A Different Forum (Non) Conveniens Test for Tort Litigation against Transnational Corporations?
This post has been written by Mukarrum Ahmed, Lecturer in Business Law, Lancaster University. It is the fourth post in the EAPIL blog on-line symposium on Ekaterina Aristova, Tort Litigation against Transnational Corporations: The Challenge of Jurisdiction in English Courts (OUP 2024). The others contributions, by Ekaterina Aristova, Peter Muchlinski, Geert Van Calster, Dalia Palombo and Ekaterina Aristova can be found here, here, here, here and here respectively. Readers are encouraged to participate in the discussion by commenting on the posts.
This is a contribution to a symposium on Tort Litigation against Transnational Corporations: The Challenge of Jurisdiction in English Courts. This author will address the potential for the application of a different test for forum non conveniens in the context of tort litigation against transnational corporations in the English courts. Dr Aristova’s thorough, comprehensive and agenda setting book is the inspiration that has given rise to this symposium. She identifies and discusses jurisdictional challenges including the utility of an alternative forum (non) conveniens test in Chapter IV of the book.
Jurisdiction over English parent companies and their overseas subsidiaries may be perceived as a hurdle in business and human rights litigation commenced by aggrieved foreign claimants. Foreign litigants aggrieved by business and human rights related abuses utilise the duty of care in tort to bring proceedings against English parent companies and their overseas subsidiaries. Before the end of the Brexit transition period, mandatory jurisdiction over English domiciled parent companies pursuant to Article 4 of the Brussels Ia Regulation served as an anchor that allowed the joinder of foreign subsidiaries under the necessary and proper party gateway.
Post-Brexit, the English courts have reverted to the broader application of the doctrine of forum non conveniens even in cases where previously it could not be employed because of the limitations of EU civil procedural law (Case C–281/02 Owusu v Jackson [2005] ECR I-1383). An English court may decide not to exercise jurisdiction by staying proceedings where the preponderance of connecting factors (or localising elements) indicate there is another available forum with jurisdiction that is more appropriate for the trial of the dispute. The two stage Spiliada approach to forum non conveniens has provided a refined response to jurisdictional disputes in international commercial litigation by balancing the demands of a natural forum abroad with the interests of justice necessitating the matter to be nevertheless heard in England (Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460 (Lord Goff)). In the seemingly unlikely event that the UK accedes to the Lugano Convention, the doctrine of forum non conveniens would almost certainly not be permitted if an English court has jurisdiction under the Convention.
The Spiliada forum non conveniens test relies on litigating parties providing a list of connecting factors to the trial judge to consider. The court would not be referred to other decisions on other facts and submissions would be measured in ‘hours and not days’ (ibid, 465 (Lord Templeman)). It was expected that an appeal should be rare and the appellate court should be reluctant to interfere (ibid). The practical experience of courts in England has been to the contrary. The time, cost, and court resources expended in jurisdictional disputes have been highlighted by the senior judiciary over the years. (Vedanta v Lungowe [2019] UKSC 20, [6]– [14] (Lord Briggs); Okpabi v Shell [2021] UKSC 3, [107] (Lord Hamblen)).
In the context of business and human rights litigation commenced by foreign claimants against English parent companies and their foreign subsidiaries the availability of forum non conveniens may help the courts to ward off jurisdictional challenges at the outset. However, this has generally not occurred if the case progresses through to the appellate courts. In exceptional cases, the claimant’s lack of financial and litigation strength in the natural forum abroad may be considered under the interests of justice prong of the Spiliada test which would lead to an English court deciding not to stay proceedings (Vedanta v Lungowe [93]). It should be noted that the ‘advantage of financial assistance available here to obtain a Rolls Royce presentation of his case, as opposed to a more rudimentary presentation in the appropriate forum’ is not a sufficient reason to justify the refusal of a stay of proceedings (Connelly v RTZ [1997] UKHL 30, [1998] AC 854, page 874D; Limbu v Dyson [2023] EWHC 2592 (KB), [44]; see also Campbell KC v James Finlay (Kenya) Ltd [2023] CSIH 39, [69]). Therefore, successfully invoking the substantial justice criterion under the second limb of the Spiliada test may prove to be a difficult proposition.
This author has argued elsewhere that if the Australian ‘clearly inappropriate forum’ (Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 (HC)) test is adopted in the context of business and human rights litigation against transnational corporations, it is unlikely that a foreign claimant seeking compensation from a parent company in an English court would see the case dismissed on forum non conveniens grounds (M Ahmed, Brexit and the Future of Private International Law in English Courts (2022) 127-130). Under the Australian Voth test, the judge’s inward-looking focus should be upon the clear or manifest inappropriateness of the local court and not the comparative appropriateness of the local court and the available foreign forum. A diminished, but acceptable, global role for forum non conveniens is also based on a ‘clearly inappropriate’ forum test (P Beaumont, ‘Forum Non Conveniens and the EU rules on Conflicts of Jurisdiction: A Possible Global Solution’ [2018] Revue critique de droit international privé 447).
Indeed, jurisdictional certainty and efficiency will be augmented because of a test whose methodologically pluralist parameters are less discretionary than the wide-ranging evaluative enquiry undertaken in the quest for the natural forum (A Dickinson, ‘Walking Solo— A New Path for the Conflict of Laws in England’ Conflictoflaws.net, 4 January 2021). The increased predictability that results from acceptance of the ‘clearly inappropriate’ test could well channel litigation to the forum obviating the need for litigation about where to litigate. From a comparative law perspective, the adoption of the Australian common law variant of forum non conveniens would effectively synthesise the Spiliada’s extensive evaluative enquiry with the certainty and efficiency inherent in the mandatory direct rules of jurisdiction of the Brussels–Lugano regime.
This solution may be criticised for increasing the litigation risk for UK companies, but it has become imperative that jurisdictional alternatives to the status quo are explored because otherwise access to justice for disadvantaged foreign litigants may be delayed or denied.
There is broad agreement in the decision in Voth with the substance of the advice contained in the speech of Lord Templeman in Spiliada (ibid, 565). In some cases, the question ‘what is the natural and appropriate forum’ will be ‘by no means easy to answer, particularly at an interlocutory stage of proceedings’ (ibid, 558). Secondly, ‘the complexity of modern transnational transactions and relationships between parties is such as to indicate that in a significant number of cases there is more than one forum with an arguable claim to be the natural forum’ (ibid, 558). It is desirable to discourage the litigation about such a potentially complex issue. Thirdly, ‘there are powerful policy considerations which militate against Australian courts sitting in judgment upon the ability or willingness of the courts of another country to accord justice to the plaintiff in the particular case’ (ibid, 559).
In hard cases, there may be no easy answers as to the natural forum. In practice, it is impossible to find an omniscient judge and there may be more than one way of identifying, understanding, evaluating, and weighing inconsistent connecting factors. Eventually, a judge may not arrive at a result closely approximating to the identity of a singular natural forum. The difference in the application of the ‘clearly inappropriate forum’ and ‘more appropriate forum’ tests in hard cases is alluded to, if not explicitly, in the decision in Voth itself: (ibid, 558)
The ‘clearly inappropriate forum’ test is similar to and, for that reason, is likely to yield the same result as the ‘more appropriate forum’ test in the majority of cases. The difference between the two tests will be of critical significance only in those cases — probably rare — in which it is held that an available foreign tribunal is the natural or more appropriate forum but in which it cannot be said that the local tribunal is a clearly inappropriate one. But the question which the former test presents is slightly different in that it focuses on the advantages and disadvantages arising from a continuation of the proceedings in the selected forum rather than on the need to make a comparative judgment between the two forums.
The ‘system transcendent’ success of the Spiliada doctrine depends largely on its mutual adoption in states that share a common legal tradition. It has been argued that the Spiliada doctrine has not lived up to the expectations of those who thought that its application would be short, simple, and straightforward (A Bell, ‘The Natural Forum Revisited’ in A Dickinson and E Peel (eds), A Conflict of Laws Companion: Essays in Honour of Adrian Briggs (2021) 30). The stricter variant of the forum non conveniens test could help structure the judge’s evaluative process and allocation of time and resources in hard cases where there may be no straightforward answers as to the natural forum at the interim stage of proceedings.
The decision in Brownlie II [2021] UKSC 45 has given rise to commentary on the scope of the English common law jurisdictional rules. Precise rules for service outside jurisdiction based on a sound territorial connection would inject certainty into the law rendering recourse to the discretionary and evaluative forum non conveniens ‘safety valve’ for establishing a connection between the dispute and the forum less significant.
The scholarly discussion has thus far not focussed on the development of a discrete jurisdictional gateway for tort litigation against transnational corporations. Notwithstanding, Dr Aristova’s book is undoubtedly an invaluable resource that will guide academics, practitioners, policy makers and other key stakeholders in this developing area of the law.