Opinion
60338604
Decided May 12, 2005.
Plaintiffs Globalvest Management Company L.P., Utilivest II LP, Utilivest III LP, Latinvest Fund Ltd., Brazfest Fund Ltd., Globalvest Value Fund LP, Latinvest Holdings LDC, Globalvest Hedge Fund LP, Latinvest Partners LP, Utilivest II Delaware LLC, Brazfest Fund Delaware LLC, Globalvest Hedge Delaware LLC, Globalvest Value Holdings Delaware LLC, Latinvest Fund Delaware LLC, Latinvest Holdings Delaware LLC, Latinvest Partners Delaware LLC and Utilivest III Delaware LLC (collectively, Globalvest) bring a claim against defendant Citibank, N.A. (Citibank) for tortious interference with prospective economic advantage based on the fact that certain Brazilian parties but not Citibank — brought a lawsuit in Brazil against Globalvest, alleging that Globalvest improperly sought to exercise shareholder control over two Brazilian companies. Citibank now seeks an order, pursuant to CPLR 327, dismissing this action on the ground of forum non conveniens. Alternatively, Citibank seeks an order, pursuant to CPLR 3211 (a) (4), dismissing or staying this action in light of the prior action pending in Brazil, or, pursuant to CPLR 3211 (a) (7), for dismissal on the ground of failure to state a claim. For the reasons set forth below, Citibank's motion for dismissal on the ground of forum non conveniens is granted.
Globalvest is an emerging markets fund manager, with over $300 million of assets in managed funds, most of which represents investments in Brazilian securities (Complaint, ¶ 3).
The various Globalvest entities, who are plaintiffs in this action, are domiciled in the U.S. Virgin Islands, the Cayman Islands, and Delaware ( id., ¶¶ 2-4). Not a single plaintiff is a resident or domiciliary of New York.
The sole defendant in this action is Citibank. The complaint alleges that "[t]his action arises from a scheme of wrongful acts perpetrated by Citibank, on its own and through its authorized affiliates, investment managers and/or agents," and refers to such affiliates, managers or agents as the "Citibank Entities" ( id., ¶ 1). The Citibank Entities include International Equity Investments, Inc. (IEII), a Delaware subsidiary of Citibank, as well as the following distinct corporate entities based in Brazil and the Cayman Islands: Citicorp Venture Capital LP (CVC LP), a Cayman Islands entity in which IEII is the sole limited partner; CVC Opportunity Equity Partners Ltd. (CVC Ltd.), a Cayman Islands entity that is the general partner of CVC LP; Futuretel S.A., a Brazilian corporation, a majority of whose shares are owned by CVC LP; Opportunity Mem S.A. (Opportunity Mem), a Brazilian company which is owned by Futuretel; two Brazilian holding companies, Newtel Participacoes S.A. (Newtel) and Telpart Participacoes S.A. (Telpart); two Brazilian government-regulated telecommunications holding companies, Telemig Celular Participacoes S.A. (Telemig) and Tele Norte Celular Participacoes S.A. (Tele Norte); Mary Lynn Putney, who, "on information and belief" is an officer of CVC LP and Citibank; and Daniel Dantas, a Brazilian investment banker, and a principal in the Opportunity Group, which included CVC Ltd. ( id., ¶¶ 11-16).
In this action, Globalvest seeks $150 million in compensatory damages, and $150 million in punitive damages, based upon the April 2004 commencement of an allegedly "frivolous" lawsuit (the Brazil Lawsuit) in the Lower Civil Court of Brazil's Federal District against Globalvest ( id., ¶¶ 22-23). Citibank is not the plaintiff in the Brazil Lawsuit; rather, the plaintiffs are two Brazilian communications companies Telemig and Tele Norte, their majority shareholders Telemig Celular S.A. (Telemig Celular), Amazonia Celular S.A. (Amazonia), Newtel, Telpart, and Opportunity Mem, and one minority shareholder Opp 1 Fundo de Investimento em Acoes (collectively, the Brazil plaintiffs).
The Brazil Lawsuit involves a fight for corporate control concerning Globalvest's purchase of shares in the Brazilian telecommunications companies, Telemig and Tele Norte. The Brazil plaintiffs allege that Globalvest acquired 25% and 13.5 % stakes in Telemig and Tele Norte, respectively, without complying with the Brazilian law requiring notice to the market upon acquisition of a ten percent interest in a publicly traded security (Brazil Complaint, ¶ 47 [Aff. of Sergio Spinelli Silva, Exh A]). The Brazil plaintiffs further allege that these wrongful acquisitions of stakes in Telemig and Tele Norte enabled Globalvest to appoint board members without the required regulatory approval ( id., ¶ 58). Thus, the Brazil plaintiffs allege, Globalvest effected a change of control of Telemig and Tele Norte, in violation of Brazil's Telecommunications Law, and associated regulations ( id., ¶¶ 47, 118).
As alleged in the Brazil Complaint, the 22nd Federal Department of the Federal District Court in Brazil made a preliminary finding that Globalvest's actions in obtaining that change of control violated certain regulatory provisions, and it granted a request to suspend Globalvest's voting rights in Telemig and Tele Norte ( id., ¶ 63). The Brazil plaintiffs seek an unspecified amount of damages from Globalvest, to compensate for their direct costs in rectifying the change of control, and for the loss of value allegedly incurred at Telemig, Telemig Celular, Tele Norte and Tele Norte Celular as a result of administrative and strategic decisions made at those companies during the period when Globalvest wrongfully participated in control of Telemig and Tele Norte ( id., ¶ 118).
The complaint in the instant action alleges that Citibank, on its own and through the conduct of the other Citibank Entities that it directed, undertook a series of wrongful, coercive measures against Globalvest and other minority shareholders of Telemig and Tele Norte, in a transparent effort to compel the minority shareholders of those companies to sell their interests to Citibank at a price well below market value, thereby depriving the minority shareholders of their lawful tag-along rights (Complaint, ¶ 20). According to Globalvest, Citibank's improper conduct in furtherance of this scheme involved causing the frivolous Brazil Lawsuit to be commenced against Globalvest.
Globalvest asserts a single cause of action for tortious interference with prospective economic advantage, alleging that Citibank's conduct in causing the commencement of the Brazil Lawsuit was pretextual and coercive, as the real motive for commencing that lawsuit was to create illiquidity in Globalvest's investments in Telemig and Tele Norte, thereby damaging its business, customer relationships and reputation, with the intention of forcing it to sell its shares in Telemig and Tele Norte well below market value.
Globalvest alleges that its ability to seek relief in Brazil is "severely restricted ( id., ¶ 29), and that the Brazil Lawsuit provides it "little or no recourse to seek relief . . . in Brazil" ( id., ¶ 30), due to certain procedural delays.
On October 15, 2004, following the commencement of this litigation, Globalvest filed a claim in the Grand Court of the Cayman Islands (the Cayman Complaint) against Daniel Dantas, Opportunity Mem, CVC Ltd. and CVC LP. The Cayman Complaint alleges similar facts as the complaint before this Court, against different defendants. In the Cayman action, Globalvest claims that "the commencement of [the Brazil Lawsuit], regardless of its merits or eventual outcome, is part and parcel of the conspiracy and unlawful interference perpetrated by the Defendants against the Plaintiffs" (Cayman Complaint, ¶ 25 [Spinelli Aff., Exh B]), and seeks an award of $300 million in compensatory damages, as well an unspecified amount of exemplary damages. In the Cayman Complaint, Globalvest states that it fully intends to defeat the Brazil Lawsuit, and does not assert that any procedural difficulties prevent it from doing so ( id., ¶ 23). Globalvest also states its intention to seek a ruling from the Brazilian Court that the plaintiffs there commenced the Brazil Lawsuit in bad faith ( id., ¶ 24).
In support of its motion to dismiss on the ground of forum non conveniens, Citibank contends that this dispute is almost entirely concerned with the events, institutions and laws of a foreign nation Brazil and is not concerned with New York. Specifically, Citibank argues, virtually all of the pertinent documentary and testimonial evidence is located in Brazil, Brazilian law governs this dispute, Brazil is the only forum where all of the relevant defendants are subject to jurisdiction with respect to this dispute and where the pertinent non-party witnesses can be found, and Brazil has, by far, the greater interest in resolving what is essentially a battle for control of two Brazilian government-regulated telecommunications companies.
Conversely, Globalvest argues that this action does not belong in Brazil because it arises from a scheme of wrongful acts orchestrated and perpetrated by Citibank in New York, in an effort to coerce Globalvest to sell its minority interests in Telemig and Tele Norte to Citibank at a price well below market value. Globalvest asserts that, while its claim is based, in part, on Citibank's wrongful conduct in causing the commencement of the frivolous Brazil Lawsuit, this action is not about claims that are the subject of the Brazil Lawsuit. Rather, this action is about Citibank's wrongful actions toward Globalvest in New York. According to Globalvest, these wrongful acts include: (1) causing the frivolous Brazil Lawsuit to be commenced; and (2) deploying Roberta Fisher, a New York-based employee or agent of Brazilian investment banker Daniel Dantas, to approach Globalvest's representatives, culminating in a meeting in New York, in an effort to coerce it to sell its Telemig and Tele Norte shares at a discount in exchange for the discontinuance of the Brazil Lawsuit. Globalvest further contends that Citibank officer Mary Lynn Putney, who has a close relationship with Dantas, and other Citibank representatives based in New York, actively participated in and directed these wrongful and coercive measures.
It is well settled that New York courts "need not entertain causes of action lacking a substantial nexus with New York" ( Martin v. Mieth, 35 NY2d 414, 418). The doctrine of forum non conveniens, codified in CPLR 327 (a), "permits a court to stay or dismiss such actions where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere" ( Islamic Republic of Iran v. Pahlavi, 62 NY2d 474, 478-479, cert denied, 469 US 1108). The central focus of the forum non conveniens inquiry is to ensure that trial will be convenient, and will best serve the ends of justice ( see Piper Aircraft Co v. Reyno, 454 US 235; Capitol Currency Exch., N.V. v. National Westminster Bank PLC, 155 F3d 603 [2d Cir 1998], cert denied 526 US 1067). If the balance of conveniences indicates that trial in plaintiff's chosen forum would be unnecessarily burdensome for the defendant or the court, then dismissal is proper ( see id.).
New York courts consider the availability of an adequate alternative forum and certain other private and public interest factors when evaluating New York's nexus to a particular action, and deciding whether to dismiss an action on the grounds of forum non conveniens ( Islamic Republic of Iran v. Pahlavi, 62 NY2d 474, supra). The burden is on the defendant challenging the forum to demonstrate the relevant private or public interest factors which militate against accepting the litigation ( id.; Highgate Pictures, Inc. v. De Paul, 153 AD2d 126 [1st Dept 1990]). Although not every factor is necessarily articulated in every case, collectively, courts consider and balance the following factors in determining an application for dismissal based on forum non conveniens: existence of an adequate alternative forum; situs of the underlying transaction; residency of the parties; the potential hardship to the defendant; location of documents; the location of a majority of the witnesses; and the burden on New York courts ( see Islamic Republic of Iran v. Pahlavi, 62 NY2d 474, supra; World Point Trading PTE, Ltd. v. Credito Italiano, 225 AD2d 153 [1st Dept 1996]; Evdokias v. Oppenheimer, 123 AD2d 598 [2nd Dept 1986]). A motion to dismiss on the grounds of forum non conveniens is subject to the discretion of the trial court, and no one factor is controlling ( Islamic Republic of Iran v. Pahlavi, supra; see also In re New York City Asbestos Litigation, 239 AD2d 303 [1st Dept 1997]).
The present action should be dismissed on the ground of forum non conveniens, because the number and weight of the relevant factors in this action center in Brazil, and not in New York. This action, brought by seventeen non-New York parties, alleges a claim based on a purportedly "frivolous" lawsuit currently pending in Brazil. The facts and circumstances pertinent to this action occurred in Brazil, and the material witnesses and documents are located there.
Moreover, Brazilian law governs the central question of whether the Brazil Lawsuit is frivolous, as well as Globalvest's tortious interference claim. Indeed, the Brazilian courts are in the best position to decide whether the lawsuit pending there is frivolous. As such, there is absolutely no nexus between Globalvest's cause of action and this forum. Where, as here, the action is almost entirely concerned with the events, institution and law of a foreign nation, "the action cannot be said to have a 'substantial nexus' with New York." ( Tetra Finance (HK) Ltd. v. Patry, 115 AD2d 408, 410 [1st Dept 1985], appeal withdrawn 67 NY2d 758 [citation omitted]; see also Chawafaty v. Chase Manhattan Bank, N.A., 288 AD2d 58, 58 [1st Dept 2001], lv denied 98 NY2d 607 ["this action lacks a substantial connection to New York and would be burdensome to its courts").
Situs of the Transaction
The situs of the transaction points to Brazil as being the more convenient forum. The fact that the "transaction[s] out of which the cause of action arose occurred primarily in a foreign jurisdiction" weighs strongly in favor of dismissal on grounds of forum non conveniens ( Islamic Republic of Iran v. Pahlavi, 62 NY2d at 479; see also World Point Trading PTE, Ltd. v. Credito Italiano, supra; Bewers v. Am. Home Prods. Corp., 99 AD2d 949 [1st Dept], affd 64 NY2d 630).
Globalvest's claim is plainly centered in Brazil, not New York. Globalvest admits that its claim is based "on Citibank's [alleged] wrongful conduct in causing the commencement of the frivolous Brazilian Lawsuit" (Pl Br, at 10). Globalvest is thus, in essence, challenging the validity of the ongoing Brazil Lawsuit among non-U.S. shareholders in two Brazilian government-regulated telecommunications companies incorporated in Brazil ( see e.g., Complaint, ¶¶ 22-23; 46-47). The Brazilian court hearing this lawsuit will decide the merits of that case, including whether it is frivolous. Moreover, in yet another litigation commenced by Globalvest in the Cayman Islands, Globalvest has stated its intention to seek a ruling from the Brazilian Court that the plaintiffs there commenced the Brazil Lawsuit in bad faith ( see Cayman Complaint, ¶ 24).
Virtually all of the material events relating to Globalvest's complaint including the events leading to the commencement of the Brazil Lawsuit and the conduct of that lawsuit occurred in Brazil. Additionally, most of the central witnesses (including non-party witnesses, who would not be amenable to subpoena here) and voluminous documents pertinent to this matter are located in Brazil ( see Spinelli Aff., ¶ 16). Clearly, Brazil has the paramount interest in resolving disputes among shareholders vying for control of Brazilian government-regulated entities. New York, on the other hand, lacks sufficient interest in this dispute.
In addition, Globalvest's investment in Brazilian government-related telecommunications companies, and its efforts to gain control over those companies that led to the Brazil Lawsuit, all indisputably occurred in Brazil, and are already the subject of review by Brazilian regulators and Brazilian courts (Spinelli Aff., ¶¶ 4-6). Globalvest's own witnesses attest to the Brazil-centered nature of this conflict ( see Aff. of Brazilian lawyer Marcelo Santos Barbosa, ¶¶ 5-16 [describing the numerous proceedings in Brazil relating to this matter before the Brazilian Securities Commission, before the Brazilian government authority regulating the Brazilian communications industry and before the Federal Court in Brasilia]; Aff. of Juanita Young, Globalvest's Chief Operations Officer, ¶¶ 6-10 [describing Globalvest's longstanding investments in Brazilian telecommunications companies and the litigation in Brazil]).
New York courts routinely dismiss actions arising out of similar circumstances on forum non conveniens grounds ( see Banco do Estado De Sao Paolo, S.A. v. Mendes Jr. Intl. Co., 249 AD2d 137, 138 [1st Dept 1998] [affirming dismissal on ground of forum non conveniens, because it was "undisputed that the underlying events and circumstances implicated by the counterclaims occurred in Brazil and that resolution of the issues posed by those events and circumstances mandates resort to Brazilian law and witnesses, and requires an inquiry into complex Brazilian industry-government relationships"]; see also Gonzalez v. Lebensversicherung AG, 304 AD2d 427 [1st Dept 2003], lv denied 1 NY3d 506 [New York was not a convenient forum for litigation involving a contract entered into in Spain, and entities, persons and events predominantly situated there]; Tilleke Gibbins Intl., Ltd. v. Baker McKenzie, 302 AD2d 328 [1st Dept 2003] [in view of substantial nexus between the action and Thailand, where plaintiff and defendant's Thai affiliate and most of the material witnesses were situated, and where contracts at issue, governed by Thai law, were entered into, dismissal on ground of forum non conveniens was proper]; Davidson Extrusions, Inc. v. Touche Ross Co., 131 AD2d 421 [2nd Dept 1987] [affirming dismissal of breach of contract and fraud action based on a transaction that occurred almost entirely in Cyprus]).
Globalvest makes two responses. First, it asserts, based on its "information and belief" pleading, that Mary Lynn Putney, who, Globalvest alleges, was based at Citibank in New York, "participated in and directed" the commencement of "the frivolous Brazilian Lawsuit" (Pl Br., at 11 [citing Complaint, ¶¶ 16, 21]). However, this assertion, even if true (but see 1/14/05 Putney Aff., ¶¶ 3-4 ["the first time I learned of the Brazil Lawsuit was on January 3, 2005 . . . and have not at any time had any involvement with that Lawsuit"]), is irrelevant for the purposes of the forum non conveniens analysis, given the fact that the sole tortious act alleged by Globalvest the commencement of the Brazil Lawsuit by Brazilian and other foreign parties occurred in Brazil ( see Bewers v. Am. Home Prods. Corp., 99 AD2d 949, supra [fact that defendant with principal place of business in New York made decision in New York to market drugs abroad without adequate warning as to side effects was not sufficient to defeat forum non conveniens motion where the remaining facts and circumstances surrounding plaintiffs' claims occurred in England]).
Second, Globalvest argues that Citibank "dispatched[ed Roberta] Fisher, who is based in New York" to demand that Globalvest sell its shares in the Brazilian telecommunications industry at a discount (Pl Br., at 11). However, Globalvest is not bringing a claim based on anything Fisher said in New York because, as it admits, it did not accede to her demand and, therefore, suffered no harm ( see Aff. of Peter Gruber, Globalvest's President, ¶ 13). Globalvest also concedes that Fisher was "dispatched" not by Citibank, but by Daniel Dantas (the principal of the general partner of CVC LP), who lives in Brazil, not New York ( see Complaint, ¶ 32 [Fisher acting on instructions from Dantas]).
Location of Witnesses and Relevant Documents
Courts have long taken into account the severity of the burden on defendants in being forced to defend themselves in New York when determining a forum non conveniens motion ( see Union Bancaire Privee v. Nasser, 300 AD2d 49 [1st Dept 2002] [doctrine of forum non conveniens warranted that parties' contractual suit be litigated in Brazil, where the witnesses, records and transactions at issues were predominantly situated]; Banco do Estado De Sao Paolo, S.A. v. Mendes Jr. Intl. Co., supra [witnesses and documents in Brazil]; see also Islamic Republic of Iran v. Pahlavi, supra [dismissing case where, among other factors, defendant could not defend against the claim in any realistic way because of the location and documents, which were not subject to the mandate of the New York court]; Zelouf v. Republic Natl. Bank of New York, 225 AD2d 419 [1st Dept 1996] [upholding trial court's dismissal where relevant witnesses and documents were located in London]).
Here, the pertinent documents are all located in Brazil. Globalvest is asking a New York court to address the merits of the Brazil Lawsuit pending against Globalvest, and commenced by several entities whose business activities are centered in and limited to Brazil ( see Complaint, ¶¶ 1, 11-16 [defining "Citibank Entities"], 22, 23). Virtually all of the documents pertinent to both the underlying events leading to the commencement of the Brazil Lawsuit, and the conduct of the lawsuit itself, are in Brazil ( see Spinelli Aff., ¶ 16). The documentary evidence is voluminous and in Portuguese, including the Brazilian litigation papers and minutes of shareholders' and directors' meetings of the Brazilian telecommunication companies at the center of the dispute ( id.).
In addition, there are numerous potential witnesses who are located in Brazil and whose testimony will be relevant to the matter ( see id.), yet who are not subject to the jurisdiction of this court with regard to this claim. These witnesses include, for example, persons who attended various shareholder and board of director meetings and, based on the information set out in the minutes of these meetings, most of these persons appear to reside in Brazil ( see id.). The likely inability of Citibank to compel these critical witnesses to testify in New York (or the cost of bringing willing witnesses) will unfairly prejudice Citibank's ability to defend against Globalvest's charges, strongly militating in favor of having this case heard in Brazil ( see Gulf Oil Corp. v. Gilbert, 330 US 501, 508 [key factor in forum non conveniens motion is "availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses"]; Schertenleib v. Traum, 589 F 2d 1156, 1165 [2nd Cir 1978] [court's inability to compel the attendance of significant unwilling witnesses at trial is "[p]erhaps the most significant problem" favoring dismissal on forum non conveniens grounds, as live testimony is essential to a fair trial]).
Globalvest does not dispute that these Brazilian witnesses would have relevant testimony necessary to establish the merits of the Brazil lawsuit, but rather, asserts that Citibank has the ability to force them to come to New York to testify in this case. According to Globalvest's own allegations, however, Citibank's sole connection to these witnesses is, at most, the fact that a Citibank subsidiary is the limited partner in an investment fund, which, in turn, is a shareholder of a shareholder in several, though not all, of the Brazilian plaintiffs (Complaint ¶¶ 11-14). There is thus no basis for Globalvest's assertion that Citibank could compel these witnesses to come to New York to testify.
In addition, Globalvest identifies only two potential witnesses who are located in New York Putney and Fisher. The mere fact that two potential witnesses are located in New York does not outweigh the balance of the other relevant Pahlavi factors, which clearly favor dismissal ( see Union Bancaire Privee v. Nasser, supra [doctrine of forum non conveniens warranted that parties' contractual suit be litigated in Brazil, where the witnesses, records and transactions at issues were predominantly situated]; see also Gonzalez v. Lebensversicherung AG, supra [same]).
Burden on the New York Courts
If this action is not dismissed, it will impose a substantial burden on a New York court, inasmuch as it is highly likely that Globalvest's claim for tortious interference with prospective economic advantage is governed by Brazilian law. Where, as here, the parties are not both New York domiciliaries, New York law applies an "interest analysis" to tort claims, applying the law of the jurisdiction with the greatest interest in the resolution of the dispute, typically the law of the locus of the tort ( Schulz v. Boy Scouts of Am., Inc., 65 NY2d 189). Here, the focus of the alleged tort the commencement of the allegedly frivolous Brazil Lawsuit is Brazil, and Brazil has the greatest interest in the resolution of this dispute, given the involvement of the Brazilian securities market and telecommunications regulators in the subject matter of the Brazil Lawsuit.
Moreover, the "internal affairs" doctrine also weighs toward the application of Brazilian law. "The internal affairs doctrine is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation's internal affairs matters peculiar to the relationships among or between the corporation and its current officers, directors, and shareholders because otherwise a corporation could be faced with conflicting demands" ( Edgar v. MITE Corp., 457 US 624, 645). According to Globalvest's complaint, both the Brazil Lawsuit and this lawsuit relate to a dispute among shareholders of two Brazilian corporations regarding their role as shareholders, including the entitlement to elect directors and vote at shareholders' meetings ( see Complaint, ¶¶ 10, 18-19). Thus, Brazilian law, not New York law, likely governs such a dispute ( see Mantei v. Creole Petroleum Corp., 61 AD2d 910, 910 [1st Dept 1978] [affirming dismissal on the basis of the internal affairs and forum non conveniens doctrine on the ground that "[c]omplaints arising out of alleged unfair treatment of dissenting stockholders in a merger of consolidation of foreign corporations have traditionally been held to be matters that should not be entertained in the courts of this state"]; accord Hart v. General Motors Corp., 129 AD2d 179 [1st Dept 1987] [same]).
Contrary to Globalvest's contentions (Pl Br., at 12-13), "the applicability of foreign law is an important consideration in determining a forum non conveniens motion" and weighs against retention of the action ( Shin-Etsu Chem. Co., Ltd. v. 3033 ICICI Bank, Ltd., 9 AD3d 171, 178 [1st Dept 2004] [reversing denial of forum non conveniens motion]). For this reason, New York courts commonly dismiss actions that may require interpretation of foreign law ( see e.g., Islamic Republic of Iran v. Pahlavi, 62 NY2d at 480 ["likely applicability of Iranian law" supports dismissal on forum non conveniens grounds]; Tilleke Gibbins Intl., Ltd. v. Baker McKenzie, 302 AD2d 328, supra [holding that action involving Thai evidence and applying Thai law would be inordinate burden upon a New York court]; Neuter, Ltd. v. Citibank, N.A., 239 AD2d 213 [1st Dept 1997] [dismissing action to Sweden where, inter alia, court would be required to apply Swiss law, and expert testimony would be required]; Davidson Extrusions, Inc. v. Touche Ross Co., supra [dismissing action because, inter alia, Cypriot law was applicable to the dispute]; PT United Can Co. Ltd. v. Crown Cork Seal Co., Inc., 1997 WL 31194 [SD NY 1997], affd 138 F3d 65 [2nd Cir 1998] [dismissing action because, inter alia, Indonesian law was likely to apply to the dispute]).
New York courts also routinely dismiss cases on forum non conveniens grounds where there is a prior related litigation pending in a foreign jurisdiction, because of the undue burden this would place on New York courts, and the risk of conflicting results ( World Point Trading PTE, Ltd. v. Credito Italiano, 225 AD2d at 161 [dismissing on forum non conveniens grounds in part due to "attendant risk that conflicting rulings might be issued by courts of two jurisdictions" where a case was already pending in Italy]; see also AM Exports, Ltd. v. Meridien Intl. Bank, Ltd., 207 AD2d 741 [1st Dept 1994]). The gravamen of Globalvest's claim in this litigation is that the Citibank Entities tortiously interfered with its prospective economic advantage by commencing the allegedly "frivolous" Brazil Lawsuit. Thus, for Globalvest to prevail here, it must essentially litigate the merits of the factual and Brazilian legal issues that are, at the same time, already being litigated in the pending Brazil Lawsuit. Allowing this action to proceed in New York would result in a wasteful and expensive duplication of effort, and require addressing the merits of an ongoing litigation in Brazil, that the Brazilian courts are far better equipped to address.
Although Globalvest contends that "the validity of the claims that are the subject of the Brazilian Lawsuit is not dispositive of this case" (Pl Br., at 13), this contention is rebutted by Globalvest's own complaint, which repeatedly alleges, including in the section setting forth the cause of action, that the Brazil Lawsuit is frivolous (Complaint ¶ 46; see also id., ¶¶ 20, 23).
Adequate Alternative Forum
Although the availability of an alternative forum is not a "prerequisite" to forum non conveniens dismissal, New York courts consider it to be a "most important factor" ( Islamic Republic of Iran v. Pahlavi, 62 NY2d at 481). Here, Brazil is an available, more appropriate alternative forum, lending further support for dismissal of the action. Both New York state and federal courts have consistently held that Brazil is an adequate forum for the resolution of disputes ( see e.g., Union Bancaire Privee v. Nasser, supra; Banco do Estado De Sao Paolo, S.A. v. Mendes Jr. Intl. Co., supra; Panama Processes, S.A. v. Cities Serv. Co., 650 F2d 408 [2nd Cir 1981]; Mendes Jr. Intl. Co. v. Banco Do Brasil, S.A., 15 F Supp 2d 332 [SDNY 1998], appeal dismissed 215 F3d 306 [2nd Cir 2000]).
In addition, Brazilian law permits a party to bring a claim if is the subject of allegedly malicious or baseless litigation ( see Aff. of Brazilian lawyer Fabia Ulhoa Coelho, ¶¶ 10-12). Accordingly, Globalvest, which is already litigating the subject matter of this dispute in Brazil, can and should bring its claim in Brazil. Indeed, Citibank asserts that it is willing to be subject to jurisdiction in Brazil with respect to this action.
Globalvest asserts that the Brazil Lawsuit provides it "little or no recourse to seek relief . . . in Brazil" (Complaint, ¶ 30), because the Brazil Lawsuit has effectively been stayed as a result of the failure of the plaintiffs in that action to serve two of the defendants named therein. This assertion, however, is nothing more than an allegation concerning purported delays in the Brazil Lawsuit. Such alleged delay in no way renders New York a more convenient forum, particularly where Globalvest does not allege that it has even tried to seek the Brazilian Court's assistance in overcoming the alleged delay. In addition, in the Cayman Complaint, Globalvest has stated its intention to seek a remedy from the Brazilian court against the Brazil plaintiffs (Cayman Complaint, ¶ 24).
Globalvest also complains that it takes an average of five years, including appeals, for a lawsuit to be concluded in Brazil, and that Globalvest could not obtain expansive U.S.-style discovery in Brazil. These quarrels with the Brazilian legal system, even if accurate, do not render the forum inadequate ( see e.g., Manela v. Garantia Banking Ltd., 940 F. Supp 584, 591 [SDNY 1996] [expressly rejecting argument that delay in Brazilian courts or "unavailability of U.S.-style" discovery rendered the forum inadequate]; see also Shin-Etsu Chem. Co., Ltd. v. 3033 ICICI Bank, Ltd., 9 AD3d 171, supra [lower court's denial of forum non conveniens motion on ground that it would take at least ten years to resolve the matter in a court of India was erroneous as a matter of law]).
Globalvest's assertion that New York is a more appropriate forum, because Citibank has its headquarters in New York, and has previously sued and been sued in New York, is also without merit. New York courts routinely dismiss on forum non conveniens grounds where the defendant is based in New York ( see e.g., Chawafaty v. Chase Manhattan Bank, N.A., 288 AD2d at 58 ["the fact that defendant maintains its headquarters in New York does not establish that New York is an appropriate forum"]); see also Trinity Inv. Trust LLC v. Morgan Guar. Trust Co. of NY, 275 AD2d 661 [1st Dept 2000]).
Finally, Globalvest submits, via the Supplemental Affidavit of Jeffrey S. Boxer, Esq., documents filed with the United States District Court in the Southern District of New York in International Equity Investments, Inc. v. CVC/Opportunity Equity Partners, Ltd. and Daniel Valente Dantas (the District Court action). Although Globalvest argues that these documents demonstrate a "substantial nexus between New York and the subject matter of [Globalvest's] lawsuit" (Boxer Aff., ¶ 38), and therefore require the denial of Citibank's motion to dismiss this action on the ground of forum non conveniens ( id., ¶ 2), Globalvest is incorrect.
The District Court action was not commenced by Citibank, but by IEII, its subsidiary and the sole limited partner in CVC LP, against CVC Ltd., CVC LP's then general partner, and Daniel Dantas, its principal. In connection with that lawsuit, the District Court has issued a preliminary injunction preventing CVC LP and Dantas from auctioning key assets of CVC LP, and from interfering with IEII's right to remove CVC Ltd. as CVC LP's general partner ( id., ¶ 8). Contrary to Globalvest's assertion, the District Court action which concerns the violation by CVC LP's general partner of its contractual and common law duties to IEII does not demonstrate any nexus between New York and the subject matter of this lawsuit, i.e., whether or not the Brazil Lawsuit is "frivolous," and caused injury to Globalvest. The District Court action does not indicate any involvement by Citibank or IEII in the initiation of the Brazil Lawsuit against Globalvest. To the contrary, the record in the District Court action focuses on the period after the commencement of the Brazil Lawsuit, when IEII learned of the misconduct by its general partner and Dantas that necessitated the filing of the action ( see Boxer Aff., Exh 4, ¶¶ 11-28).
Upon balancing the appropriate factors, Citibank has sustained its burden of showing that the end of justice and the convenience of the parties will be best served if this action is heard in Brazil. Accordingly, Citibank's motion for dismissal on the ground of forum non conveniens is granted. In light of this determination, Globalvest's request for discovery on the issue of forum non conveniens is denied as moot, as well as Citibank's alternative motions for dismissal on the grounds of prior action pending, and failure to state a claim.
Accordingly, it is
ORDERED that Citibank's motion to dismiss is granted and the complaint is dismissed with costs and disbursements to Citibank as taxed by the Clerk of the Court; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.