What is the doctrine of forum non conveniens?

According to Black’s Law Dictionary, forum non conveniens (“FNC”) in a nutshell, refers to the discretionary power of a court to decline jurisdiction when convenience of the parties and ends of justice would be better served if action were brought and tried elsewhere.

What is the relationship between FNC and the jurisdiction of the court?

A court may have jurisdiction to try and hear cases brought before it pursuant to its inherent power or any specific statutory provision. However, it may decline its jurisdiction over the same due to the ground of FNC.

When does a Malaysian Court have jurisdiction to try a case?

The jurisdiction and power of the Malaysian Courts to preside over any case are provided for under Section 23 of the Courts of Judicature Act 1964 as follows:

(i) where the cause of action arises in Malaysia;
(ii) where the defendant or one of several defendants resides or has his place of business in Malaysia;
(iii) where the facts on which the proceedings are based exist or are alleged to have occurred in Malaysia; or
(iv) any land the ownership of which is disputed is situated in Malaysia.

Do the Malaysian Courts recognise FNC?

In the case of American Express Bank Ltd. V. Mohamad Toufic Al-Ozeir & Anor [1995] 1 CLJ 273, the Supreme Court ruled that even though a Malaysian court has jurisdiction to entertain the claim between the parties, the court still has the discretion to decide whether to deal with the case or otherwise, based on FNC principles, as discussed below.

The above judgment by the Supreme Court suggests that even after a court has made a ruling that it had jurisdiction to hear a claim, the court can still exercise its discretion to allow the application of the party to have the case tried in another suitable and convenient forum.

Do the English Courts recognise FNC?

By virtue of the celebrated case of Spiliada Martime Corp v Cansulex Ltd [1987] A.C. 460, 475-478, the House of Lords declared that the English Courts also recognise the FNC doctrine as a discretionary power of the court.

What are the basic principles laid down in the case of Spiliada?

In Spiliada, Lord Goff set out the basic principle as follows:

“The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having jurisdiction, which is the appropriate forum for trial of the action, i.e. in which the case may be tried more suitably for the interest of all the parties and the ends of justice.”

Do the courts in the European Union (“EU”) recognise FNC?

Pursuant to the Brussels Convention 1968, the courts in EU countries have exclusive jurisdiction to hear any claim between the parties where one or more of whom is domiciled in any EU country, where the parties have agreed that the courts of EU countries are to have jurisdiction. It is also provided that the courts in EU countries have no discretion to decline jurisdiction even on the ground of FNC, and other courts have no power to override the jurisdiction agreement between the parties.

In the recent case of Owusu v Jackson [2005] 1 Lloyd’s Rep 452, the European Court of Justice declared:

“the Brussels Convention precludes a court of a Contracting State (i.e European Countries) from declining jurisdiction conferred on it by Article 2 of that Convention on the ground that a court of a non-Contracting State would be more appropriate forum for the trial of the action even if the jurisdiction of no other Contracting State is in issue or the proceedings have no connecting factors to any other Contracting State.”

Conclusion

FNC is well recognised under the administration of justice system in Malaysia as well as in England. However, as far as the EU countries are concerned, FNC is not applicable when the case falls within the ambit of the Brussels Convention 1968.

By Arni Ariffin
Senior Associate
Corporate Commercial Practice Group

Azmi & Associates
14th Floor, Menara Keck Seng,
203 Jalan Bukit Bintang,
55100 Kuala Lumpur,
Malaysia.
Phone: +603- 2118 5000  ext. 5052
Fax    : +603- 2118 5111
E-mail: arni@azmilaw.com