having jurisdiction, provided it is in writing and freely entered into (article 26); and
– ithe defendant has participated in the Korean action without beforehand pleading error of jurisdiction (article 27).
D28 The Law Governing the Application of Laws to Civil Matters Involving Foreign Elements (LGACN) sets out the grounds on which a Taiwanese court will have jurisdiction to determine a dispute. If the claim is contractual, article 6 provides:
With respect to the requisite for establishing and the effect of a juristic act whereby an obligatory relation is brought about, the law to be applicable thereto shall be determined by the intention of the party to the act. In cases where the intention of the parties is unknown, and where both of the parties are of the same nationality, the law of their country shall be applicable. If they are of different nationalities, the lex loci actus shall be applicable. If the act was done at different places, that place whence the notice of offer was issued shall be deemed as the place of the act. If the opposite party did not know the place whence the notice of offer was issued at the time when the offer was accepted, the place of domicile of the offerer shall be deemed as the place of act. If the place of the act mentioned in the preceding paragraph spans over two or more countries or it does not belong to any country, the lex loci solutionis apply. [sic]
D29 If the nature of the claim is tortious, article 9 of the LGACM provides:
An obligation arising from a wrongful act shall be dealt with by lex loci delicti; provided, however, that this shall not apply where such act is not considered to be wrongful under the law of the Republic of China.
D30 This section overviews the grounds upon which New Zealand’s major trading partners may decline to exercise jurisdiction.
D31 An English court will decline to exercise its jurisdiction if the court is satisfied
that there is some other available forum, having jurisdiction, which is the appropriate forum for trial of the action, ie in which the case may be tried more suitably for the interests of all the parties and the ends of justice. (Parks and Cromie 437 citing Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460,476)
D32 The House of Lords in Spiliada considered, exhaustively, principles on which the discretion to determine a dispute should be exercised. The framework for approaching a plea of forum non conveniens is outlined by Lord Goff as:
(a) A stay of proceedings will only be granted where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action.
(b) In general the burden of proof rests on the defendant to persuade the court to exercise its discretion to grant a stay. However, once the defendant has made a prima facie case that another forum is more appropriate, the burden shifts to the plaintiff to show that justice requires the case to be tried in England.
(c) If jurisdiction is founded as of right in England, rather than leave to serve the defendant out of the jurisdiction being required, then the defendant has to show that there is another forum which is clearly or distinctly more appropriate than the English forum.
(d) In determining the appropriateness of a forum the court will determine how real and substantial is its connection with the dispute. In doing so it will consider a number of connecting factors, including the convenience of witnesses, the law governing the issue, and the places where the parties reside or carry on business.
(e) If there is no clearly more appropriate forum then no stay will be granted.
(f) If, however, the court decides that there is a prima facie more appropriate forum it will grant a stay unless the plaintiff can show that there is circumstances by reason of which justice requires that a stay should nevertheless not be granted. (Fawcett, 1995 209, citing Spiliada 476–478)
D33 Further considerations affecting the appropriateness of a forum emergent from case law are:
(For discussion of these issues see Fawcett 218, 211–220; Parks and Cromie 437–438; and Fawcett and North 227.)
D34 The court imposes a more stringent criterion than that required for stays when foreign proceedings are sought to be restrained. In the leading case, the decision of the Privy Council in Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871, Lord Goff set out the approach to be taken to an application for an injunction to prevent the issue of or restraint of a foreign proceeding as follows:
First, the jurisdiction is to be exercised when the “ends of justice” require it. Secondly, where the court decides to grant an injunction restraining proceedings in a foreign court, its order is directed not against the foreign court but against the parties so proceeding or threatening to proceed. Thirdly, an injunction will only be issued restraining a party who is amenable to the jurisdiction of the court, against whom an injunction will be an effective remedy. Fourthly, the jurisdiction is one which must be exercised with caution. (Fawcett 229–230 summarising Lord Goff of Chieveley in Societe Nationale Industrielle Aerospatiale 892).
D35 As a general rule, to show that an injunction is required, the plaintiff needs to show that “England is the natural forum and that it would be oppressive or vexatious to permit the defendant to continue with the foreign proceedings.”131 This threshold may be met by the existence of an exclusive foreign jurisdiction clause: Sohio Supply Co v Gatoil [1989] 1 Lloyd’s Rep 588, 592.
D36 Singapore and Malaysia have adopted the British common law approach endorsed by the Spiliada case (Fawcett and North 222).
D37 A French court may decline to exercise its jurisdiction in three types of situations:
D38 The latter exception is the French equivalent of res judicata.
D39 Connexite is a stay on the ground of a connected set of proceedings occurring in a foreign court. To establish a plea of connexite the court must satisfy itself that “several actions are so intricately connected that it is desirable to examine them together” (Fawcett 181). However, although theoretically available, its use has been limited to domestic litigation.
D40 The final ground is that of a foreign proceedings already on foot elsewhere. For an application for stay on the ground of lis alibi pendens to be successful, several conditions must be met:
The French court then examines the enforceability of any foreign judgment rendered or to be rendered in France. This requires consideration of the regularity of the foreign proceedings. Notwithstanding the preconditions for the grant of the stay having been met, the French court retains a discretion to refuse a stay (Fawcett 181; Parks and Cromie 440–442).
D41 So far, forum non conveniens and restraint of foreign proceedings are unknown to French law. In short, if a French court has jurisdiction by virtue of the applicable law, it cannot declare itself incompetent on grounds of inappropriateness or any ground other than the three identified above (Parks and Cromie 441; Fawcett 175, 177–179).
D42 Interestingly, jurisdiction clauses granting jurisdiction to a foreign court will be respected by French courts provided the dispute is of international nature and does not concern a matter in which French courts have mandatory territorial competence: Cie de Signaux et d’Entreprises Electriques (CSEE) v Soc Sorelec [1986] RC 537. Similarly treated by French courts is submission to the jurisdiction of a foreign court by the defendant; this is viewed as tacit agreement between the parties to depart from French jurisdiction and extend foreign competence (Fawcett 184).
D43 As regards injunctions, there is no possibility under French law for the granting of an injunction to stop proceedings started abroad (Fawcett 186).
D44 German courts rarely renounce jurisdiction; statute law defines when a German court has jurisdiction (which must then be exercised) and the narrowly defined areas where it is possible for the German court to defer to the jurisdiction of a foreign court (Fawcett 190).
D45 The broadest grounds for a German court to dismiss a suit are lis alibi pendens, and the existence of an exclusive foreign jurisdiction clause. For lis alibi pendens to apply the action before the German court must involve the same parties and the same subject matter as that before the foreign court, the foreign court must have been seised of the matter earlier in time, and any judgment rendered by that court must be enforceable in Germany (Zivilprozessordnung (ZPO) s 261; the prerequisites for recognition are found in s 328; see Parks and Cromie 443). Notwithstanding these requisites having been met, courts still retain a discretion to refuse dismissal of the German suit if exceptional circumstances require it. In practice German courts do generously respect the earlier pendency of a foreign action. Foreign selection agreements stipulating an exclusive foreign forum are also widely respected: judges do not have discretion to look past an exclusive jurisdiction clause appointing a foreign forum, the court can only determine that such a clause is of no effect because formalities stipulated by German law have not been complied with. This is so regardless of the enforceability of a foreign judgment in Germany. (See further Fawcett 190–191, 196–197.)
D46 There are other circumstances when a German Judge is empowered to dismiss an action, but these are much narrower in scope. For example, the Code on Non Contentious Proceedings allows for a flexible approach to determining the most appropriate forum, and provides an example of where considerations of forum non conveniens may enter German law. Adoption and custody matters fall into the non-contentious category. Another example is where a German court is not able to apply the foreign rule, even after adjusting, if necessary, German procedural rules. This is known as international non-competence ratione materiae (Fawcett 191–192).
D47 Consistent with statutorily defined rules of jurisdiction, German courts do not have the ability to halt proceedings lodged in a foreign jurisdiction by the issue of an injunction. Instead, a judgment rendered by a foreign court that a German court considers was wrongly possessed of it would simply not be recognised (Parks and Cromie 443; Fawcett 204; Sykes and Pryles 26).
D48 Australia utilises the doctrine of forum non conveniens to determine whether or not to exercise jurisdiction. Up until the case of Oceanic Sun Liner Special Shipping Co Inc v Fay (1988) 79 ALR 9 Australia followed English law authority. Following that case the law on conflict of laws changed (Fawcett 82–85; Sykes and Pryles 88).
D49 The decision of the High Court of Australia in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 was the first to enunciate a distinctive Australian slant to the doctrine of forum conveniens. The High Court decided that where service occurred within Australia a stay of proceedings should be granted only when the forum chosen by the plaintiff was clearly inappropriate; that is, in a clear case where the continuation of the proceedings in Australia would be vexatious and oppressive (Fawcett 85). “Oppressive” was defined as “serious and unfairly burdensome, prejudicial or damaging”, while “vexatious” means “productive of serious, unjustified trouble and harassment” (Parks and Cromie 446). The defendant also needs to establish that an appropriate forum with jurisdiction to hear the dispute existed elsewhere. In cases where jurisdiction had been acquired through service outside the jurisdiction, the onus would instead be on the plaintiff to establish that the chosen jurisdiction was not a clearly inappropriate forum (Fawcett 85). The factors outlined by Lord Goff in the Spiliada case were noted to assist the court in its determination of whether or not the forum chosen was clearly inappropriate. However, the use of “clearly inappropriate forum” obviously reduces considerations concerning the appropriateness of alternate forums. Moreover, consideration of public interest factors has been renounced; see, for example, the opinion of Deane J in the Voth decision that public interest factors should not be taken into account (Fawcett 87).
D50 In Australia the principle of lis alibi pendens – in many countries considered a discrete area of law – is but one factor to be considered when considering the appropriateness of the Australian court (Fawcett 90; Parks and Cromie 446).
D51 Foreign jurisdiction clauses constitute another means to stay or dismiss a proceeding (Fawcett 93; Sykes and Pryles 78). Australian courts have not departed from the English approach as set out in the cases of Aratra Potato Co Ltd v Egyptian Navigation Co (The El Amria) [1981] 2 Lloyd’s Rep 119 and The Eleftheria: Owners of Cargo Lately Laden on Board Ship or Vessel Eleftheria v The Eleftheria (Owners) [1969] All ER 641. The English court’s approach to an application for a stay based upon a foreign jurisdiction clause is to apply “. . . a strong bias in favour of the special bargaining and holding the parties to their contract”: Lewis Construction Co Pty Limited v M Tichaeur Societe Anonyme [1966] VR 341. The plaintiff in order to avoid a stay being granted must produce evidence of special circumstances; that burden is a heavy one, especially when the foreign jurisdiction clause is “exclusive” (see Fawcett 93; Sykes and Pryles 78).
D52 An Australian court has the power to issue an injunction to restrain a foreign proceeding (Fawcett 95). The circumstances in which such a power will be exercised appear to be in line with English authority; there are presently no reported Australian cases concerning applications for an injunction restraining foreign proceedings (Parks and Cromie 447). Generally speaking, a plaintiff pursing an action in a foreign court will be restrained from doing so if “. . . such pursuit would be vexatious or oppressive” (896). In practice the jurisdiction to issue an injunction has been exercised with great caution (Sykes and Pryles 101–104; Fawcett 95).
D53 In Japan, the rules for declining jurisdiction are in their formative stages. The basis of dismissal was formulated in the Malaysian Airlines case as the fourth general rule (the other 3 appear at para D15). The court held that:
(4) Where, upon taking into account international aspects of the case, there are special circumstances which invoke a conclusion on the international jurisdiction derived from (3) that violate the principles of justice as set forth in (2), the conclusion will be altered. (Fawcett 308)
Employing the above exception, a subsequent District Court decision, Sei Mukoda et al v The Boeing Co Inc (1988) 31 Japanese Ann of Int Law 216, interpreted the fourth general rule thus:
if venue for local territorial competence provided for in the Code of Civil Procedure is located in Japan, it would be in accordance with the principles of justice and reason to sustain the jurisdiction of the Japanese court in general, unless special circumstances can be found. Such special circumstances exist where, in the light of the concrete facts of the case, sustaining the Japanese court’s jurisdiction would result in contradicting the principles of securing fairness between the parties and maintaining the proper and prompt administration of justice. (Fawcett 308)
D54 These criteria are of similar nature to the forum non-conveniens doctrine. So far, under the exceptional circumstances test, such considerations as unavailability of witnesses and evidence, delay, enforceability of a judgment rendered by a foreign court, impecuniosity of the plaintiff and the availability of compulsory process for attendance of unwilling witnesses have featured: Sei Mukoda et al v The Boeing Co Inc. There are minor differences between the two tests: the special circumstances test does not require proof of the existence of another more appropriate forum; public factors – such as administrative difficulties cased by the number of cases – do not affect the discretion to dismiss an action brought in Japan; and Japanese courts do not have the power to stay an action (except in the case of natural disasters and the like) therefore the Japanese courts are unable to keep a proceeding extant until such time as the court is assured that it has been dealt with expeditiously and fairly in the foreign jurisdiction. The Code is supportive of case law in providing that no party may bring another suit concerning a case which is pending before a court (article 231). (See further Fawcett 309–310.)
D55 Two further modes of dismissing an action have been used by Japanese courts. First, use of the doctrine lis alibi pendens in conjunction with other “special circumstances” rendering it in the court’s view just to defer to the jurisdiction of the foreign court: Greenlines Shipping Co Ltd v California First Bank (1985) 28 Japanese Ann of Int Law 243. Secondly, a Japanese case recently adopted the German version of lis alibi pendens as a ground for dismissing a Japanese action (Fawcett 310–311). The German version requires not only that the matter be between the same parties, of the same subject matter, and within the jurisdiction of another competent court, but also that any judgment delivered by that foreign court is enforceable in Germany. The latter requirement means the Japanese court assures itself of the foreign courts procedures in conducting the court hearing by Japanese standards. It is difficult, therefore, for a Japanese court to make an early decision on the enforceability of a foreign court’s judgment: Shinagawa Hakurenga Co Ltd v Houston Technical Ceramics Inc (1990) 33 Japanese Ann of Int Law 202. Remembering the courts’ inability to stay an action, it is likely to be only mature actions that are dismissed on this ground. (See further Fawcett 314.)
D56 Japanese courts are not empowered to issue an injunction barring proceedings lodged in a foreign court, even if the Japanese court considers the matter should be determined by it.
D57 United States federal courts utilise the doctrine of forum conveniens. Each state also devises its own forum conveniens rules. In general, both at federal and state level, the defendant seeking to avoid United States jurisdiction must demonstrate that some other forum is more convenient. This is more difficult for a defendant in an United States jurisdiction to establish when it is the plaintiff’s home forum; a court does not deprive such a plaintiff of the forum unless “the facts establish such oppressiveness and vexation to a defendant as to be out of all proportion to a plaintiff’s convenience, or trial in the chosen forum would be inappropriate because of considerations affecting the court’s own administrative and legal problems”: Gulf Oil Corpn v Gilbert 330 US 501, 524 (1947) (see further Fawcett 402–404).
D58 A number of factors affecting the decision to dismiss or stay an action are enumerated in the leading decision in this area of Gulf Oil Corpn v Gilbert. Those factors are divided into two sections: private interests factors and public interest factors. The private interests factors include:
The public interest factors include:
D59 Other grounds for dismissal of an action are:
Forum clauses are ordinarily enforced by the courts, especially if “exclusive”. The forum selection clause is binding on the parties, unless the party seeking to prosecute in a court other than the selected forum can show that its enforcement would be unreasonable, unfair, or unjust: Bremen v Zapata Off-Shore Co 407 US 1 (1972) (see further Fawcett 407–408; Parks and Cromie 456).132
D60 A court will grant a preliminary or final injunction if it is satisfied that a refusal to grant the injunction will cause irreparable harm to the person seeking the injunction and will not impose undue hardship on the person against whom the injunction is sought. The public interest must also be taken into consideration. There is wide consensus that an injunction should not be lightly granted, comity of nations being an important consideration (Fawcett 423).
D61 In the commercial context, in the absence of a choice of forum clause, the Chinese court under article 5 of the Foreign Economic Contract Law will apply the law of the country which has the closest connection with the contract. This is considered to be “. . . similar to the common law approach” (Yang 1993 13). There is little case law and therefore an absence of elaboration on what constitutes a connecting factor (see further Mu 1993 2; Guojian 1989).
D62 Rules of venue are designed to present the subject matter to the court best equipped to properly, fairly and efficiently hear the dispute. Textbooks referred to on Korean law do not discuss the ability of a Korean court to dismiss an action notwithstanding that it has jurisdiction. It may be Korean jurisprudence has not developed this far however, as Japanese and Korean law were modelled on German law (late nineteenth century), and German law does not prescribe a discretion to dismiss, it is unlikely that Korean courts will differ in approach from their continental predecessor (see further Choe 1996 439, 441–442).
D63 It appears that if a Taiwanese court has jurisdiction that jurisdiction shall be exercised (textbooks on Taiwanese law do not disclose grounds for dismissing an action when a Taiwan court is properly seized of it). In fact, there is the ability for a Taiwanese court to embrace a dispute not falling within the jurisdiction of a Taiwanese court and override the jurisdiction of a foreign court where “. . .the law of a foreign court is applicable under this Law, but the provisions therein are contrary to the public order and good morals of the Republic of China. . .” (LGACM article 25).
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