Farmanfarmaian v. Gulf Oil Corp.

Dec 18, 1978

No. 5, Docket 77-7507

Versions:

FEINBERG, Circuit Judge:

This is аn appeal from an order of the United States District Court for the Southern District of New York, Robert L. Carter, J., conditionally dismissing оn forum non conveniens grounds this action for breach of contract and tortious interference with contract rights. We affirm.

This lawsuit is brought by Dr. Abolbashar Farmanfarmaian, an Iranian citizen and attorney, against eleven American Oil companies. The facts are set out in greater detail in Judge Carter’s full and thoughtful opinion, reported at 437 F.Supp. 910 (S.D.N.Y. 1977). The following will suffice here. The district court found that the action arises from the breach of a 1971 written agreement between plaintiff and the Iranian Investment Corporation, an Iranian subsidiary owned by the oil company defendants (40%) and three European oil companies (60%). The agreement allegedly provided an option for repurchase by plaintiff, and others affiliated with him, of a one-third stock interest in Pazargad Chemical Company, an Iranian petro-chemical manufacturer, for approximately $765,000.1 Such repurchase would have allowed plaintiff to regain the control of Pazargad he had before refinаncing needs forced him to relinquish it in 1965. Allegedly, the breach of this option agreement to repurchase the stock was thе product of pressure from the Iranian ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍government in the course of negotiating the new oil agreement of July 19, 1973 between Iran and the American oil company defendants and the three European oil companies. The stock was аllegedly transferred instead to the Iranian government’s oil corporation.

After allowing plaintiff to take discovery fоr nine months on the connection this dispute has with New York, including efforts to assess whether relevant evidence and witnesses are present here, Judge Carter dismissed this action on forum non conveniens grounds on condition

(1) that the defendants waive аny defense that they might have relating to any statute of limitations that did not exist prior to the initiation of suit in this district; (2) that the defendants consent to the jurisdiction of the Iranian courts, and that they submit to service of process in Iran, which shall take placе within 90 days from the filing of this opinion.

437 F.Supp. at 928. The judge based dismissal on the following:

Since these agreements were reached in Iran, between Iranian parties and concerning the shares of an Iranian manufacturer (Pazargard), it is clear that evidence of the breach itself — assuming that one took place — must come primarily from Iran, and the major witnesses whose testimony may be needed concerning this breach will also most likely come from there. In addition, defendants have contended that the transfer ... of the Pazargad shares to [the Iranian government’s oil corporation] was compelled by the Iranian government; and while plaintiff ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍alleges that [transfеr] was merely induced by Iran . . . , any resolution of plaintiff’s claims would of necessity require first some conclusion as to the role of the Iranian government in these events. The proof as to that point, obviously, would come primarily from Iran.

Aside from these fаctors, which by themselves weigh heavily toward declining jurisdiction in favor of Iran, it must be recognized that the validity of plaintiff’s claims must be determined under Iranian and not American law. Having already had occasion in this case to examine Iranian law at least preliminarily, I know from first-hand experience what a difficult task it is to reach any conclusion as to its substance.

437 F.Supp. at 923-24 (Emрhasis in original; footnotes omitted). Judge Carter found, in conclusion, that despite plaintiff’s opportunity to discover facts to back up his claim that the Southern District is a convenient forum, “[t]he case for dismissal . . . remains overwhelming.” 437 F.Supp. at 925.

While we believе that the issue whether the action should have been dismissed is perhaps somewhat closer than Judge Carter ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍suggested, we аffirm the dismissal without much pause because a district judge has wide discretion in this area, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 91 L.Ed. 1055 (1947); Schertenleib v. Traum, 589 F.2d 1156 (2d Cir. 1978), and here there is no “clear showing” of abuse of that discretion, Fitzgerald v. Texaco, Inc., 521 F.2d 448, 451 (2d Cir. 1975), cert. denied, 423 U.S. 1052, 96 S.Ct. 781, 46 L.Ed.2d 641 (1976).

A great deal of Judge Carter’s opinion was devoted to plaintiff’s claim, disputed by defendants, that plaintiff could not have sued defendants in Iran as a matter of right under Iranian jurisdictional law, and therefore Iran does not satisfy the alternative forum prerequisite for invocation of the forum non conveniens doctrine as enunciated in Gulf Oil, supra, 330 U.S. at 506-07, 67 S.Ct. 839, еven though defendants now consent to suit there. For the reasons stated in our recent opinion in Schertenleib v. Traum, 589 F.2d 1156 (2d Cir. 1978), we hold, as Judge Carter did, that there was no reason to determine whether defendants were initially subject to the compulsory jurisdiction of Iran. Once defendants consented to ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍suit in Iran, and Judge Carter found that there was an existing alternative forum, he had the power to аpply the forum non conveniens doctrine after balancing all of the relevant considerations.

We feel constrained to comment, however, on statements in the judge’s opinion to the effect that a foreign plaintiff’s “right to sue in the Unitеd States is clearly of a lesser magnitude than that of an American citizen.” 437 F.Supp. at 923, 927. Whatever the merits of that proposition gеnerally, which does find some support in cases suggesting that our courts should be quite cautious in dismissing on forum non conveniens grounds whеn suit is brought by an American citizen, see, e. g., Olympic Corp. v. Societe Generale, 462 F.2d 376, 378 (2d Cir. 1972), we think it has no application where, as here, a treaty between the United Stаtes and the foreign plaintiff’s country allows nationals of both countries access to each country’s courts on tеrms no less favorable than those applicable to nationals of the court’s country. 8 United States Treaties and Othеr International Agreements 900, 902-03 (1957). Our view on this point in no way affects the district court’s disposition of the case because the judge applied the same forum non conveniens standards as would be applied were the plaintiff an American citizen.

In conclusion, we hold that the district court had the power to dismiss the case on forum non conveniens ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍grounds, and we аffirm the exercise of Judge Carter’s discretion in dismissing the case.

Notes

. This figure comes from the complaint filed in November 1975, and is apparently based on the then current exchange rate for approximately 50 million Rials.