Bearing witness: Convenience of witnesses a core factor in forum challenges
In the recent case of Oscar Trustee Limited v MBS Software Solutions Limited, the Eastern Caribbean Court of Appeal upheld the decision of the Commercial Court and reaffirmed that the convenience of witnesses including their availability and location remains not simply a relevant but in fact a core factor in forum non conveniens applications.
At first instance, the BVI Commercial Court stayed the claim in favour of Hong Kong as the more appropriate forum for reasons including that (i) the connecting factors to the BVI were insignificant and (ii) it would be more convenient for the witnesses if the trial took place in a court in Hong Kong which was closer to their home base and within a similar time zone. It is often overlooked that the location and availability of witnesses has been long recognised as a core connecting factor as reiterated by Lord Neuberger in VTB Capital plc v Nutritek International Corpn and the Eastern Caribbean Court of Appeal in Anjie Investments Limited v Cheng Nga Yee.
Oscar Trustee argued in the appeal that the Commercial Court had misdirected itself by equating or confusing the expression forum non conveniens or forum conveniens with the convenience of witnesses. When assessing the convenience of the witnesses, the Court of Appeal found that the Commercial Court had correctly considered (i) the location of the witnesses who had been identified and others who were yet to be named in view of the early stage of the claim and its complexity, (ii) the protagonists were either based in Australasia or would be relocating there shortly and would either have to undertake difficult, long and expensive travel to attend court in the BVI or do so via video link at times late into the night in their respective time zones, (iii) the fund-raising for the joint venture occurred in Hong Kong and (iv) the subject of the venture was in Turkey.
The Court of Appeal held that in all the circumstances, the Commercial Court had evaluated each of the connecting factors in keeping with the guiding principle set out in Spiliada Maritime Corp v Cansulex Ltd and more recently summarised by the Privy Council in Livingston Properties Equities Inc and others v JSC MCC Eurochem and another. It was held that in carrying out its assessment, the weight attached to each factor by the Commercial Court was reasonable and justifiable in the circumstances of the case. As a result, Hong Kong was the more appropriate forum and justice would be better served by allowing the claim to be tried in Hong Kong.
Oscar Trustee also ambitiously sought to reverse cost orders made by the Commercial Court as a consequence of MBS’ successful forum challenge and resistance of Oscar Trustee’s precipitously filed summary judgment application. The Court of Appeal particularly noted that Oscar Trustee conceded in the Commercial Court that costs should be awarded to MBS, albeit at a reduced rate. Following the Privy Council case of Paramount Export Ltd v New Zealand Meat Board, the Court of Appeal found that the Commercial Court did not err in the exercise of its discretion in making the costs award. The Court of Appeal emphasised Oscar Trustee’s concession, warning that it is only rarely and with extreme caution that an appellate court will permit a party to withdraw from a concession that has formed the basis of argument and judgment in the lower court. This was not an appropriate case to do so.
The Court of Appeal’s decision confirms that the availability and location of witnesses is a central consideration for the court in a forum challenge notwithstanding virtual hearings today. Additionally, the Court emphasised that costs orders are very rarely overturned on appeal in particular when bootstrapped by a concession. There are important public policy grounds for a court not to interfere with a decision based on a concession made by a fully advised and represented litigant.
Harneys acted for the successful respondent, MBS.