Chancery Defers to Indian Corporation's Delaware Choice of Venue

In the absence of a prior-filed action in another forum, Delaware state courts will respect a plaintiff’s Delaware choice of forum when faced with a forum non conveniens defense, except in the “rare case” where a defendant demonstrates “overwhelming hardship and inconvenience if required to litigate in Delaware.” The Delaware Supreme Court recently clarified the legal standard for the forum non conveniens defense in> Martinez v. E.I. du Pont de Nemours & Co., 86 A.3d 1102 (Del. 2014). The Supreme Court explained in Martinez that the overwhelming-hardship standard for the forum non conveniens defense is not “insurmountable,” but does require that defendants demonstrate “on balance, litigation in Delaware would represent a manifest hardship to [them].” To analyze hardship and inconvenience under the forum non conveniens legal standard, Delaware state courts are guided by the factors set forth by the Delaware Supreme Court in General Foods v. Cryo-Maid, 198 A.2d 681 (Del. 1964): (1) relative ease of access to proof; (2) availability of compulsory process of witnesses; (3) the possibility of a view of the premises; (4) whether the controversy is governed by Delaware law that a Delaware state court should more properly decide; (5) whether a similar action is pending in another jurisdiction; and (6) all other practical issues that would make the trial of the case easy, expeditious, and inexpensive.

The Court of Chancery recently applied the forum non conveniens legal standard, as clarified by the Supreme Court in Martinez, to deny a motion to dismiss based on forum non conveniens. In Pipal Tech Ventures Private Ltd. v. MoEngage, C.A. No. 10381-VCG (Del. Ch. December 17, 2015) (Glasscock, V.C.), the court deferred to the plaintiff Indian corporation’s Delaware choice of forum in a dispute against a defendant Delaware corporation created to hold and capitalize on a computer application that was allegedly stolen from the plaintiff in India. Accordingly, even though the plaintiff was an Indian corporation principally located in India and India was the more convenient forum to hear a dispute over the ownership of an asset allegedly stolen in India, the court nevertheless denied the defendant Delaware corporation’s motion to dismiss based on forum non conveniens.

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