The case was brought in a U.S. court over events that took place in China. The threshold question: should the court take the case or kick it over to China, which is a more suitable forum for hearing the dispute?
[I]t is natural that someone tried to bring cases here concerning the melamine contamination of infant formula and milk products in China, which reportedly affected thousands of infants in China. Their angle was an American holding company with Chinese subsidiaries that made contaminated milk products. Plaintiffs’ counsel found about 100 Chinese citizens and residents and filed suit in federal district court in Maryland, the holding company’s principal place of business.
Just as inevitable as the filing of the lawsuit in the U.S. was the defendants’ response: they moved to dismiss the case on forum non conveniens grounds, arguing that the cases did not belong in the U.S. and should be litigated in China. The court granted that motion in a very interesting decision filed last week. Tang v. Synutra International, Inc., No. DKC 09-0088 (D. Md. March 29, 2010).
This is basic civil procedure for lawyers (first year of law school), but the interesting part is the way that U.S. courts have looked at China’s court system over the years, and under what circumstances U.S. courts have found it lacking. I profess to not having looked into this issue for quite a few years, mostly because I don’t do a lot of cross-border litigation.
The way these arguments work is thus: the plaintiffs want the case to remain in the U.S. court so they can go after the U.S.-based holding company, receive more damages, and benefit from the U.S. system of discovery (among other things), while the defendant wants the case to be dismissed so it can fall back on the relatively high hurdles that exist for foreign companies to sue Chinese enterprises here, particularly in relation to tort claims.
So the defense is saying that the case should be heard in China. The tort took place there, the product in question was manufactured there, the plaintiffs live in China, etc. The plaintiff will hit back with evidence arguing that the Chinese court system will not offer plaintiff reasonable redress for damages suffered as a result of the tortious act.
In arguing that China could not offer an adequate forum for hearing the dispute, the plaintiff:
[P]rovided affidavits from Chinese lawyers with stories of how some Chinese lawyers were pressured to withdraw from melamine cases. The expert also cited anecdotal evidence, in part based on newspaper reports, that some cases filed in China have sat without court action for months, as the courts allegedly have placed some cases perpetually in limbo.
Not too impressive. Relying on a lot of anecdotal evidence, including newspaper accounts, is not a strong way to go. Moreover, and as Walk points out, cases that sit on dockets in perpetuity is a situation not restricted to the Chinese court system.
via China Hearsay: China law, business, and economics commentary.
