Gramercy Emerging Markets Fund v. Allied Irish Banks, P.L.C.
173 A.3d 1033
| Del. | 2017Background
- Gramercy (a Cayman fund and two Delaware subsidiaries) sued Bulgarian-American Enterprise Fund and Allied Irish Banks in Delaware on claims governed by Bulgarian law arising from a Bulgarian investment.
- Gramercy originally filed the same claims in Illinois; after discovery the Illinois courts dismissed on forum non conveniens, and the Illinois Supreme Court denied review.
- After losing in Illinois, Gramercy filed in Delaware rather than suing in Bulgaria (the substantive forum).
- Defendants moved to dismiss the Delaware suit for forum non conveniens, arguing Delaware was an inappropriate forum and relying on Lisa to avoid the Cryo-Maid overwhelming-hardship standard.
- The Court of Chancery dismissed the Delaware suit, applying McWane and Cryo-Maid factors but declining to apply Cryo-Maid’s “overwhelming hardship” presumption.
- The Delaware Supreme Court affirmed, clarifying the proper standard when a later-filed Delaware action follows a predecessor that was dismissed (procedurally) for forum non conveniens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cryo-Maid’s "overwhelming hardship" presumption applies when Delaware suit was filed after an earlier suit in another forum was dismissed for forum non conveniens | Gramercy: Delaware still counts as plaintiff’s chosen forum even if second-filed; Cryo-Maid deference should apply | Defs: Lisa bars overwhelming-hardship deference where plaintiff previously filed elsewhere; McWane or ordinary FNC analysis applies | Overwhelming-hardship presumption does not apply when the suit is not first-filed; Cryo-Maid factors govern but without the first-filed tilt |
| Whether McWane’s deferential rule applies when the prior (first-filed) action is no longer pending because it was dismissed for forum non conveniens | Gramercy: McWane should not control because the prior action is no longer pending and was dismissed procedurally | Defs: Lisa supports applying McWane even if prior action is resolved; comity favors dismissal | McWane does not automatically apply once the prior action is no longer pending; application depends on context (e.g., preclusive adjudication) |
| Proper analytic framework when prior action was dismissed without prejudice on FNC | Gramercy: prior procedural dismissal shouldn’t deprive Delaware suit of Cryo-Maid protection | Defs: procedural dismissal undermines plaintiff’s entitlement to first-filed deference; court may dismiss | Court adopts intermediate approach: conduct a straightforward Cryo-Maid factor analysis and dismiss if factors favor dismissal (no overwhelming-hardship overlay) |
| Whether Delaware is an appropriate forum given Bulgarian law governs and relevant witnesses/documents are abroad | Gramercy: prefers Delaware forum; likely argued convenience or policy reasons | Defs: Bulgaria is proper forum; practical issues (language, witnesses, local law) favor dismissal | Held dismissal appropriate: Cryo-Maid factors (access to proof, compulsory process, application of foreign law, comity) weigh in favor of Bulgaria; Delaware should not adjudicate unsettled Bulgarian securities law |
Key Cases Cited
- Gen. Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681 (Del. 1964) (establishes Cryo-Maid forum non conveniens factors and deference to a plaintiff’s first-filed choice)
- McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281 (Del. 1970) (applies a discretionary, comity-based rule favoring a pending first-filed action in another forum)
- Lisa, S.A. v. Mayorga, 993 A.2d 1042 (Del. 2010) (held that a prior forum choice can deprive a plaintiff of Cryo-Maid’s overwhelming-hardship protection and affirmed dismissal under McWane where prior action’s adjudication undermined the Delaware suit)